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* From Moody’s…
On p.2 of its Weekly Credit Outlook for Public Finance released late yesterday (attached), Moody’s notes the recent announcement by the State of Illinois (rated Baa2/negative outlook) warning of possible delays in monthly pension contributions in the current fiscal year is credit negative, and could prompt the state’s underfunded retirement plans to sell assets to pay retiree benefits. Such delays would most likely affect state contributions in November, when tax revenues are typically caught in a seasonal slowdown.
Illinois has the lowest rating and the largest unfunded pension liabilities of any state. The adjusted net pension liability (ANPL) of the state’s five plans (covering teachers, state employees, Illinois public university employees, state judges and members of the legislature) total about $193 billion. This unfunded liability is 437% of the state’s own source revenues, compared with a US median of 85%. Illinois’ ANPL will keep rising because the state pays less than the “tread-water” amount that covers current-year benefit accruals and interest on existing net liabilities. Deferral of state contributions, and the possible resulting asset sales to pay retiree benefits, would likely exacerbate this trend.
Meeting the tread-water contribution standard would require a significant hike in actual state pension payments (about 44% based on fiscal 2015 data). Pension contributions are the state’s primary source of budget stress. In the fiscal year that began July 1, the state’s pension contributions are almost $7.9 billion, or almost $660 million on a monthly basis. Most of that, about $600 million per month, is paid through the state general funds. The top-priority general fund monthly commitment, paying debt service on the state’s general obligation bonds, only amounted to about $190 million in October. Despite the lack of a full budget in the current and preceding fiscal years, Illinois’ pension funding statute (Public Act 88-0593) contains a continuing appropriation for pension contributions.
The state’s backlog of unpaid bills reached $9.9 billion on October 19, according to the Illinois comptroller’s office, which seeks to identify high-priority needs, such as bills requiring 30-day processing to meet federal reimbursement requirements. Monthly pension contributions do not fall into a high-priority category, because under statute they can be made up later in the fiscal year.
posted by Rich Miller
Friday, Oct 21, 16 @ 11:06 am
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“Pension contributions are the state’s primary source of budget stress.” Really? how about not having a real budget or collecting taxes at an appropriate rate to fund the state’s activities?
Comment by NoGifts Friday, Oct 21, 16 @ 11:16 am
ON this subject, I claim ignorance. My question for anyone: if the course is maintained and the pension system continues to be underfunded, do state retirees (current and future) risk not receiving benefits? Or possibly diminished benefits?
I think what is baffling for me, I don’t see anybody working toward a solution, however small.
Comment by New Slang Friday, Oct 21, 16 @ 11:16 am
Wow, I’m speechless.
Comment by Ron Friday, Oct 21, 16 @ 11:17 am
NoGifts, that would require Illinois be the highest tax state in the country. Not a good thing for us to shoot for.
Comment by Ron Friday, Oct 21, 16 @ 11:18 am
I believe the pension underfunding is far bigger than the money lost by not having a budget. This is all the more reason to move away from pension systems for government employees. Then politicians cant keep taking out loans to try and pay off pension debt that has accumulated over 20 years or more.
Comment by Maximus Friday, Oct 21, 16 @ 11:19 am
Every single voter in Illinois should be sent that clip, each week, every week, for a year.
I’m not an accountant, an actuary…in fact, I’ve never, ever had any formal finance or banking or investment training. None!
But our ever thoughtful, considerate, well-educated attorney/legislators who pragmatically and with wisdom, craft our State’s budget and financial future should read this. EVERY MORNING.
I’m not an attorney either, but seems there must be some law, somewhere in Illinois, that allows for even elected officials to be held criminally, or civilly liable for breach of Fiduciary Duty for all this pension mess.
Moody’s couldn’t say it any clearer, to the average Joe, this is gonna be painful.
I’m not religious either. But OMG, I think I might just go to church this weekend after reading that.
Comment by Anonymous Friday, Oct 21, 16 @ 11:19 am
Quinn paid the pension systems and was catching up on payments to state contractors, with the income tax at 5%. Rauner requested and got the tax to drop back, saying he could cut out waste and fraud and thus would not need the 5% rate. Rauner has been a spectacular failure, not fit to be governor. The biggest problem now is lack of revenue due to Rauner, and his “turnaround agenda”.
Comment by DuPage Friday, Oct 21, 16 @ 11:32 am
Anonymous, Madigan and Edgar should be in jail for this.
Comment by Ron Friday, Oct 21, 16 @ 11:34 am
Quinn’s plan was just a general tax hike to get more money, he didnt allocate all the extra money to go to pensions. Even if he did it would be one of many tax hikes needed to get out from under the debt.
Comment by Maximus Friday, Oct 21, 16 @ 11:38 am
A year ago OW,RNUG or one of the principals of this blog posted this resource on how we got here. It’s definitive. So before someone starts to go off on public workers about their pensions, read this to truly and correctly assign blame. As a Tier II employee I get really tired of being yelled at.
http://www.chicagobusiness.com/section/pensions
Comment by Honeybear Friday, Oct 21, 16 @ 11:38 am
== Pension contributions are the state’s primary source of budget stress. ==
Since we were making the payments until the GA let the temporary tax increase expire, I would argue deliberate lack of revenue is the problem.
Comment by RNUG Friday, Oct 21, 16 @ 11:41 am
Legislators have already done something to fix the teacher pension unfunded liability problem. A Tier II pension system was created in 2011. These Tier II teachers actually contribute more than they will receive in benefits. Tier II teachers also cannot retire with full benefits until age 67. So, as more Tier I teachers retire and more Tier II teachers take their place, the unfunded liability will start go down. If legislators really wanted to fix the actuarial problem quickly, they could stop the sham of the pension payment ramp and pay off the unfunded liability in even payments over a 40-50 year period (much the way someone refinances their house over 30-years to create extra cash flow).
Comment by Tbone Friday, Oct 21, 16 @ 11:44 am
== do state retirees (current and future) risk not receiving benefits? Or possibly diminished benefits? ==
The IL SC has already said the actual pensions MUST be paid when due. While they didn’t specify where the money would come from (that being the GA’s problem), reading what they did right implied it would have to come directly out of tax revenues, ie, GRF.
Comment by RNUG Friday, Oct 21, 16 @ 11:45 am
===would be one of many tax hikes needed to get out from under the debt.===
Or we could have just kept the tax hike we already had that paid down our backlog and funded our pensions. Nope couldn’t do that. Makes way too much sense.
Comment by Ducky LaMoore Friday, Oct 21, 16 @ 11:45 am
Write, not right …
Comment by RNUG Friday, Oct 21, 16 @ 11:47 am
@Maximus One of many tax hikes? Give me a break. Quinn managed to make the pension payment every year while he was Governor. If every previous Governor had done that we wouldn’t have a pension problem. Quinn also cut the state’s unpaid bill backlog from 10 billion to 4 billion. The obvious reason he was able to do this was the 5% income tax rate. Now under Rauner we are back to 3.75% rate and back to 10 billion in unpaid bills. We have been stuck in reverse for 20 months under his leadership, or lack there of.
Comment by The Dude Abides Friday, Oct 21, 16 @ 11:50 am
== Legislators have already done something to fix the teacher pension unfunded liability problem. A Tier II pension system was created in 2011 ==
It was all 5 systems - SERS, JRS, GARS, SURS & TRS - that had Tier 2 created for new hires.
Comment by RNUG Friday, Oct 21, 16 @ 11:50 am
Does any discerning person not in denial truly believe that the pyramid of state and local pension obligations can be paid in full?
The Supreme Court can rule whatever it wants, but it doesn’t mean that when all the obligations come crashing down, there are enough taxpayers willing to pay or enough governments willing to cut police, health care, and education to make up the difference.
Comment by Burlington Friday, Oct 21, 16 @ 11:52 am
==The IL SC has already said the actual pensions MUST be paid when due. While they didn’t specify where the money would come from (that being the GA’s problem), reading what they did right implied it would have to come directly out of tax revenues, ie, GRF.==
The court ruled that it had to be paid when due, but it had previously ruled that the union and other employees couldn’t force the state to pay into it on time. Therefore, you can blame everyone who a) delayed or eliminated paying into it (the employee portion was paid in every time), or b) had their taxes artificially kept low while programs were funded by those pension non-payments (everyone).
Comment by thoughts matter Friday, Oct 21, 16 @ 11:53 am
- Burlington -
There have been multiple plans put forward over the years to properly pay it. There has been a singular lack of political will to take the required actions.
Comment by RNUG Friday, Oct 21, 16 @ 11:56 am
I wonder if legislators would grow some backbone if their terms were longer, say 4 years for State rep’s and 8 years for State senators. Maybe then they’d vote the cuts and new revenue needed to dig out of this hole. As it is, they’re afraid to do anything because they’re always running, especially the reps and. Then again, political courage in Illinois is as rare as native prairie.
Comment by Sir Reel Friday, Oct 21, 16 @ 11:56 am
== The court ruled that it had to be paid when due, but it had previously ruled that the union and other employees couldn’t force the state to pay into it on time. ==
Same case, IFT.
Comment by RNUG Friday, Oct 21, 16 @ 11:57 am
Maximus - “Quinn’s plan was just a general tax hike to get more money, he didnt allocate all the extra money to go to pensions.”
Actually, he did. Dan Rutherford: “He says the problem is so bad that the recent 66 percent income tax increase only covers the money needed for pensions and does nothing for the state’s backlog of unpaid bills.”
http://chicago.cbslocal.com/2012/04/23/rutherford-tough-road-ahead-for-quinns-pension-plan/
Comment by Anyone Remember Friday, Oct 21, 16 @ 12:01 pm
Wait until the rate of return is lowered to where it should be (and it isnt 7%). Oh@ and wait until the SSN raises life expectencies.
Comment by Blue dog dem Friday, Oct 21, 16 @ 12:04 pm
If the state couldn’t make the ARC payments all these years under the false assumption of 8%+ returns, what makes you think they’ll be able to do it when they start using realistic 4-6% rate that every credible actuary is pushing for, tax hike or no tax hike?
If the state found some way to pay the “proper” amount all these years into pensions (it was never proper), all those state and teacher salaries would have been lower, benefits more expensive, etc. The problem goes beyond a tax rates.
Comment by City Zen Friday, Oct 21, 16 @ 12:15 pm
Blue Dog Dem, is correct. Unfortunately we have a state Constitution that locks in increases and retirement dates regardless of real life. Illinois is screwed until the Constitution is changed and public employees get defined contribution retirement
Comment by Ron Friday, Oct 21, 16 @ 12:21 pm
The pension ignorance continues…
Comment by Liberty Friday, Oct 21, 16 @ 12:29 pm
Maybe this bad pension news will get Senator Cullerton to introduce his pension reform bill.
It would also be nice if they would advocate for a constitutional amendment to deal with future benefits from tier 1 employees.
Comment by Lucky Pierre Friday, Oct 21, 16 @ 12:39 pm
I agree Liberty.
https://www.aei.org/publication/are-state-and-local-government-pensions-underfunded-by-5-trillion/
Comment by Ron Friday, Oct 21, 16 @ 12:40 pm
Too much ignorance on the subject of state pension problems is a real concern, because people ignorant of facts make uninformed statements and offer uninformed opinions and suggestions. I’ll try to clarify using round numbers for purposes of ease of calculations.
Based on that, here are facts. They are indisputable by anyone not ignorant,though they are inconvenient to some. Unless you are just opposed to the concept of pensions, we don’t have a state pension problem. As has been frequently pointed out on this site and elsewhere, Tier 2 solved the pension problem. The new normal cost (the actual “cost” of our pensions) is moderate, will go down as a percentage of our state spending and will in fact go down in raw dollars as the number of Tier 2 employees begins to exceed the number of Tier 1 employees, estimated by COGFA to happen in about 8 years.
We have a debt problem, caused by (far more than 20) years of annually paying less than the new normal cost necessary into our pension system. That causes the pension systems to be underfunded including because they don’t earn income they would otherwise have earned by investing the money they should have had. Since inception the system’s investments have averaged earning slightly over 8% annually. So the state owes the systems both the money it didn’t contribute and the money the systems didn’t earn from investing that money.
If the state owes the systems roughly $120 billion, then the debt problem requires approximately 120 X 7.5% (the systems currently assumed rate of return on investments), or a $9 billion annual debt payment by the state just to stay even. Remember, this number doesn’t include paying off the debt itself.
In very simple understandable terms there is our problem. There are collateral issues (discount rate, whether new normal costs should be transferred back to the actual employer, etc.) but they don’t change the general structure.
Comment by steve schnorf Friday, Oct 21, 16 @ 12:53 pm
If you all do one thing today, read Schnorf’s post until you understand it. Well done, Steve.
An unrelated footnote: The observation that “if the Comptroller defers a month’s pension payment, the systems will have to sell assets to pay benefits.” Yes, they might, but they are already selling assets to pay benefits.
These figures are a bit dated, but the point is the same:
TRS paid out about $5.3 billion in benefits and and another $100 million in refunds and admin costs in FY 14. State, district and member contributions totaled around $4.7b. Where do you think that $600 million to make up the difference came from? Dick’s speaking fees? Bake sales? (Sorry, couldn’t resist.) It comes right out of the liquid asset classes, about $50-75m at a time.
Comment by Arthur Andersen Friday, Oct 21, 16 @ 1:19 pm
- Blue dog dem - Friday, Oct 21, 16 @ 12:04 pm:
Wait until the rate of return is lowered to where it should be (and it isnt 7%). Oh@ and wait until the SSN raises life expectencies.
Yup
Comment by Ron Friday, Oct 21, 16 @ 1:24 pm
Steve, ignorance is not acknowledging depositing yesterday’s money into the pensions of tomorrow would mean less money for the salaries of today and lower pension of tomorrow. While glossing over this inconvenient truth doesn’t solve the math problem, it sharpens the lens on how we view the situation.
I think most folks know the deal with the pension debt. They are also aware it is far higher than $120 billion that is derived from highly questionable actuarial assumptions. They are also aware that past returns are not indicative of future performance (especially considering the 10Y bond market), and even so, do not justify those actuarial assumptions used all those years. They are also aware the true cost of the pension benefits has never been communicated or accounted for. So while not all folks are aware of the intricacies of the pension situation, they know enough to question it. And rightly so.
Comment by City Zen Friday, Oct 21, 16 @ 1:36 pm
I keep seeing the suggestion that a change in the Illinois constitution could authorize a substantial change in earned benefits. This has already been rejected by the IL Supreme Court in In re Pension Reform Litigation, at paragraphs 61-66.
Comment by Pc Friday, Oct 21, 16 @ 1:39 pm
=== Rauner requested and got the tax to drop back, saying he could cut out waste and fraud and thus would not need the 5% rate.===
Ignoring the fact that the hike from 3% to 5% was billed as temporary. Then it dropped to 3.75%.
Comment by Egnoranz Es Blizz Friday, Oct 21, 16 @ 1:48 pm
Constitutions amd laws are great until they’re not. See Detroit.
Comment by Ron Friday, Oct 21, 16 @ 1:53 pm
@Ron Detroit filed for bankruptcy. States are not allowed to do so. Not a valid comparison.
Comment by The Dude Abides Friday, Oct 21, 16 @ 2:01 pm
Well said, Steve & AA.
Comment by Norseman Friday, Oct 21, 16 @ 2:03 pm
Zen, I am not illiterate and I re-read your post 3 times, but I confess to total ignorance of most of what you are trying to say. Could you repost it in more direct terms?
Comment by Steve Schnorf Friday, Oct 21, 16 @ 2:05 pm
@The Dude Abides,
Territories like Puerto Rico arent supposed to be allowed to file for bankruptcy either but now they are in a federal re-negotiating phase with their debt. Essentially bankruptcy, call it what you will.
Comment by Maximus Friday, Oct 21, 16 @ 2:12 pm
States can’t file for BK, but some are talking a federal solution like ERISA did for private sector in 1974 - a federal law restructuring state pensions. Con law issues aside, this is worth a read http://www.chicagotribune.com/news/opinion/commentary/ct-public-pensions-unfunded-police-chicago-perspec-0909-jm-20160907-story.html
Comment by Reformed Public Servant Friday, Oct 21, 16 @ 2:23 pm
Ron, I can’t understand your reference to laws, constitutions, greatness and Detroit. Are you comparing illinois and Detroit? What characteristics? Their farm economies? Their populations? Their geographic areas? Their constitutions? I wasn’t even aware Detroit had one, though they probably have a charter, I suppose. Their statutes? Their gross incomes, or per capita incomes, or their assets or climate or just what? Actual discussions require more thought and effort than your drive-bys which is why,I suspect, you don’t engage in them. Goodbye for the day, at least from me.
Comment by Steve Schnorf Friday, Oct 21, 16 @ 2:26 pm
Spot on Maximus
Comment by Ron Friday, Oct 21, 16 @ 2:42 pm
Thanks for the clear, commonsense, fact-based response from 12:53, Steve. I appreciate it. I’d also like to add that a 90% or 100% funding target is foolish in the context of a state being a sovereign entity that cannot declare bankruptcy. 80, or even 75% funded is a much more reasonable target.
Comment by PublicServant Friday, Oct 21, 16 @ 2:52 pm
“Pension contributions are the state’s primary source of budget stress.”
Yes, pensions and Medicaid which rarely if ever gets mentioned. Funny (not ha, ha) about that.
Comment by Federalist Friday, Oct 21, 16 @ 2:59 pm
Steve - Translated into a short story…If back in 1979/89/99, the actuaries used a lower rate of return (say 6%) in calculating the normal cost of the pension contribution that year AND the state actually paid it in full, there would have been less money for everything else in the budget, including government employee compensation. Logic dictates salaries across the board would be lower today. Or something else would have impacted compensation.
So technically your math is right, albeit based on generous assumptions…and the fact above.
Comment by City Zen Friday, Oct 21, 16 @ 3:05 pm
Zen and Blue, I mentioned that the right discount rate is a pension issue to be looked at. Realistically though, as i’m sure you are know, changes in the discount rate assumed by the pensions, which effectively becomes the interest rate the state owes on unfunded liability, does little to change the state’s carrying cost. If the ARR goes down the unfunded liability goes up approximately proportionately, and the opposite happens when the ARR goes up. In simple terms, 2×6=6×2 or 4×3, and they all equal 12. What does change, of course is the effective principal to be amortized.
Comment by steve schnorf Friday, Oct 21, 16 @ 3:14 pm
We were catching up under Pat Quinn. We’re now in a situation where the taxes under Quinn would not now be sufficient to solve the problem, even if accompanied by major spending cuts. This is what happens when you put a breaker in charge instead of a builder. And that’s all Rauner knows how to do is break stuff, cut it, close things down, or as they call it in private equity, “extract value” before they sell what’s left while they still can. Has he ever actually built a complex enterprise up?
Comment by Angry Chicagoan Friday, Oct 21, 16 @ 3:22 pm
To repeat what Steve said, Illinois has a DEBT problem. The debt just happens to be, primarily, owed to the pension systems. Illinois also owes for a lot of outstanding bonds and for a roughly $9B backlog of “current” bills / operating expenses.
Like it or not, the actual pension debt is constitutionality protected and must be paid. Same for the outstanding bonds. You aren’t going to change that going forward; the IL SC has been clear on that. I’ll note that both the bonds and the pensions are, in Illinois at least, considered a contract with all protection that implies REGARDLESS of anything else.
And, as covered yesterday, we may find out if a state contract is, in fact, a contract that must be paid.
Re-read that last sentence … and understand it. Contracts are the basis of capitalism and commerce. You can’t do business without knowing your contract will be honored.
Comment by RNUG Friday, Oct 21, 16 @ 3:26 pm
“…and could prompt the state’s underfunded retirement plans to sell assets to pay retiree benefits.”
Contrary to what the GOP money says, Illinois is not in its own private little economic vacuum, and it is foolish to be awaiting the magic of Mr Big Money’s structural reforms to cure a cash flow problem like this.
Like has been said above, this is a revenue problem, that can potentially get much worse.
If there are any world or regional economic disrupters that suppress revenue even more than our own self-inflicted suppressions, this round of selling off assets could be just the beginning.
Rauner should have been smart enough to keep the bear spray handy. Instead, he chose to set up his financially sloppy camp and make us all terribly vulnerable.
What happens to Illinois cash flow if there is another economic downturn? We are not prepared.
Comment by cdog Friday, Oct 21, 16 @ 3:32 pm
@ 1:53pm
… and finally, they came for Ron.
Be wary of fair weather supporters of your constitution(s).
Comment by Hieronymus Friday, Oct 21, 16 @ 3:33 pm
Good luck suing an insolvent entity.
Comment by Ron Friday, Oct 21, 16 @ 3:37 pm
Hieronymous, you do realize in Illinois there are two classes of citiznes, the protected public employees and private sector workers that serve them.
Comment by Ron Friday, Oct 21, 16 @ 3:42 pm
== Good luck suing an insolvent entity. ==
Insolvent by CHOICE is not insolvent.
Comment by RNUG Friday, Oct 21, 16 @ 3:44 pm
A choice made in 1972.
Comment by Ron Friday, Oct 21, 16 @ 3:47 pm
“Tier 2 solved the pension problem”
This was done by a governor with second-string talent–as was reducing the bill backlog.
If Quinn was a mediocre or bad steward of our executive branch, how much worse is Rauner?
Comment by Grandson of Man Friday, Oct 21, 16 @ 3:49 pm
And, as covered yesterday, we may find out if a state contract is, in fact, a contract that must be paid.
–Re-read that last sentence … and understand it. Contracts are the basis of capitalism and commerce. You can’t do business without knowing your contract will be honored.–
Wow, that was a powerful. It profoundly disturbs me however that we are in a place where our “framers and founders” didn’t expect us to be. A government which does not govern. A governor willing to let the ship go down unless he gets his way. We crossed the Rubicon some ways back didn’t we?
Comment by Honeybear Friday, Oct 21, 16 @ 3:50 pm
Protect the status quo!
Comment by Shemp Friday, Oct 21, 16 @ 3:56 pm
This state will survive Rauner and we have the ability within our republic to deal with him. It is called elections both house and senate and in a couple more years for Gov. WE also have the third branch of government which has had to work overtime recently raining in the executive and legislative branch. We also have the power, although no where near yet needing it, to use the power of the constitution through our legislative branch to remove a gov. in extreme cases.
Comment by facts are stubborn things Friday, Oct 21, 16 @ 3:58 pm
“Illinois there are two classes of citiznes”
There are the super-rich who’ve had a joke of an individual state income tax, paying low rates for decades–not paying over 3% for the period of 1969-2010.
http://www.revenue.state.il.us/TaxRates/IndividualPriorYears.htm
Look at neighboring states’ historical income tax rates to see what a joke Rauner and his supporters are, in terms of paying their fair share.
Here is an example of a neighbor state’s historical income tax rates (Wisconsin):
https://www.wmc.org/wp-content/uploads/DOR_income_tax_primer_07-25-12.pdf
Comment by Grandson of Man Friday, Oct 21, 16 @ 4:00 pm
It is kind of ironic that folks that have wanted to diminish pensions have forced the courts to absolutely establish that pensions can not be diminished. A pension in Illinois is about as sure of a thing that you can have on this green earth. Nothing is for sure, but pensions in Illinois are the next best thing to it.
Comment by facts are stubborn things Friday, Oct 21, 16 @ 4:01 pm
Huh? There are states with no income tax. And other states have flat taxes as well. Why should we have a graduated income tax to continue a system that protects public workers at the expense of everyone else?
Comment by Ron Friday, Oct 21, 16 @ 4:06 pm
Between - steve schnorf -, - RNUG - and - AA -, if you read them on these issues, you will learn so much about what you don’t know.
Comment by Oswego Willy Friday, Oct 21, 16 @ 4:09 pm
== A choice made in 1972.==
Nope. It was made either about 1910 when the State started shorting pensions, the end of 2014 when the GA let the temporary increase expire, or in 2009 when the increase was passed as temporary instead of permanent.
Or you could argue it was made by Dan Walker in 1974 when decided to short the pension funding for FY75, which then directly led to the IFT lawsuit and subsequent IL SC decision the pensions were protected, BOTH by the new IL Constitution AND previous court decisions under the previous IL Constitution.
Comment by RNUG Friday, Oct 21, 16 @ 4:17 pm
I was referring to the state Constitution. I may have the year wrong. Sorry.
Comment by Ron Friday, Oct 21, 16 @ 4:20 pm
@3:42 No, Ron, just citizens; and as far as the public workforce, it is they who protect the citizenry, and I’m sorry you don’t Recognize that.
Comment by Hieronymus Friday, Oct 21, 16 @ 4:21 pm
No Hieronymous, most public workers don’t do much of anything that should allow them special protections.
Comment by Ron Friday, Oct 21, 16 @ 4:22 pm
== We crossed the Rubicon some ways back didn’t we? ==
We are definitely in uncharted territory, the section labeled: Here Be Monsters.
Comment by RNUG Friday, Oct 21, 16 @ 4:24 pm
== I was referring to the state Constitution. I may have the year wrong. Sorry. ==
The pension clause you are referring to was a REACTION to the State’s previous failures to properly fund the pension systems. If you read the actual transcripts of the 1970 Con-Con (available online), it is clear the drafters expected the threat that the State would have to pay the pensions, no ifs ands or buts, would be enough to ensure fiscal responsibility. They were wrong about the politicians.
Comment by RNUG Friday, Oct 21, 16 @ 4:33 pm
RNUG
Don’t forget Jim Thompson’s “60% of payout” …
Comment by Anyone Remember Friday, Oct 21, 16 @ 4:33 pm
== Why should we have a graduated income tax to continue a system that protects public workers at the expense of everyone else? ==
Ron, are you arguing that contracts should not be honored?
Comment by RNUG Friday, Oct 21, 16 @ 4:36 pm
===…most public workers don’t do much of anything that should allow them special protections.===
… but that pesky constitution…
- Ron -, get over it.
Comment by Oswego Willy Friday, Oct 21, 16 @ 4:37 pm