72 Comments - Yellow Dog Democrat - Wednesday, Aug 29, 12 @ 12:35 pm: You always have to read between the lines with these rating guys (who choose their words as closely as the Federal Reserve), and one word is clearly missing from their lament: “Comprehensive.” As in “comprehensive pension reform,” which the GOP and friendly editorial boards have been demanding. But it seems to me that Quinn and Democrats are correct that the analysts would at least like to see a first step. - Quote - Wednesday, Aug 29, 12 @ 12:35 pm: Few people will note the words “…significant measures in the past two years to improve structural budget performance” in the S&P release. Pat on the back to Dave Vaught. - Quinn T. Sential - Wednesday, Aug 29, 12 @ 12:43 pm: Does this mean Madigan, Quinn & Cullerton will blame S&P when they make the tax increases permanent. - dupage dan - Wednesday, Aug 29, 12 @ 12:43 pm: Why worry? The bonds will go like hotcakes so it won’t cost Illinois more in interest to borrow money. We should, however, be worrying about the other end of the issue - not enough revenue and too much liability. Not much going on in that arena, is there? - Grandson of Man - Wednesday, Aug 29, 12 @ 12:44 pm: I thought that Gov. Quinn was organizing a commission to study a progressive income tax. Since S&P is saying that the income tax expiration could hurt the state’s finances, why not try to reform Illinois’ tax? I don’t see how we can let the tax increase expire and still deal with our financial obligations. If we ultimately decide on keeping the increase, why not instead try to replace it with something fairer? There was a poll out a few years ago, in which a strong majority of Illinois voters favored the progressive income tax. I realize that income tax reform is a very steep hill to climb, but so is pension reform. - cover - Wednesday, Aug 29, 12 @ 12:51 pm: - “I realize that income tax reform is a very steep hill to climb, but so is pension reform.” - Pension reform might be a molehill compared to the steep hill of income tax reform. A progressive income tax would require a constitutional amendment - and thus needs a 3/5 vote by the General Assembly to be put on the ballot. That’s simply not going to happen. At least pension reform only requires a simple majority, though even that’s proving hard to achieve. - Crime Fighter - Wednesday, Aug 29, 12 @ 12:52 pm: ==”a strong majority of Illinois voters favored the progressive income tax.”== A majority doesn’t matter when Illinois policymakers pander to the Tribbies, Civic Federation, Chamber, and the like. & ==“…significant measures in the past two years to improve structural budget performance”== Facts don’t matter when your main goal is to protect the high-dollar folks from a service tax or progressive income tax. - Sue - Wednesday, Aug 29, 12 @ 12:52 pm: We have reached a new pathetic low- Even California announced today a reform of its pension program requiring an increased employee contribution and an increase in the retirement age- what will it take for Illinois- Rhode Island has done it, WI, Ohio, NJ and now even California- our political gridlock will continue until we are frozen out of the debt markets unless we are willing to pay even higher obscene rates then we are already paying- according to Barrons last week article on state finances, Illinois already pays the absolute higherst interest on our borrowing- 157 basis pts over treasuries- what needs to occur isn’t rocket science since other states are figuring out what to do- unfortunately Quinn is an inept Governor, Madigan is gaming to do something self serving and the Unions sit back and just smile - we will end up like Maryland where the more mobile among us just choose to move somewhere else - Fight for Chicago - Wednesday, Aug 29, 12 @ 12:55 pm: A progressive income tax didn’t help the US solve it’s 16 trillion budget debt problems. Let’s get out of fantasy land and stop fighting a war against math please. - Small Town Liberal - Wednesday, Aug 29, 12 @ 1:01 pm: - Let’s get out of fantasy land and stop fighting a war against math please. - Last time we had a budget surplus in the US there was a higher progressive income tax. Stop fighting a war against math indeed. - Plutocrat03 - Wednesday, Aug 29, 12 @ 1:03 pm: “protect the high-dollar folks from a service tax” regular folks don’t use services? really? The fact is that the vast volume of of commerce is conducted by people in the income scale that is considered normal. When you come up with new taxes and fees, the impact will be mostly on the regular folks. It is nothing but misdirection to claim that any of the State’s fiscal problems can be solved by soaking the rich further. There are too few high earners out there to offset the loony spending the state is engaged in. - wordslinger - Wednesday, Aug 29, 12 @ 1:03 pm: Illinois bonds look a little better for the investor. Yields are still lousy, but they are for all bonds right now. Thanks to S&P for the advice. They’re the guys that downgraded the United States — sparking a bull run in Treasuries — but told us those subprime mortgages were AAA. Yeah, I don’t think you’re honest or smart. Sue, let me know when Illinois is frozen out of the debt markets. If you haven’t been paying attention, the invisible hand of the market is pretty sweet on Illinois debt. - cover - Wednesday, Aug 29, 12 @ 1:20 pm: - “the loony spending the state is engaged in” - What exactly constitutes “loony spending”? And once defined, how much does Illinois actually spend (of its own $, not counting federal funds) on such items? I’m not trying to give the feds a pass, but fixing the federal budget doesn’t really help the state budget - although given the size and scope of the federal budget, there are likely to be more categories of “loony spending” by the feds, and in larger amounts, than the state could ever imagine. - Crime Fighter - Wednesday, Aug 29, 12 @ 1:26 pm: @ Plutocrat ==”regular folks don’t use services? really?”== Yacht cleaning, valet, spa, and on and on. I guess you mean regular folks from the Chamber or Civic Federation. ==There are too few high earners out there to offset the loony spending the state is engaged in.=== It works in most other states. But it’s Illinois - pity the billionaire! - Bill - Wednesday, Aug 29, 12 @ 1:26 pm: == A progressive income tax would require a constitutional amendment - and thus needs a 3/5 vote by the General Assembly to be put on the ballot.== So does most of the stuff they are calling pension reform. - wordslinger - Wednesday, Aug 29, 12 @ 1:40 pm: –the loony spending the state is engaged in.– Loony schools. Loony nursing homes. Loony hospitals. Loony state troopers. Loony roads. It’s crazy. Why should I have any responsibility for any of those things? I’ve never gone to school, or a hospital or used the roads. And I don’t care if anyone else ever has use for them either. See, it’s all about me, all the time. That’s what they taught us in Sunday school. - Just a Guy - Wednesday, Aug 29, 12 @ 1:42 pm: I’m not a fan of how Quinn says we need to eliminate the $83 billion unfunded liability to get our financial house in order. I am unaware of any plan that eliminates the unfunded liability before 2043. It seems like the statement that implies that we can’t have our financial house in order until 2043 or he has a secret plan to eliminate the $83 billion just like that… - Judgment Day - Wednesday, Aug 29, 12 @ 1:44 pm: Word, you’re missing something. “Warren Buffett has slashed half of his entire municipal exposure, in what the WSJ has dubbed a “red flag” for the municipal-bond market.” Link is http://www.zerohedge.com/news/buffett-joins-team-whitney-sees-muni-pain-ahead-he-unwinds-half-his-bullish-exposure-ahead-time About ten days ago, Berkshire Hathaway (Uncle Warren’s primary investment vehicle) disclosed that it had terminated $8 billion of municipal derivatives contracts on insurance written on those muni bonds. That’s about 50% of what their total muni insurance holdings, the remainder being unable to terminate due to ‘timing considerations’. And they lost a LOT of money on making those early terminations - how much, still undisclosed. When you see Uncle Warren (the premier Crony Capitalist, himself) moving those types of numbers and taking a big time loss, there’s a message there. When one of the biggest, and probably the most stable insurance underwriter for muni bond issues dumps half their portfolio at a big loss, and wants to dump the rest, but can’t (yet), what makes anybody think they’ll want to underwrite insurance on more, newer muni bonds? - wordslinger - Wednesday, Aug 29, 12 @ 1:59 pm: –This is a clear signal that we must work on a comprehensive bill that solves our pension problem—not a piecemeal approach. The blame game must end, let’s get to work.” – Let’s see the bill. JD, I know you’re down on munis (the market isn’t) but surely you must recognize some differences between a sovereign state’s GO and rinky-dink revenue bonds. Not all munis are created equal. - Grandson of Man - Wednesday, Aug 29, 12 @ 2:03 pm: Plutocrat03, I don’t think anyone is saying that a progressive income tax will solve all of the problems, but we should look at it to see if it can ease the burden of cuts. I believe that we will extend Illinois’ income tax increase in some form. Why not try to make it fairer? It’s the same thing with the federal budget. Raising the capital gains tax, reducing corporate tax breaks and subsidies and raising the income tax on top earners won’t solve our debt, but it can help ease cuts that would affect poor and sick people, or it can be used for our benefit in other ways. Also, I don’t think that “slight” tax increases on the most wealthy is soaking them. Many wealthy people support income tax increases for themselves, to help ease cuts to the poor and sick. - wordslinger - Wednesday, Aug 29, 12 @ 2:13 pm: –“There could not be a more stark contrast between Wisconsin and Illinois,” Walker said – You got that right, little buddy. Illinois GDP: 644,200 M Wisconsin GDP: 251,400 M Fortune 500 HQs: Illinois: 32 Wisconsin: 9 Keep that in mind the next time you come crawling south to the big city to beg for scraps. http://www.jsonline.com/news/statepolitics/wisconsin-a-place-to-expand-walker-tells-chicagoans-rj5tats-160312265.html - OneMan - Wednesday, Aug 29, 12 @ 2:14 pm: The problem I have with what I have seen proposed in Illinois (even the thing Quinn pushed a few years ago that was on the ballot as an advisory a few years ago ) is that it is a hard deck everyone who makes about X pays Y on everything above X. You want a progressive tax, lets to it right, no two tier just charge more to those who make more than me system.. I had to look up some tax stuff the other day (wife has a new job and needed to do some math to figure out how much withholding she needed) and ended up doing some quick math on what I pay the feds, state and property taxes. I was blown away by how much it was…. I am a blessed man that I have to pay that much in taxes, I get that. But don’t argue I don’t pay my fair share and do something serious before you want even more out of me. This isn’t just a revenue issue. - foster brooks - Wednesday, Aug 29, 12 @ 2:17 pm: How long has Wisconsin had a 6.5% income tax? - wordslinger - Wednesday, Aug 29, 12 @ 2:25 pm: FB, the max individual income tax rate in Wisconsin is 7.75%. The lowest rate is 4.6%. Big talkers, big taxers. - wishbone - Wednesday, Aug 29, 12 @ 2:49 pm: “Continuing pension problems have earned Illinois another reduction in its credit rating.” Looking at this problem as an isolated “pension problem” that can be fixed by fiddling with the pension system is simply myopic. We are in an $83 billion hole. That’s $6,500 for every man, woman and child in the state. There is only way to solve this problem without bankrupting either the taxpayers (as Rich has pointed out tax increases are a once per generation opportunity, and we have had ours), the current or future pensioners, or every other state program. Common sense dictates that only across the board percentage cuts where every recipient of state funding (including current pensioners) bears a proportional burden will solve this problem. As many have pointed out deferring this solution only makes the problem worse. - Robert the Bruce (formerly just Robert) - Wednesday, Aug 29, 12 @ 2:51 pm: @wordslinger, you are correct that Illinois will still be able to borrow money quite easily and that interest rates generally are at historic lows so the cost to borrow isn’t that great. However, because the governor and legislative leaders haven’t accomplished anything on pension reform, Illinois taxpayers ultimately do pay higher interest rates on Illinois state debt than do taxpayers of other states. I’m just not sure what this annual extra interest rate cost (call it the “kick the can down the road” cost) is. - VanillaMan - Wednesday, Aug 29, 12 @ 2:58 pm: Being downgraded by S&P is like being told by a vampire that you look a little pale. Investors don’t wait for an S&P recommendation. They jumped ship months ago. - Judgment Day - Wednesday, Aug 29, 12 @ 2:59 pm: Word: “JD, I know you’re down on munis (the market isn’t) but surely you must recognize some differences between a sovereign state’s GO and rinky-dink revenue bonds. Not all munis are created equal.” Am I down on tax exempts? No. Am I down on tax exempts where the underlying financial fundamentals are shaky at best? You bet. Guess where the State of IL falls? Back in 2007, when Bear Stearns first went into the dumpster on the 2 MBS/SIV deals, those were just considered to be ‘isolated incidents’ in the marketplace & all was still good with the world. Fast forward 8 months later - not so much. These days with muni’s, it’s all about the “story behind the story” - what’s the real fiscal picture for each local (and state) government entity. Just because everything is covered under the “full faith and credit” terms (like almost all GO bonds), what if there just isn’t enough “full faith and credit” available to cover all of the fiscal obligations of the local/state government? That’s a problem. - Rich Miller - Wednesday, Aug 29, 12 @ 3:03 pm: ===Investors don’t wait for an S&P recommendation. They jumped ship months ago. === Actually, Illinois’ last bond sale was way oversubscribed. - dupage dan - Wednesday, Aug 29, 12 @ 3:04 pm: Yep, Wisconsin ain’t got nothing on Illinois. You betcha. We certainly have taken the budget bull by the horns and done the hard work of wrestling our out of control financial situation here in Illinois. Not like those profligate losers up north. No way no how. Up there they got a governor who told the folks what he was going to do and then did it. They have a working DNR that has figured out how to bill users directly and keep their state parks open - imagine that! Their small market ball team is whooping our big market, “beloved” cubbies. They may not have as much stuff up there in the wasteland northwoods but they seem to be taking care of business better than we are. - dupage dan - Wednesday, Aug 29, 12 @ 3:13 pm: I wonder why we keep hearing about the fact that the bonds sell well despite a downgrade by the rating agencies. Does that mean all is ok in Illinois? If so, why do we keep hearing about how bad things are in the budget? The comments made about how fast these bonds sell out despite the lower rating seem to suggest that all is not bad here in Illinois. Can one be connected to the other in a straight line? If not, why is it we have this back and forth every time the issue is brought up? - Jechislo - Wednesday, Aug 29, 12 @ 3:19 pm: Anybody know where the Unions stand on the issues of State Government future pensioners and current employees paying an increased contribution and agreeing to increase the age at which they can retire? I’m somewhat baffled that this seems to never come up in the conversation where I think it should be the focus of conversation. I mean, where are the Unions in this whole scenario? - Michelle Flaherty - Wednesday, Aug 29, 12 @ 3:23 pm: Sue, I believe California’s reform package is for new gov’t employees, like the one Illinois approved two years ago. - Judgment Day - Wednesday, Aug 29, 12 @ 3:25 pm: DD, bottom line - Investors are desperate for yield. When the FRB (Federal Reserve Board) has pushed interest rates to current levels with their money printing, we effectively have almost negative rates of return if you buy Treasuries. If 10 year Treasury is right around 1.63, and inflation is running right at 2.00, do the math. If you have got to have a positive yield, well, tax exempt State of IL GO bonds look pretty good - Today. - wordslinger - Wednesday, Aug 29, 12 @ 3:31 pm: –Investors don’t wait for an S&P recommendation. They jumped ship months ago.– Simply untrue. In March, the state sold $575 billion in bonds. They got orders for $2.3 billion. - SO IL M - Wednesday, Aug 29, 12 @ 3:40 pm: Raising taxes will not fix this problem. Only reducing the State pension Obligation will. The best way for all involved, though it wont be popular is to move all contributions to the Employee. This takes the State portion off of the taxpayers, and doesnt shift it to the school districts. It can be done, and doesnt need any constitutional change. Several thousand State Employees now make their whole contribution, with the State not making any. Its time for this to be applied across the board to all pension plans. State Employees on the Alternative Formula accepted it knowing that it was the best way to insure that the payments were made, and would help to keep the system solvent so they could count on their pension being there. Combine this with restructuring the repayment of funds the State now owes. Restructuring the payment plan is better than default on the payments. But boy will people yell over that plan. - Crime Fighter - Wednesday, Aug 29, 12 @ 3:55 pm: Illinois seems to be following the Walker’s lead: Tax breaks for favored businesses, plead broke, and launch ideological attacks on lower middle class workers. - Demoralized - Wednesday, Aug 29, 12 @ 3:59 pm: SO IL: I hope you are joking. - Arthur Andersen - Wednesday, Aug 29, 12 @ 4:02 pm: SO IL M, your premise is incorrect. Employees in the SERS Alternative Formula pay a higher contribution rate because they do not receive Social Security. Nowhere is it stated or claimed that the member contribution rate for this group represents the “whole contribution” or full cost of the benefit. See SERS Member Guide or 40 ILCS 5/14 if you don’t believe me. - Yellow Dog Democrat - Wednesday, Aug 29, 12 @ 4:04 pm: @SO IL M- That’s one sure way to convince everyone who is eligible to retire. Then what? - Liberty First - Wednesday, Aug 29, 12 @ 4:04 pm: The state has to make up the skipped contributions instead of kicking the payment can down the road again and again and again. - Dirty Red - Wednesday, Aug 29, 12 @ 4:06 pm: Let’s recap: Gov. Quinn started the day off by saying, “I told you we couldn’t afford the stuff we promised on years ago!” Then he drove to UIC where he announced they were constructing a multi-million dollar science building that is being partially funded by gaming revenue he doesn’t support. Then he rode his magic carpet to Moline and broke ground on an additional campus for a university that already has trouble funding its flagship. Oh, dear sweet irony. Thy taste is delicious. - Sue - Wednesday, Aug 29, 12 @ 4:08 pm: Wordslinger- learn how to read financials- If you have a copy of Barrons available from last week they ran an article on State Finances- Illinois is paying the highest interest rate on its borrowing- sure the bonds are selling because default is still unlikely but we are paying the absolute biggest spread over treasuries then any state in the USA- all that additional interest expense is freezing out other programs- you are entitled to any opinion you want to have but at least recognize the facts and the facts are that Illinois is at the bottom of the heap when it comes to fiscal matters - Demoralized - Wednesday, Aug 29, 12 @ 4:12 pm: Sue: We fully understand your campaign against state employees and the state in general. Your point has been made. - reformer - Wednesday, Aug 29, 12 @ 4:16 pm: Wisconsin has a graduated income tax and its sales tax cover services. If IL had the WI tax system, it would produce several $billion more in annual revenue. - Yellow Dog Democrat - Wednesday, Aug 29, 12 @ 4:22 pm: Not to beat a dead horse, but the GOP response is laughable. How do you interpret “lack of action on reform measures” to mean “we must pass comprehensive reform”? The bond houses are always pleased by signs of progress. They were pleased by the temporary tax hike — no one claimed it was a comprehensive solution. Trust me…if we enact legislation reducing Illinois’ unfunded pension liability from $80 billion to $50 billion, they will be thrilled. Maybe, to Sue’s point, it should include language that ensures that every penny saved on interest rates goes back into the pension fund. - reformer - Wednesday, Aug 29, 12 @ 4:28 pm: == loony state spending == IL ranks as one of the ten lowest-spending states as a percent of state GDP or per capita. IL has the fewest state employees per capita of any state. IL provides the lowest percentage of education funding of any state. IL adopted record cuts in Medicaid in FY 13, even though our costs per person were already more modest than most states. Yet we have $8 billion or so in umpaid bills. Just how much farther must spending fall before conservatives recognize we have a revenue problem? - Michelle Flaherty - Wednesday, Aug 29, 12 @ 4:35 pm: Reformer, I think that’s what Walker was advocating for during his trip to Springfield. Wasn’t he lobbying the chamber o’ commerce to support Wisconsin-style taxes? I thought I read that somewhere. - wordslinger - Wednesday, Aug 29, 12 @ 4:49 pm: All that extra interest, Sue? Rates are at historic lows. No one is saying the state doesn’t have issues. But investors vote with their wallets and they’re bullish on Illinois paper. The rest is just spin. - SO IL M - Wednesday, Aug 29, 12 @ 4:59 pm: Arthur Anderson—See 40 ILCS 5/14-133. I believe you are confusing Alternative versus Regular formula with covered versus non-covered employees. YDD—Hope that all employees can see far enough ahead to realise that this situation will get worse and face possible collapse before they reach retirement age if nothing is done to reduce the State Obligation. Hope,but dont bet on it. - Plutocrat03 - Wednesday, Aug 29, 12 @ 5:14 pm: Look around the the hundreds upon hundreds of taxing bodies with their own revenues who do the things that other states do from their general revenues. It’s all a shell game. Add the spending of those additional taxing bodies to the overall spending and the statistics you quoted will be blown out of the water. - Yellow Dog Democrat - Wednesday, Aug 29, 12 @ 5:24 pm: @SO IL M - I don’t know how state employees are at seeing the future, but I’m fairly confident they can read the Illinois Constitution. Pension benefits are an ironclad guarantee. Well…I shouldn’t say “ironclad.” There are defenses to “breach of contract,” but I don’t believe any of them are applicable in this case. BTW: Something no one is really talking about yet, but I think is worth exploring in some future Capitolfax thread. It’s my assumption that if a pension bill does pass, the Attorney General will end up defending the state in court. Thoughts? - walkinfool - Wednesday, Aug 29, 12 @ 5:44 pm: A couple more bottom-line facts: Total tax burden on Illinois businesses is still lower than in Wisconsin, when everything from every level is counted. Jobs performance in Illinois is still better than in Wisconsin, on virtually any metric. Scott Walker tells a great story, but it is basically false. - SO IL M - Wednesday, Aug 29, 12 @ 5:47 pm: YDD I know how they are at seeing the future…not real good. But back in the early 90’s during contract negotiations when the State offered to start making the full contribution, with employees making none, instead of pay raises, there were many employees against this. They were against it because the State wasnt making their share of the contributions then, so they didnt trust the state to make both portions. They turned out to be right. So in recent years when faced with the option of the employee picking up the entire 8.5% contribution on their own, they took it. Granted it was incremental over a few years, and as the percentage paid into the pension, there was a pay raise equal to that amoount. But at least the money did start actually going into the Pension Fund. I still see this as the most reasonable way to reduce the State obligation, and not just shift it from state taxes paying for it or local property taxes covering it. Granted it wont eliminate it all together, just reduce it. Hopefully to a manageable level. - Crime Fighter - Wednesday, Aug 29, 12 @ 6:02 pm: Highly likely the AG will defend in state court. The AG is notorious for supporting all kinds of actions against employees regardless of apparent improprieties on the part of state agents. The other part of this is that state courts are often biased in favor of the AG when it comes to anti-employee matters. Remarkably, I’ve seen arguments actually created on behalf of the AG by the 4th district appellate (Springfield)court judges to rescue the state’s case, and subsequently upheld by the IL Supreme Court. It’s Illinois, so don’t be surprised if Quinn, Cullerton, & the Madigans ultimately get away with this. - Anon - Wednesday, Aug 29, 12 @ 6:24 pm: I have to laugh when I read comments calling for higher taxes. If Illinois government was run efficiently like a business, I reckon that half of all government spending would be elimnated with improved results. But keep on pushing for higher taxes; that will only push away voters. - western illinois - Wednesday, Aug 29, 12 @ 6:25 pm: http://blogs.sacbee.com/the_state_worker/2012/08/read-the-california-public-pension-reform-bill-california-state-and-local-jerry-brown.html The California pension bill applies to new workers only but as one commentator notes Thye will be coming after the existing ones(like Illinois) They are claiming 60 billion in savings Quinn Claimed 140 billion on ours Atty Gen is defending the health bill …. - western illinois - Wednesday, Aug 29, 12 @ 6:29 pm: I found a bond quote site You can compare IL and WI rates http://wisconsin.municipalbonds.com/bonds/recent/ - Crime Fighter - Wednesday, Aug 29, 12 @ 7:05 pm: See Anon @6:24pm: problem solved - ===I have to laugh when I read comments calling for higher taxes. If Illinois government was run efficiently like a business, I reckon that half of all government spending would be elimnated with improved results.=== Run the state like Enron or one of the bailed-out businesses and eliminate half of our debt. Genius! - Steve - Wednesday, Aug 29, 12 @ 7:06 pm: “At least pension reform only requires a simple majority, though even that’s proving hard to achieve.” I think you better read the Illinois Constitution, concerning the retirees part of it!! as far as being diminished or impaired. Law suits can be expensive…… - mushroom in the dark - Wednesday, Aug 29, 12 @ 7:08 pm: I believe only one state has defaulted on bonds in history, Arkansas during the 1930s depression, due in part to some kind of flawed or dubious issues in that state. Remember the ratings agencies also rated triple A mortgage backed securities that consisted of zero down, no doc loans to people with no hope of paying the loans unless the value of the property went up enough to cover the loans or allow a refinance . This rating talk is overrated as to its meaning. That does not mean the structural deficit should not be fixed. One thing that could be done is refinance the existing debt at near record low interest rates. This would cause little pain and would be a smart financial move for the state. - Whisperer - Wednesday, Aug 29, 12 @ 7:26 pm: @ SO Il M…employees in the alternative formula do not make their entire pension payment. They pay 12.5% of what actuaries say should be a 19.5% payment to ensure the rate of return required to fund their pensions. - Arthur Andersen - Wednesday, Aug 29, 12 @ 9:10 pm: SO IL M, I incorrectly intertwined the Alt Formula with non-coordinated members of SERS. My mistake. However, as Whisperer correctly notes above, no SERS members pay the full cost of their pension, regardless of formula or coordinated/non-coordinated status. - western illinois - Wednesday, Aug 29, 12 @ 9:51 pm: reformer makes some very good points. I would add we dont get the federal reimbursement rate that many esp southerns states get while offering only the most minimal benefits. Most state universities in other states are getting serious cuts as well. Ohio State is near zero. For certain suburban schools and maybe teh state university system the pension will be the only state money - Top of the State - Wednesday, Aug 29, 12 @ 10:34 pm: Wisconsin bashers… Why is the Wis pension fund the best in the country, and why are our pensions in IL the worst? - Shemp - Wednesday, Aug 29, 12 @ 10:43 pm: So what I have read is: -it is ok to pay more than nearly every state in interest because rates are at near-record lows -there’s a revenue problem because our state is lean in some areas (which then completely ignores all of our layers of local government almost no one else has and ignores some of the laws & regs that drive up the costs here) -we have an $80+ billion pension problem, but if we could make it $50 billion, that would be big (which may be half true if not for the problem of the expected rate of return still at 8.5% which means that $80billion is way understated. - Anon - Wednesday, Aug 29, 12 @ 11:55 pm: Crime Fighter wrote: Run the state like Enron or one of the bailed-out businesses and eliminate half of our debt. Genius! === You are so smart. Yes, all private businesses are criminal enterprises or receive government bailouts. You sound like a community organizer we all know. - Truthteller - Thursday, Aug 30, 12 @ 5:51 am: Presume that the pension bills being floated are unconstitutional. Then what? What’s plan B? Will we make the two-thirds of the corporations which pay no state income tax start to pay their fair share so we don’t have to rob the pension funds to pay for public services? Will we close the tax loopholes whose expenditures top $1 billion every year, will we impose taxes on those less able to afford them and make our tax structure even more regressive, or will we shred the safety net even further than was done this year? Which path is fairer and makes more sense? - Yellow Dog Democrat - Thursday, Aug 30, 12 @ 6:37 am: @Truthteller - I think taxing retirement income and broadening the sales tax base are probably in the mix. Also, winnowing down the retailer’s reimbursement rate and local share of the sales tax. I’m actually for completely abolishing the local share of sales tax revenue but allowing localities to impose their own. In the era before computers, this would have been complicated. Its not anymore. At the end of the day, just as we’ve learned with state payments of local pension costs, having state government serve as the tax collector for local government and retail giants like Wal-Mart is bad fiscal policy. You can’t have the state imposing sales taxes and local city councils deciding how to spend it. As long as the taxer and the spender are two different bodies, you get no restraint on spending. - the Patriot - Thursday, Aug 30, 12 @ 7:55 am: Rich, For the sake of sake of journalistic integrity, I suggest you start calling them senior legislators and Governor. A meeting consisting of IL leaders sounds like an empty room to me! - dirt diver - Thursday, Aug 30, 12 @ 8:11 am: ===Investors don’t wait for an S&P recommendation. They jumped ship months ago. === Vanillaman, when is the last time Illinois defaulted on bond payments? If anything, investors are going to flock to these bonds, especially if interest rates are increased. - capncrunch - Thursday, Aug 30, 12 @ 9:48 am: “As long as the taxer and the spender are two different bodies, you get no restraint on spending.” Like Medicare? Sorry, comments for this post are now closed.