38 Comments - LTSW - Wednesday, Nov 9, 16 @ 1:40 pm: I just wish these releases would refer to employees and teachers so the public would have a better perspective. 85% of liability is for downstate teachers IIRC. - Last Bull Moose - Wednesday, Nov 9, 16 @ 1:43 pm: Fortunately rhe $$100 billion that was not collected in taxes was invested by the private sector at much higher rates of return. That wealth is available now to pay the debt. Sounds like snark, but that is the logic of taxes rhat don’t cover costs. - Robert the 1st - Wednesday, Nov 9, 16 @ 1:45 pm: How likely will Federal bankruptcy be an option for states with our new Republican legislature and President? - wordslinger - Wednesday, Nov 9, 16 @ 1:46 pm: No worries — priorities first. Flick a couple of switches on workers comp, twist a couple of nobs on collective bargaining, and it will start raining silver dollars. Because that’s how “the economy” has always worked, all over the world. - Last Bull Moose - Wednesday, Nov 9, 16 @ 1:55 pm: I see allowing the States the protections of the bankruptcy court as a very low priority. Right after granting Puerto Rico independence. - Lucky Pierre - Wednesday, Nov 9, 16 @ 1:55 pm: Or you could just propose a constitutional ammendment to restrict the future earnings from the 3 percent COLA. If we can have a safe roads amendment how about a safe pensions ammendment? - wordslinger - Wednesday, Nov 9, 16 @ 1:55 pm: –How likely will Federal bankruptcy be an option for states with our new Republican legislature and President?– How sad is it the Republicans are now known as the Party of Bankruptcy? The president-elect and our governor certainly have been leading practicioners of bankruptcy, breaking contracts and deadbeatism. - Anotherretiree - Wednesday, Nov 9, 16 @ 1:56 pm: ==How likely will Federal bankruptcy == My thought all along. I couldn’t see another endgame for Rauner with the backlog growing so large. I think this is a real possibility now. Of course, the bondholders will take a hit as well. - Liberty - Wednesday, Nov 9, 16 @ 2:01 pm: == Robert the 1st - Wednesday, Nov 9, 16 @ 1:45 pm: How likely will Federal bankruptcy be an option for states with our new Republican legislature and President?== Zero chance.. Congress can’t even get a transparency act passed which would force debt disclosure to keep tax exempt bond status… - Robert the 1st - Wednesday, Nov 9, 16 @ 2:08 pm: That’s funny. I was claiming a “zero chance” of a Trump Presidency yesterday… - Robert the 1st - Wednesday, Nov 9, 16 @ 2:11 pm: Anotherretiree- I agree. I think Rauner is intentionally growing the backlog to some extent. Crisis creates opportunity. - Lucky Pierre - Wednesday, Nov 9, 16 @ 2:11 pm: Wordslinger, Usually the party that has control of cities and states for decades that run up huge debts they can’t pay back would be the “party of bankruptcy”. I notice there are no red states on the verge of bankruptcy. - Bobby Catalpa - Wednesday, Nov 9, 16 @ 2:12 pm: Not sure what the big deal is. Rauner just got a gold box dropped from heaven. I’m sure the GOP majority will make it so state’s can declare bankruptcy, abrogate all unpleasant contracts, and outlaw unions. Once this happens — who cares? Four years from now, the same folks that voted Trump (and Rauner) in office will simply vote them back in office. There’s no political downsides anymore. It’s a free-for-all. - Shemp - Wednesday, Nov 9, 16 @ 2:13 pm: None of it is shocking, and it is only going to get worse as actual investment returns fail to meet the assumed rates of return. - RNUG - Wednesday, Nov 9, 16 @ 2:22 pm: == Or you could just propose a constitutional ammendment to restrict the future earnings from the 3 percent COLA. == Changing the AAI was already rejected by the courts. - BK Bro - Wednesday, Nov 9, 16 @ 2:22 pm: Currently no options for Federal BK. I’d watch the Puerto Rico situation though as that could set a precedent for any future federal BK legislation related to states. It all depends on if the oversight commission established by the Feds is willing to give pensions a haircut that’s relatively equal to the haircut that bond holders will get. Since several states are in similar situation with pension debt, this is becoming more and more likely. IMO this is how the pension debt story in Illinois will end. Illinois will not correct this on their own. - Illinois Bob - Wednesday, Nov 9, 16 @ 2:27 pm: Sorry. This MUST be paid. No many left for raises in new contracts, discretionary spending, capital work not safety related and expansion of ANY program that costs more than it saves. This is what decades of political malfeasance and Corruption leads to. - JS Mill - Wednesday, Nov 9, 16 @ 2:27 pm: =85% of liability is for downstate teachers IIRC.= You do not recall correctly. All public school teachers outside of the Chicago Public School System are in TRS. That includes the very large number of suburban teachers (out numbering so called downstate teachers). Bankruptcy is simply idiotic. Basically advocates are saying we will welch anytime we want or because I do not have it you won’t get it. Sounds like real grown ups. How about paying a debt owed? - Romeo - Wednesday, Nov 9, 16 @ 2:32 pm: It’s only a taxpayer liability to those who choose to stay/can’t leave. - RNUG - Wednesday, Nov 9, 16 @ 2:39 pm: As the story says, the lowered discount rate and higher life expectancy assumptions accounted for about 3/4’s of the increase. Also, under the current ramp plan, the pension debt will continue to grow until around FY2029. If you don’t want the debt to grow, the ramp needs to be charged to flat payments about $1.5B to $2.0B higher than the current payments. If you’re not willing to pay the extra amount now, then we will be reading these stories for the rest of our life. - whiggy - Wednesday, Nov 9, 16 @ 2:41 pm: No worries. Mendoza can just right a check. - Anonymous - Wednesday, Nov 9, 16 @ 2:42 pm: So why would anyone whine about this growing debt and at the same time, wallow in the abyss of not looking for any kind of remedy? This is what kids do. Whine and complain while sitting on their…. Yes, I believe Rauner is deliberately doing nothing to grow this into an ever greater monster in hopes that the crisis will become so unbearable that somehow it won’t have to be paid. Should retirees be stiffed (yet again), just remember that taxpayers will still be paying for them one way or another. You can’t just dump them off of a bridge and they disappear. Since they were public employees, entitled to a public pension they paid their part of, they will get public funds to live on one way or another. - facts are stubborn things - Wednesday, Nov 9, 16 @ 3:22 pm: Keep in mind we do not have a pension problem, but rather a debt problem due to the fact that our officials did not make the required pension payments. The pension dollars were spent on other programs which were not paid for. - Rich Miller - Wednesday, Nov 9, 16 @ 3:28 pm: ===but rather a debt problem=== It ain’t just a problem. - lake county democrat - Wednesday, Nov 9, 16 @ 3:30 pm: The purpose of the bankruptcy laws is to give people a fresh start, even if that means hurting some of the creditors. If a corporation can be a person, why can’t certain government entities? At the very least, it shouldn’t be an unquestionable bad. - BK Bro - Wednesday, Nov 9, 16 @ 3:40 pm: - JS Mill - The use of BK even by cities that are afforded access to it in other states is extremely rare. There are market consequences to declaring BK - no one hopes to be in BK. Interest rates will probably always be higher for cities/eventually states that do declare BK. That’s the price Illinois will eventually pay. Short of an economic miracle or a tax hike way bigger than what pols are proposing, there’s just no way Illinois can ever pay down that debt. Safe roads amendment is a clue to the future. Road funds go to roads. General taxes go to pensions. Whatever is left over from general taxes goes to other services. The “whatever is left over” is going to get smaller and smaller every year. - wordslinger - Wednesday, Nov 9, 16 @ 3:58 pm: –Usually the party that has control of cities and states for decades that run up huge debts they can’t pay back would be the “party of bankruptcy”.– Harrumph, approved partisan talking point, harrumph, approved partisan talking point….. LP, if you ever paid attention to anything beyond your own robotic talking points, you’d understand that shorting pensions has been something Republicans and Democrats have agreed upon in Springfield since the beginning. And no states are “on the verge of bankruptcy” as they are going concerns with sovereign powers. It’s not a matter of “can’t,” it’s “don’t want to.” Republicans, certainly in Illinois, are the Party of Bankruptcy as they, starting with the governor, are the ones advocating it. - City Zen - Wednesday, Nov 9, 16 @ 4:06 pm: ==Usually the party that has control of cities and states for decades that run up huge debts they can’t pay back would be the “party of bankruptcy”.== There is moral bankruptcy, and there is financial bankruptcy. - City Zen - Wednesday, Nov 9, 16 @ 4:09 pm: ==It’s only a taxpayer liability to those who choose to stay/can’t leave.== It’s not a lie…if you believe it. - George Constanza - LTSW - Wednesday, Nov 9, 16 @ 4:12 pm: JS Mill, I should have said TRS. That was my intent. I was involved in writing a report about the pension debt that the Auditor General issued back in the late 80’s. It was met with a “no big deal” by the legislature back then. - Demoralized - Wednesday, Nov 9, 16 @ 4:14 pm: I can’t believe we are even having this ridiculous bankruptcy discussion. I know some of you get all giddy about ways to get around the pension mess but when you get to this level of discussion it’s just ridiculous. - City Zen - Wednesday, Nov 9, 16 @ 4:29 pm: ==The pension dollars were spent on other programs which were not paid for.== Spent on employee compensation as well. - Robert the 1st - Wednesday, Nov 9, 16 @ 5:48 pm: Lucky Pierre- you forgot where you were posting. This is “shut up and pay for what we bargained for ourselves” land. We even have a constitutional amendment that says so. - blue dog dem - Wednesday, Nov 9, 16 @ 5:53 pm: ….but wait. That wouldn’t be fair. Many of those having their taxes raised weren’t even born when these promises were made… - Anonymous - Wednesday, Nov 9, 16 @ 6:09 pm: BKBro at 3:40 Whatever is left over after paying pensions? Remember that the pensions were used to pay for all the whatever first and they were stiffed. That’s how we got here. Facts matter. - foster brooks - Wednesday, Nov 9, 16 @ 6:24 pm: Illinois is a sovereign state, they have the ability to raise revenue. You would have to amend the US constitution - anon - Wednesday, Nov 9, 16 @ 6:26 pm: === How about paying our debts? === Almost all GOP legislators call themselves “fiscal conseravtives.” That used to mean paying debts, not welshing on them. Not anymore. - Robert the 1st - Wednesday, Nov 9, 16 @ 6:31 pm: So if people don’t want to pay for overly generous benefits that politicians gifted themselves and special-interest groups in exchange for political support they are not “fiscal conservatives.” In some cases before they were even born. Got it. Sorry, comments for this post are now closed.