* Center Square…
A state Supreme Court decision in Rhode Island could possibly remove a hurdle to reforming Illinois’ pension debt load, but an expert said lawmakers here would first have to change course.
Rhode Island’s highest court ruled earlier this month in Cranston Police Retirees Action Committee v the City of Cranston that the city could freeze a cost of living adjustment for its police and firefighter retirees and not break the U.S. Constitution’s Contract Clause protection.
Mike Stenhouse, CEO of the Rhode Island Center for Freedom and Prosperity, said the city of Cranston’s budget was so upside down that the benefit freeze was deemed reasonable and necessary, a designed exception in interpretations of the clause.
“Cranston was in such financial distress that you couldn’t reasonably tax anymore,” he said. […]
Ralph Martire, with the Chicago-based Center for Tax and Budget Accountability, said Illinois wouldn’t make it that far because the state’s constitution protects any pension from being diminished. […]
Democrats in control of the General Assembly have shown little appetite for changing that protection, even though the state has more than $137 billion in unfunded pension liability, billions more in unfunded healthcare costs. Municipalities in Illinois have billions more at the local level for police and fire pensions.
Mark Glennon, founder of Wirepoints, said the important aspect of the Rhode Island opinion is that it refutes a common talking point that changing Illinois’ constitution to allow for changing established pension contracts is a fool’s errand because the Contracts Clause would kill the effort.
“We’re applying the same law that would be applied in Illinois if we ever follow the same route and the same challenge was there,” he said.
* Cranston was an extreme case…
The high court observed that the city faced “dire” financial straits when [Mayor Allan W. Fung] assumed office in 2009. Unemployment soared and property values plummeted by $1 billion. Those factors were compounded by dramatic cuts to state aid and “devastating” flooding in 2010. As a result, the city cut jobs, eliminated city vehicles and increased health-care costs for its employees.
State lawmakers in 2011 passed the Rhode Island Retirement Security Act, aimed at helping cities and towns manage their pension liabilities and remain stable. That law enabled municipalities to submit improvement plans if an actuary determined that a pension plan was in “critical” status, meaning that it was less than 60-percent funded.
In June 2011, the unfunded liability in Cranston had risen to $256 million. A year later, it was funded at only 16.9 percent.
Emphasis added because we have only a handful of smallish first responder pension funds in Illinois that are in worse shape than that (for a total of about $100 million in unfunded liabilites in nine funds as of 2016).
The General Assembly Retirement Fund, however, was only 14.8 percent funded at last report.
Even so, the General Assembly would first have to vote to change the constitution (not gonna happen in the foreseeable if ever future) and then voters would have to approve it (risky proposition since the unions would be dead set against it) and then and only then could a federal case be made if any local governments actually started cutting benefits to retired cops and firefighters (very difficult to do).
- Ole' Nelson - Tuesday, Jun 18, 19 @ 10:39 am:
It seems that nothing makes Mark Glennon quite so happy as “a ray of hope” that Illinois will be able to break pension promises and stiff workers.
- Three Dimensional Checkers - Tuesday, Jun 18, 19 @ 10:43 am:
The Supreme Court came up with this dire straits or emergency exception to the federal Contract Clause during the Great Depression to justify state programs that interfered with private contracts. I do not think Illinois would be able to show that its pension financial constraints are similar to the Great Depression.
- Oswego Willy - Tuesday, Jun 18, 19 @ 10:47 am:
===I do not think Illinois would be able to show that its pension financial constraints are similar to the Great Depression.===
… especially if the graduated income tax passes and it becomes law, as 97% will see no change in their income tax rate… so there’s untapped taxing room the legislature and governor are not reaching(?)
- Demoralized - Tuesday, Jun 18, 19 @ 10:48 am:
I’m sure the likes of Glennon are just giddy about any prospect of cheating people out of their pensions.
- oh? - Tuesday, Jun 18, 19 @ 10:52 am:
How they wriggle over the prospect of a progressive income tax!
- Jocko - Tuesday, Jun 18, 19 @ 10:52 am:
==the city’s financial crisis warranted freezing the COLA adjustments to their retirement benefits, despite contractual rights to those benefits.==
While general and moral obligation bondholders receive their payments in full.
- Steve - Tuesday, Jun 18, 19 @ 10:53 am:
Everyone should listen to OW here: that progressive income tax has massive potential to solve many, many pension problems.
- Nonbeliever - Tuesday, Jun 18, 19 @ 10:54 am:
I can understand, perhaps the RI decision to those presently employed as they could have a new contract negotiated.
But to those already retired?? There ‘contract period’ is over and settled it would seem unless there is some pretty spacious ‘reasoning’ by the courts.
How about this RI decision? Did they include those already retired?
- Honeybear - Tuesday, Jun 18, 19 @ 10:57 am:
The Pension Onanism of IPI is so tiresome.
- Three Dimensional Checkers - Tuesday, Jun 18, 19 @ 10:57 am:
== so there’s untapped taxing room the legislature and governor are not reaching(?) ==
Yes, although they could have raised taxes before too. They could change the ramp. Forgive me if I am wrong, but we are close to the top of the ramp and making the payments, so I do not see how pension are causing some sort of emergency unless there is an emergency right now.
- Oswego Willy - Tuesday, Jun 18, 19 @ 10:59 am:
===that progressive income tax has massive potential to solve many, many pension problems.===
I don’t know all about that, but in context of the state reaching a revenue ceiling that could put pensions in a place like the Great Depression, the ceiling is much higher than those wishing for the end of pensions realize.
- Steve - Tuesday, Jun 18, 19 @ 11:00 am:
In the future, if the progressive income tax is passed: what’s more likely pensions being cut or Joe Six pack making 75K paying a state income tax of 7% to cover pensions? Everyone should know the answer by now.
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:01 am:
===Yes, although they could have raised taxes before too. They could change the ramp. Forgive me if I am wrong, but we are close to the top of the ramp and making the payments, so I do not see how pension are causing some sort of emergency unless there is an emergency right now.===
This.
This is the argument that those wanting the demise of pensions can’t grasp as their hurdle.
This argument can’t be rebuffed on the idea “well, we don’t like pensions”
- Perrid - Tuesday, Jun 18, 19 @ 11:01 am:
I’m not sure why a RI Supreme Court ruling on RI law changes a darn thing in IL. The State tried very hard to argue there was an emergency and they had to cut pensions due to it, and the ILSC laughed them out of the court. Even ignoring the pension clause, then you have the IL contract clause of the IL constitution, even before the federal contract clause. It’s a pipe dream and a distraction.
- Skeptic - Tuesday, Jun 18, 19 @ 11:01 am:
Quinn tried the “Things are so-bad we have to declare Police Powers” angle and was shot down in flames (”Yeah, it’s a problem, but a problem of your own making. Now pay up.” — Paraphrase from the ISC) Cranston at least had some factors beyond its control to factor in.
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:03 am:
===In the future, if the progressive income tax is passed: what’s more likely pensions being cut or Joe Six pack making 75K paying a state income tax of 7% to cover pensions? Everyone should know the answer by now.===
Probably the same risk since income tax became a thing…
LOL
You think any governor in the next 3 years will be in favor of raising income taxes?
You think 60 and 30 or 71 and 36 exists for this 7%?
Hmm.
- Rich Miller - Tuesday, Jun 18, 19 @ 11:04 am:
===or Joe Six pack making 75K paying a state income tax of 7% to cover pensions?===
If the graduated tax fails at the ballot, bank on it.
- Grandson of Man - Tuesday, Jun 18, 19 @ 11:05 am:
“Democrats in control of the General Assembly have shown little appetite for changing that protection, even though the state has more than $137 billion in unfunded pension liability”
They have shown an appetite to deal with pension debt in a humane way, by voting for the rich to pay a higher state income tax. Changing “that protection” won’t do anything about pension debt. We should work on paying it.
The ol’ tax cuts will bring more revenue snake oil is failing again. Trump’s tax cuts did not spur economic growth and more revenue. They added to federal deficits. Just after the state income tax fell in 2015 in Illinois, job growth was at its weakest. Oklahoma, Kansas and Louisiana cut taxes and it fiscally backfired.
- Steve - Tuesday, Jun 18, 19 @ 11:05 am:
OW
A lot better odds than changing the constitution to cut pensions.
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:06 am:
===If the graduated tax fails at the ballot, bank on it.===
Here lies in the selling of the graduated income tax…
- RNUG - Tuesday, Jun 18, 19 @ 11:07 am:
Illinios already tried the “police powers” / financial distress arguments in the SB-1 appeal. The IL SC didn’t buy it then.
- Pundent - Tuesday, Jun 18, 19 @ 11:07 am:
=Everyone should listen to OW here: that progressive income tax has massive potential to solve many, many pension problems.=
Not only that, but Jim Durkin claims we don’t even need a tax increase at this point. So it’s hard to see how the Cranston situation would have any relevance here.
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:08 am:
===A lot better odds than changing the constitution to cut pensions.===
A bet… that is “off the board”… has the worst odds… that’s like betting how I’ll fare in the starting lineup for the Cubs tonight against the Sox… it’s off the board… it ain’t happening.
- Not a Billionaire - Tuesday, Jun 18, 19 @ 11:13 am:
Joe Six pack makes 75 a year? Not downstate.
- Nonbeliever - Tuesday, Jun 18, 19 @ 11:16 am:
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:06 am:
===If the graduated tax fails at the ballot, bank on it.===
Here lies in the selling of the graduated income tax…
Or its “unselling.”
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:18 am:
===Or its “unselling.”===
Huh?
It could be…
* 97% will see no change
* If this fails, more revenue with a flat tax for all… is possible
So… what is your point?
- RNUG - Tuesday, Jun 18, 19 @ 11:19 am:
As far as Rhode Island goes, the only state parallel I can think of is Arkansas in the Depression. There they suspended bond payments for a number of years but eventually paid off the bonds.
One difference between RI and IL: RI allows municipal bankruptcy, IL does not without explicit permission of the General Assembly. So this is not quite the parallel the pension deniers would like you to believe it is.
- Whatever - Tuesday, Jun 18, 19 @ 11:20 am:
The Rhode Island Supreme Court also mentioned that the town said that, if it couldn’t welch on its contracts, it would have to file for bankruptcy. Bankruptcy allows the bankrupt person (including cities, as the courts held in the Detroit bankruptcy) to default on their contractual obligations. Illinois cannot declare bankruptcy, so there is no underlying notion that the retirees are going to have to take a hit anyway.
- AndyIllini - Tuesday, Jun 18, 19 @ 11:39 am:
OW - I’m not sure I follow your points (not criticizing or disagreeing, just clarifying)
You say “especially if the graduated income tax passes and it becomes law, as 97% will see no change in their income tax rate… so there’s untapped taxing room the legislature and governor are not reaching(?)”
That seems to imply that there is untapped room to raise taxes on 97% of the population is need be.
Then you say there is no chance of the individual income tax rate going to 7%? So are you saying it could go up, but not to 7%?
I agree that there is no appetite to raise it now, but as you look at the funding requirements 15 or 20 years from now, isn’t it possible that 7% for everyone (with high earners being appreciably higher) is possible, if we have all this “untapped room”?
- AnonymousOne - Tuesday, Jun 18, 19 @ 11:46 am:
The attempt to welsh on debt is never ending.
- DIstant watcher - Tuesday, Jun 18, 19 @ 11:48 am:
This is fun but merely for sport. Our own Supreme Court gives us less wiggle room and Rhode Island’s is hardly the last word on the meaning of the U.S. Constitution. Glennon’s false hope is the bane of the Right; they’ll need more practical answers before long.
- Annonin' - Tuesday, Jun 18, 19 @ 11:49 am:
Show of hands
Who believes Glennon understands it is the contracts clause in the federal constitution that prevents Illinois pensioners from gettin’ whacked (Art 1, Sect 10)we know GovJunk and the IPI clown car never got.
- DougChicago - Tuesday, Jun 18, 19 @ 11:50 am:
It’s all bunk. The Illinois Constitution says the pension protection is a matter of contract. Illinois can’t wiggle off the hook no matter how many things it changes.
- Mark Glennon - Tuesday, Jun 18, 19 @ 11:50 am:
Only one thing said in the comments here is true, which is that there’s no political chance for an amendment. That’s because you public union folks are running the state. It will only change upon “the state’s inevitable financial collapse,” to use the Wall Street Journal’s recent phrase. Pritzker, Durkin and the others lying about our situation may delay that a bit, but the insolvency is only deepening.
- Rich Miller - Tuesday, Jun 18, 19 @ 11:53 am:
===It will only change upon “the state’s inevitable financial collapse,”===
Please describe how that will inevitably happen.
- Lester Holt’s Mustache - Tuesday, Jun 18, 19 @ 11:54 am:
==that the city could freeze a cost of living adjustment for its police and firefighter retirees and not break the U.S. Constitution’s Contract Clause protection.==
I have doubts that a simple COLA freeze would be enough for Glennon and other IPI types. Most of what comes from the IPI and their supporters advocates reneging on prior agreements and completely eliminating any pension payments to any public employee. Even this type of proposal might be met with cries of “not good enough”
- Oswego Willy - Tuesday, Jun 18, 19 @ 11:54 am:
===That’s because you public union folks are running the state.===
So you can’t get 71 and 36 is what you’re saying.
Got it. Thanks.
- Ole' Nelson - Tuesday, Jun 18, 19 @ 11:57 am:
“Glennon’s false hope is the bane of the Right”
Can’t we just let Mr. Glennon enjoy this news for a day or two? After all, he has dedicated his life to normalizing the idea of amorally welching on pension promises as an easy way out of Illinois’ financial challenges./s
- AnonymousOne - Tuesday, Jun 18, 19 @ 12:03 pm:
So, pension reform occurred. It’s called Teir 2.
Fast forward to now…….Tier 2 doesn’t count as anything apparently. Theyre calling for going a step further to stop cost of living increases.
If that could ever occur, that would not be good enough. Now there would need to be actual benefit cuts.
Should that ever happen, next step would be elimination.
Ridiculous. Just have public employees work for free out of the love of their service to the people.
That actually sounds like what some believe.
- Rich Miller - Tuesday, Jun 18, 19 @ 12:03 pm:
===but as you look at the funding requirements 15 or 20 years from now===
Oh, for crying out loud. Now he’s supposed to guarantee no increases after a generation?
Go soak your head.
- Grandson of Man - Tuesday, Jun 18, 19 @ 12:04 pm:
“you public union folks are running the state”
Like when Quinn and Democrats enacted Tier 1 and Tier 2 pension reform, only to have Tier 1 reform struck down. Stay delusional.
- Pundent - Tuesday, Jun 18, 19 @ 12:08 pm:
=Who believes Glennon understands it is the contracts clause in the federal constitution that prevents Illinois pensioners from gettin’ whacked (Art 1, Sect 10)we know GovJunk and the IPI clown car never got.=
They all get it. They’re simply pandering to a group that doesn’t and thinks there are easy answers to all of our problems. Once you convince them you’re on “their side” it becomes a lot easier to fleece them.
- Anyone Remember - Tuesday, Jun 18, 19 @ 12:11 pm:
Honeybear -
Thanks, I spewed my caffeine all over the monitor, and then thought of this …
http://www.todayifoundout.com/index.php/2015/04/thoughts-science-onanism/
- Da Big Bad Wolf - Tuesday, Jun 18, 19 @ 12:13 pm:
==So you can’t get 71 and 36 is what you’re saying.==
Lol. The samurai strikes again.
- Mark Glennon - Tuesday, Jun 18, 19 @ 12:15 pm:
===It will only change upon “the state’s inevitable financial collapse,”===
Rich, if by “how” you mean when and what it will look like, that’s debatable but my guess it’s a continuing slow motion train wreck and not one big bang. If you mean “why,” it’s because the numbers are far beyond insurmountable without real pension reform, as we’ve documented inside and out, and as the General Assembly stated in its express findings on the SB1 reform bill that was thrown out. And it’s far worse now than then, especially for many municipalities.
- Anyone Remember - Tuesday, Jun 18, 19 @ 12:16 pm:
AnonymousOne
“Ridiculous. Just have public employees work for free out of the love of their service to the people.
That actually sounds like what some believe.”
In his pre-IPI / INN / Center Square days Greg Bishop actually said public employees should be willing to work for less than they were worth because of the “other” satisfaction they got from the job. Eventually I expect IPI to say teachers must be single & childless and have the schools provide barracks to reduce teacher pay and pensions.
- Ole' Nelson - Tuesday, Jun 18, 19 @ 12:17 pm:
I am curious as to the source of Mark Glennon’s passion regarding the prospect of welching on pension promises. I understand why State workers that chose a career that promised a solid retirement would be passionate about protecting that promise, but can’t figure out why someone would be as passionate as Mark is to cheat those state workers out of their pension. Who pays Mr. Glennon to write all those anti-worker articles? Maybe that is the source of his passion?
I can appreciate his concern for the Illinois pension numbers, they are very troubling. Just curious about his focus on pinning all the costs on state workers.
- Grandson of Man - Tuesday, Jun 18, 19 @ 12:19 pm:
We’ll never see Republicans trot out the wealthy for tax hikes the way the Democrats cut pensions. It was like their supporters were expendable. That “neoliberalism” appears to be over for now. We’re finally trying to get more revenue from those who should have been paying more a long time ago.
- Not a Billionaire - Tuesday, Jun 18, 19 @ 12:20 pm:
Zero hedge posts a lot of his stuff.
- Michelle Flaherty - Tuesday, Jun 18, 19 @ 12:20 pm:
the last time someone thought a Rhode Island example was good for Illinois it was SB 1, which ended costing the state money to defend and ultimately lose.
I would urge the same caution.
Exactly how many times to people want to lose on this issue.
Rhode Island is not Illinois. Two very different constitutions.
And the Illinois Supreme Court has made it pretty clear how they interpret the situation.
- Demoralized - Tuesday, Jun 18, 19 @ 12:24 pm:
==That’s because you public union folks are running the state==
Another victim heard from.
Mr. Glennon, you will not be happy until you cheat public employees out of their earned retirement benefits. And that says a lot about your character, or lack thereof.
- Demoralized - Tuesday, Jun 18, 19 @ 12:26 pm:
==Only one thing said in the comments here is true==
That’s one more true thing than you’ve ever said.
- Rich Miller - Tuesday, Jun 18, 19 @ 12:31 pm:
===it’s because the numbers are far beyond insurmountable without real pension reform===
Show me. The ramp is difficult but not unmanageable up until the last few years before 2045, particularly if taxes are raised another $3+ billion in 2021. And those last few years can easily be taken care of with a smoothing.
- Oswego Willy - Tuesday, Jun 18, 19 @ 12:34 pm:
- Da Big Bad Wolf -
Thanks.
I think my favorite argument is “I don’t have the votes, and I’m right, so it can’t be my argument” defense.
It has to be “them”
- NoGifts - Tuesday, Jun 18, 19 @ 12:37 pm:
Hard to cut police and firefighter pensions. Also hard to cut teacher pensions because illinois is one of the states where they don’t participate in social security. https://www.fool.com/retirement/2018/10/07/why-does-social-security-leave-out-teachers-in-the.aspx
- Demoralized - Tuesday, Jun 18, 19 @ 12:44 pm:
==real pension reform==
Exactly what does that look like in your eyes?
- Demoralized - Tuesday, Jun 18, 19 @ 12:45 pm:
==I think my favorite argument is “I don’t have the votes, and I’m right,==
That was pretty much the theme of the Rauner years wasn’t it?
- Tawk - Tuesday, Jun 18, 19 @ 12:46 pm:
More legal evidence that COLAs ain’t necessarily a promise.
The binary between steep cuts and massive tax increases to solve this problem makes compromise very difficult.
Two points some folks have trouble grasping: 1) This is a problem and Tier 2 didn’t solve it. 2) The tax increases would need to be very large in absence of some give from the unions.
JP Morgan says the revenue-side-only solution would require a 25% increase in state revenue. So that’s about a 50% hike in the income tax. (https://www.jpmorgan.com/jpmpdf/1320746272624.pdf)
You can try to spread some of that to the Pritzkers and Rauners with a progressive income tax amendment – but you would be quickly approaching or exceeding the highest income tax burden in the nation with that kind of hike. And don’t forget that at this point, around half of state revenue would not even be flowing to core services.
So what is more doable politically: Making IL income tax burden highest or near-highest in the nation w/ just 50% or so of all revenues going to services? Or an amendment that allows changes to COLAs like NJ and AZ along with some new revenue? I don’t know. But seems like a real compromise with all stakeholders has to involve the 3% automatic increases. Most people who don’t work in gov’t and many who do seem to recognize that is too generous.
- Jocko - Tuesday, Jun 18, 19 @ 12:47 pm:
==That’s because you public union folks are running the state==
You didn’t seem to mind when they were teaching your kids, monitoring air and water quality, and keeping you safe.
That’s like saying ‘dine and dash’ is a reasonable response to high food prices.
- Oswego Willy - Tuesday, Jun 18, 19 @ 12:47 pm:
===That was pretty much the theme of the Rauner years wasn’t it?===
Yep. Which is why I asked repeatedly to put “60 on the stairs” for the turnaround agenda items.
Narrator: They never put 60 on the stairs
- Demoralized - Tuesday, Jun 18, 19 @ 12:48 pm:
==in absence of some give from the unions==
It’s not the union’s to give. It’s an individual contract.
==too generous==
That’s in the eye of the beholder. And it’s usually a beholder who thinks that “I don’t get it so neither should you.”
- SSL - Tuesday, Jun 18, 19 @ 12:53 pm:
There’s no way pensions come under review. With Tier 2 now in place, all the state has to do is wait until the majority of Tier 1 pensioners die and problem solved. Given the insatiable appetite for can kicking, does anyone expect Illinois politicians to take on this issue?
Taxing retirement income will happen before pensions get looked at, and I don’t expect retirement income to get looked at either. I think people bring this up in an effort to raise the blood pressure of Tier 1 pensioners.
- Illdoc - Tuesday, Jun 18, 19 @ 1:00 pm:
Please remember, it is not a COLA it is an AAI which as a SURS member I know I pay for out of every paycheck for my future pension
- Not a Billionaire - Tuesday, Jun 18, 19 @ 1:01 pm:
I don’t let them raise my blood pressure. As a member of a younger tier one household I want to point out there are some promising aging drugs on the was. April 27 New Scientist.
- Tawk - Tuesday, Jun 18, 19 @ 1:02 pm:
==It’s not the union’s to give. It’s an individual contract.==
Having unions on board politically is key. CBA not really a part of it, though maybe some changes unions want in contracts could be part of a pension compromise.
==That’s in the eye of the beholder.==
Of course … this is politics. It’s all in the eye of the beholder. What’s your point?
- Timmy - Tuesday, Jun 18, 19 @ 1:04 pm:
Rich, while I agree the ramp is ” doable” and when debt services tapers off in a out 8 years there will be more $ to use, my concern is the local and county pension problems. They dont have some of the same options the state does. This alone causes problems for all. Ideas? Mr glennon? Willie?
- Pundent - Tuesday, Jun 18, 19 @ 1:14 pm:
=JP Morgan says the revenue-side-only solution would require a 25% increase in state revenue. So that’s about a 50% hike in the income tax.=
Tell it to the minority leader in the house. He’s saying we don’t need an income tax hike at all. I haven’t heard him mention changing COLA at all.
And BTW pensions are an individual right, there’s no “give” by the unions that changes this.
- Oswego Willy - Tuesday, Jun 18, 19 @ 1:18 pm:
- Timmy -
Pay what is owed, don’t miss payments, and i defer as always to - RNUG -
:)
- City Zen - Tuesday, Jun 18, 19 @ 1:26 pm:
==when debt services tapers off in about 8 years==
Review any CAFR from 5/10/20 years ago and compare with today. You’ll see debt service rarely tapers off and is merely replaced by more debt service.
- Timmy - Tuesday, Jun 18, 19 @ 1:29 pm:
For those who say the unions need to play, that’s fine but they cant make any deals with non union folk and union folk who are retired. So any cola adjustment by a union would apply to current union workers…
- RNUG - Tuesday, Jun 18, 19 @ 1:33 pm:
== actually said public employees should be willing to work for less than they were worth because of the “other” satisfaction they got from the job. ==
Speaking personally, I did work for 50% - 100% less than I could have gotten in the private sector if I relocated to the west coast in exchange for the promised pension.
- Morty - Tuesday, Jun 18, 19 @ 1:39 pm:
-Even this type of proposal might be met with cries of “not good enough”
That’s exactly what Tillman did say…
Until the SC killed it.
Now it is.
Go figure
- RNUG - Tuesday, Jun 18, 19 @ 1:40 pm:
== the 3% automatic increases … is too generous ==
So a AAI that is the same as the historical CPI-U is considered too generous?
Offer a uncapped COLA and see if people will switch to it.
That will never happen because the intent is to rip off public employees … that is clear because every proposal to switch to a true COLA is 1/2 or less of CPI-U and it is capped at the current 3%. If we were to return to the runaway inflation days of the late 70’s and 80’s, CPI could run 12% - 15% while the retirees got 3%.
- Morty - Tuesday, Jun 18, 19 @ 1:42 pm:
“the state’s inevitable financial collapse,”
Mr. Nostradomus has been right sooooo many times in the past
- RNUG - Tuesday, Jun 18, 19 @ 1:53 pm:
== they cant make any deals with non union folk and union folk who are retired. So any cola adjustment by a union would apply to current union workers… ==
Nope. When it comes to retirement, legally the union doesn’t represent anyone … not even the union members.
- City Zen - Tuesday, Jun 18, 19 @ 1:53 pm:
==Offer a uncapped COLA and see if people will switch to it.==
I’m not aware of any state that offers uncapped COLAs on their pensions.
- RNUG - Tuesday, Jun 18, 19 @ 1:57 pm:
Since Mark Glennon seems to be so fond of breaking contracts, maybe his bank should arbitrarily change the terms of his checking, savings, and mortgage accounts so he has to pay more because the bank needs to increase their profits.
- SSL - Tuesday, Jun 18, 19 @ 2:01 pm:
Not a Billionaire, I hope you are right. Unfortunately, it isn’t just aging that kills you, it’s also the diseases. As Charles Barkley likes to say, Father Time is undefeated. I’ve seen too many friends and family lose the battle to doubt it. Good luck to you.
- RNUG - Tuesday, Jun 18, 19 @ 2:11 pm:
== Unfortunately, it isn’t just aging that kills you, it’s also the diseases ==
The trick is live to 70. A lot of the diseases show up in your 60’s. Once you make 70, you’re likely to live to 90 plus.
- City Zen - Tuesday, Jun 18, 19 @ 2:14 pm:
==maybe his bank should arbitrarily change the terms of his checking, savings, and mortgage accounts so he has to pay more because the bank needs to increase their profits.==
You just described JB’s tax plan.
- Ole' Nelson - Tuesday, Jun 18, 19 @ 2:16 pm:
Mark Glennon seems to be so fond of breaking contracts
But why is Mark this way? Is he being paid handsomely to attempt to normalize this amoral act with the public?
He doesn’t seem to be advocating for the State to renege on its bond obligations. Why not? Maybe that type of theft doesn’t pay as well?
- SSL - Tuesday, Jun 18, 19 @ 2:27 pm:
RNUG, all the financial advisors say the same thing, but there are no rules. If you qualify for social security, take it at 62 and enjoy it while you can. Seen way too many never collect or only get a year or two. Just my opinion.
- thoughts matter - Tuesday, Jun 18, 19 @ 2:33 pm:
==It will only change upon “the state’s inevitable financial collapse,” to use the Wall Street Journal’s recent phrase==
Given that we have not anywhere near hit an unreasonable tax rate so taxes could be increased, and that tier 1 pensions will fall by the wayside rapidly beginning in about 30 years, there is no valid reason to think pensions will cause the state to collapse.
==Eventually I expect IPI to say teachers must be single & childless and have the schools provide barracks to reduce teacher pay and pensions. ==
I think they want to go back to the days when the teacher received room and board in a students’ household, shifting households every so many weeks thru the school year.
- Seats - Tuesday, Jun 18, 19 @ 2:54 pm:
RNUG- In response to your comment you just need to make it through your 60s, cancer diagnosis is very high in the 70s also
- Shark Sandwich - Tuesday, Jun 18, 19 @ 2:54 pm:
“The Pension Onanism of IPI is so tiresome.”
They do like to fruitlessly spill their screed, don’t they?
- Former State Worker - Tuesday, Jun 18, 19 @ 2:56 pm:
=what’s more likely pensions being cut or Joe Six pack making 75K paying a state income tax of 7% to cover pensions? Everyone should know the answer by now.=
I think the “Joe Six Pack” making 75K is rather far reaching part of this. If that was the median salary for workers in Illinois then things really wouldn’t be so bad here.
There’s no Constitutional amendment needed to raise the flat tax on everyone. I don’t know why opponents to the “fair tax” don’t realize that?
- Generic Drone - Tuesday, Jun 18, 19 @ 3:00 pm:
If it’s under 60% unfunded? Did they just tell them to underfund the pensions to make it collapse in order to get out of obgligation?
- Enviro - Tuesday, Jun 18, 19 @ 3:06 pm:
= In the future, if the progressive income tax is passed: what’s more likely pensions being cut or Joe Six pack making 75K paying a state income tax of 7% to cover pensions? =
My guess is none of the above.
It is more likely that those making over $1 million will be paying more in state income taxes, not those making $75,000.
- City Zen - Tuesday, Jun 18, 19 @ 3:14 pm:
=what’s more likely pensions being cut or Joe Six pack making 75K paying a state income tax of 7% to cover pensions?==
C. Pensions being taxed.
- RNUG - Tuesday, Jun 18, 19 @ 3:24 pm:
== RNUG- In response to your comment you just need to make it through your 60s, cancer diagnosis is very high in the 70s also ==
Yes, but if you look at the life expectancy tables, your most dangerous decade when you are older is your 60’s. Once you hit 70, you have around an 80% chance of living to 90.
- RNUG - Tuesday, Jun 18, 19 @ 3:27 pm:
== RNUG, all the financial advisors say the same thing, but there are no rules. If you qualify for social security, take it at 62 and enjoy it while you can. ==
FWIW … I took the 2002 ERI at age 50, and SS at 62. And while we do help the kids, Mrs RNUG and I have been traveling and spending since about 2004
- Enviro - Tuesday, Jun 18, 19 @ 3:28 pm:
Only 12 states do not tax retirement income.
Illinois is one of those 12 states.
It is possible that pensions and IRA or 401 required minimum distributions could be taxed.
- Honeybear - Tuesday, Jun 18, 19 @ 3:50 pm:
-You just described JB’s tax plan.-
Yes, lol, for the wealthy and privileged 3% that would be true.
But not for 97% of Illinoisans
- Morty - Tuesday, Jun 18, 19 @ 3:54 pm:
“The Pension Onanism of IPI is so tiresome.”
They do like to fruitlessly spill their screed, don’t they?
Well-played, Sirs
- Say no to big government - Tuesday, Jun 18, 19 @ 3:54 pm:
I see no ray of hope in that decision with regards to state pension cuts. I don’t think the State is in such a dire fiscal position as Cranston. And given the attitude of the current governor and other Democrat leaders in the GA, it appears there is still a lot more to tax in Illinois. So, not sure how the same argument could be made with regards to any cuts to state pensions.
- City Zen - Tuesday, Jun 18, 19 @ 3:55 pm:
Honeybear - Glad to see the state arbitrarily changing the terms to increase their profits did not get past you either.
- Morty - Tuesday, Jun 18, 19 @ 3:57 pm:
“But why is Mark this way? Is he being paid handsomely to attempt to normalize this amoral act with the public?”
Lol, Mark and Ted INSIST they are independent of IPI and their ilk.
Even though Ted just transfered over from IPI.
That kind of mendacity is actually somewhat inspiring
- Ole' Nelson - Tuesday, Jun 18, 19 @ 4:16 pm:
The unions are putting great effort into the fight to protect pension benefits. I know who is funding the unions,it is thousands of current and former hard-working State employees.
Mark Glennon is putting a great deal of effort into convincing the public that stealing pensions is okay. What I want to know is who is buttering his bread?
- Da Big Bad Wolf - Tuesday, Jun 18, 19 @ 4:51 pm:
I think the “Joe Six Pack” making 75K is rather far reaching part of this. If that was the median salary for workers in Illinois then things really wouldn’t be so bad here.
According to Reboot Illinois a couple years ago the average wage for full time workers in Illinois is $57,072.
- City Zen - Tuesday, Jun 18, 19 @ 5:02 pm:
==average wage for full time workers in Illinois is $57,072==
Unfortunately, many households have two full time workers. Even more unfortunately, no married tax brackets.
- Oswego Willy - Tuesday, Jun 18, 19 @ 5:07 pm:
===Even more unfortunately, no married tax brackets.===
You are so tiring.
For the 8,562nd time…
97% will see no increase in their income tax, only those making $250K will see in increase… above the $250K.
You know all that, and yet…
- RIJ - Tuesday, Jun 18, 19 @ 5:22 pm:
According to the US Census Bureau, in 2017 the median income in Illinois was $62,900. The US median was $60,300.
- Da Big Bad Wolf - Tuesday, Jun 18, 19 @ 5:23 pm:
$57,072 x 2 = 114,144. $113,894 more will get this family to $250,000
- RNUG - Tuesday, Jun 18, 19 @ 5:24 pm:
Couple of IDoR statistics to chew on. From 2016 final annual report (latest full report available). Out of state returns excluded. Rounded to nearest dollar.
The net income per IL return was $61,186
The federal AGI income per return was $74,403.
Note that these are per return, not per earner. Since not everyone is married, the odds are you could cut those numbers by at least 1/3 (up to close to half) to get to average per earner. If you reduce the net by s third, then the average per earner is just shy of $41,000.
- Da Big Bad Wolf - Tuesday, Jun 18, 19 @ 5:25 pm:
==According to the US Census Bureau, in 2017 the median income in Illinois was $62,900. The US median was $60,300.==
That’s good news. Especially since the median is usually less than the average.
- RNUG - Tuesday, Jun 18, 19 @ 5:32 pm:
==According to the US Census Bureau, in 2017 the median income in Illinois was $62,900. The US median was $60,300.==
Based on the numbers I just pulled out of IDoR, I suspect that is family income, not individual earner.
- Whatever - Tuesday, Jun 18, 19 @ 5:52 pm:
==More legal evidence that COLAs ain’t necessarily a promise.==
Nonsense. The whole issue in the case was whether the town could breach its contractual obligation to provide COLA’s under the financial hardship exception to the contracts clause. If the COLAs were not guaranteed by contract, there would not have been any case.
- Tired of it - Tuesday, Jun 18, 19 @ 6:30 pm:
I am sure many folks will end up with less in there pockets each month with the increased gas tax and vehicle registration fees, net loss. Those increases don’t discriminate, even for lower earners.
- Da Big Bad Wolf - Tuesday, Jun 18, 19 @ 6:49 pm:
===He (Glennon)doesn’t seem to be advocating for the State to renege on its bond obligations. Why not? Maybe that type of theft doesn’t pay as well?===
Interesting observation. Wouldn’t the bond holders be the first on the chopping block?
- Not a Billionaire - Tuesday, Jun 18, 19 @ 7:12 pm:
To ASK there is a class of drugs called semiotics in clinical trials they are safe but have been mixed on arthritis. I am surprised they would try. That usually is permanent damage.
- Not a Billionaire - Tuesday, Jun 18, 19 @ 7:15 pm:
Ssl at 201 . RNUGs facts as usual are solid. The next barrier is the nineties. One of the healthiest people I know have been hit my mother aunt’s and on and on. It’s just that the damage build a up no amount of good health can save you . Same with pets in their teens.
- Old Illini - Tuesday, Jun 18, 19 @ 7:37 pm:
==Please remember, it is not a COLA it is an AAI which as a SURS member I know I pay for out of every paycheck for my future pension==
Why don’t we just agree to stop talking about COLAs wrt Illinois pensions. Talking about COLAs just confuses the issue, because we don’t have COLAs here.
- RNUG - Tuesday, Jun 18, 19 @ 7:40 pm:
== Interesting observation. Wouldn’t the bond holders be the first on the chopping block? ==
They were in Arkansas during the Great Depression. That is the only real precedent we have for States in a bankruptcy type situation.
- Not a Billionaire - Tuesday, Jun 18, 19 @ 7:43 pm:
Right it’s the AAI. While increasing healthspan might increase pension it will save on healthcare.
Increasing life and health also seems to cut population growth. The U.N. Put its estimates out. Let’s say we should plan for a smaller Illinois. I saw two rural schools in western part of state with graduating classes of 40 and Galesburg is down to 250.
- RNUG - Tuesday, Jun 18, 19 @ 7:53 pm:
== While increasing healthspan might increase pension it will save on healthcare. ==
Yep. My mom made it to 89. Active and still driving until the last couple of months. My mother-in-law made it to almost 97. Active until the last 2 months also, although she quit driving a few years ago and had a pacemaker the last year.
- City Zen - Tuesday, Jun 18, 19 @ 8:28 pm:
==You know all that, and yet…==
…no married tax brackets.
Say it aloud. You’ll simultaneously feel better while passing along a fun fact to the voters. No harm, as you said, right?
- City Zen - Tuesday, Jun 18, 19 @ 8:31 pm:
==it is not a COLA it is an AAI which as a SURS member I know I pay for out of every paycheck for my future pension==
Absolutely. You are entitled to 1.5% simple interest AAI, the original agreement for 0.5% of your salary.
- Oswego Willy - Tuesday, Jun 18, 19 @ 8:47 pm:
===You’ll simultaneously feel better while passing along a fun fact to the voters. No harm, as you said, right?===
If you think that 97% not seeing a tax increase is “less”… LOL
When you continually comment with your ignorance, your troll factor continues to rise.
The couple you’re so worried about in your example will NOT see a tax increase.
Your straw man also has no clothes.
First it was pensions, then the anti-union, now its ignorance of 97% not getting a tax increase… with an example of a couple… NOT getting a tax increase.
I fed ya. Feel better?
- Not a Billionaire - Tuesday, Jun 18, 19 @ 8:48 pm:
Yep RNUG same here they were fine and then went fast similar ages
We are entitled to AAI period.
- RNUG - Tuesday, Jun 18, 19 @ 9:13 pm:
== Absolutely. You are entitled to 1.5% simple interest AAI, the original agreement for 0.5% of your salary. ==
Except the GA granted the 3% compounded and the IL SC has said both the initial terms at hiring plus enhancements granted bybtye GA are covered by the pension clause
- Illdoc - Tuesday, Jun 18, 19 @ 9:26 pm:
No, when I joined SURS it had been changed to the current 3 percent. This of course can be changed by mutual agreement between the State and the individual
- City Zen - Tuesday, Jun 18, 19 @ 10:00 pm:
OW - Searched your comment for “no married tax brackets” and came up empty. Don’t be afraid to say it. No tax increase, right?
Except there is a tax increase…the following year. No inflation indexing, remember? Say that aloud too.
No married tax brackets and no inflation indexing. Just mention these two facts among your inner circle. Well, maybe not yours, per se, but someone. Because when the topic comes up in my circles, and I mention this tax oddity, they give a bewildered look and ask “why would they do that?” or shake their head in that “typical Illinois” way and chuckle. Doesn’t exactly inspire trust among those on the fence otherwise.
==Except the GA granted the 3% compounded and the IL SC has said…==
I know. It’s just fun to point out to the “I paid for this” crowd.
- Oswego Willy - Tuesday, Jun 18, 19 @ 10:10 pm:
===Except there is a tax increase…the following year. No inflation indexing, remember? Say that aloud too.===
… which is why… the ballot initiative, the change to the constitution, is there… and 97% will see no tax increase.
===No married tax brackets and no inflation indexing. Just mention these two facts among your inner circle.===
Again, unless you make $250K, you won’t see a tax increase, and that increase is only above the $250K
You’re tiring, and you neglect facts, while building three more straw men… as the progressive income tax would take effect changing everything, but… you again won’t recognize facts.
===Well, maybe not yours, per se, but someone.===
… yeah, 3% will see an increase. That’s the ball game.
===Because when the topic comes up in my circles, and I mention this tax oddity, they give a bewildered look and ask “why would they do that?”===
Need others “some say”, “people say”, “my circle believes”
Yeah, they won’t see an increase unless they make more than $250K… must forget to tel them that, LOL
===or shake their head in that “typical Illinois” way and chuckle.===
Raising taxes on the top 3%…
Huh. We had/have a flat tax. This is a new thing.
I know, you can’t grasp facts.
===Doesn’t exactly inspire trust among those on the fence otherwise.===
The only people that are effected are those making $250K.
Anyone else… bewildered, confused, or too Kassian to understand that logic… they probably can’t be helped.
“My taxes aren’t going up… but I’m mad for the top 3%”
That’s bewildering