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Wishful thinking

Thursday, Aug 29, 2019 - Posted by Rich Miller

* Sun-Times

Michael Cornicelli, executive vice president of the Building Owners and Managers Association of Chicago, said he assumes any such tax [on high-end city properties at their sale] will cover commercial buildings and not just homes. “It’s a tax on business and employment in the city” that, coupled with a slowing economy and spikes in property tax assessments, “has alarm bells going off everywhere.”

Lightfoot will need to bargain to get anything through the legislature, Cornicelli said.

“My gut is that in order to get something like that, she’ll have to give something,” he said. His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions.

If she is bargaining with people like Cornicelli, then yes. But she has to get that through the Illinois General Assembly. And the odds of Democrats and the governor approving that tax hike in exchange for cutting pension benefits are not exactly high.

       

47 Comments
  1. - Oswego Willy - Thursday, Aug 29, 19 @ 11:26 am:

    ===My gut is that in order to get something like that, she’ll have to give something,” he said. His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions.“===

    My gut says there isn’t 71 and 36 for that referendum to make a ballot


  2. - Juvenal - Thursday, Aug 29, 19 @ 11:30 am:

    Aonther “Grand Bargain,” that’s some real outside the box thinking.

    The odds of coupling a pension rollback to a tax hike were zero when Rauner was governor.

    They are less than zero now.

    If this is what Lightfoot was hinting at before the IBEW, she needs to rewrite her speech.


  3. - Sue - Thursday, Aug 29, 19 @ 11:31 am:

    Everyone cries out for a pension amendment-unfortunately any amendment would not allow for retroactive cuts to existing liabilities. We’re stuck with the pension problem absent several supreme court justices changing their positions on vested benefits and impairment


  4. - Skeptic - Thursday, Aug 29, 19 @ 11:33 am:

    A referendum that may not make it onto the ballot until, what, 2024? And even if it passes helps how?


  5. - Montrose - Thursday, Aug 29, 19 @ 11:35 am:

    Nothing says “Pensions are a promise” like a constitutional amendment so you can lower employee pensions.


  6. - Bertrum Cates - Thursday, Aug 29, 19 @ 11:39 am:

    = His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions =

    What else you got, Mike?


  7. - Steve - Thursday, Aug 29, 19 @ 11:46 am:

    My gut is taxes will be going higher in Chicago before public pensions are cut.


  8. - don the legend - Thursday, Aug 29, 19 @ 11:47 am:

    Legislator A. “So that I understand, I’m being asked to RAISE taxes on the sale of real estate and CUT pensions of my constituents. Can I have a minute to decide?”


  9. - DarkDante - Thursday, Aug 29, 19 @ 11:50 am:

    Bring this up again: I read in the Bright One that Lightfoot wants to extend the ramp. Could this be the structural change that she was referring to in front of the IBEW?

    My two cents on a con amendment limiting pensions: not a snowball’s chance in hell. That being said, she has flubbed the political football before, so maybe she was hinting at a possible pension cut amendment.


  10. - Montrose - Thursday, Aug 29, 19 @ 11:54 am:

    “Bring this up again: I read in the Bright One that Lightfoot wants to extend the ramp. Could this be the structural change that she was referring to in front of the IBEW?”

    It’s possible, but that’s not structural reform. That’s just reworking the payment plan.


  11. - Steve - Thursday, Aug 29, 19 @ 11:55 am:

    Michael Cornicelli’s fear: part of the value of those buildings in Chicago really is those Chicago pensions.


  12. - Matt P - Thursday, Aug 29, 19 @ 12:06 pm:

    Tax. Spend. Tax. Spend.

    When will we finally address the insane pension promises? Let the taxpayers vote.


  13. - Oswego Willy - Thursday, Aug 29, 19 @ 12:09 pm:

    ===Let the taxpayers vote===

    Go get the signatures.

    Keep in mind the last time a call for a constitutional convention was on the ballot, it was defeated.

    Get the signatures.

    But, get some better lawyers than the last group Rauner had to put “things” on the ballot…

    … then again, that was an exercise to get names and information on folks. The idea that it was a true effort is for those that Rauner wanted fooled.

    No one is stopping you. Get those signatures, because frankly, if you see 71 and 36 for any pension amendment to the constitution, please list those members.


  14. - Original Rambler - Thursday, Aug 29, 19 @ 12:10 pm:

    Don the Legend: well done.

    Matt P.: the taxpayers did vote, via their elected representatives, to make those “insane pension promises.” Trouble is their elected representatives did not vote to fund them at the same time. And as Sue aptly points out, the bill is coming due now.


  15. - Steve - Thursday, Aug 29, 19 @ 12:11 pm:

    - Matt P -

    There will not be any changes in the public pensions until property taxes are tapped out. As long as more revenue is coming from property taxes nothing will change.


  16. - Oswego Willy - Thursday, Aug 29, 19 @ 12:14 pm:

    ===There will not be any changes in the public pensions until property taxes are tapped out. As long as more revenue is coming from property taxes nothing will change.===

    No.

    The revenue streams including the state’s share has not maxed out, or is close to maxing out.

    That’s why the “B” word others love, or “default” is an impossibility as (no pun intended) constituted.

    - Steve -

    Will you vote for a constitutional amendment? lol


  17. - Pundent - Thursday, Aug 29, 19 @ 12:15 pm:

    =When will we finally address the insane pension promises?=

    Like social security? It’s also underfunded. I guess it’s only insane when it’s somebody else’s pension.


  18. - Monadnock Pigeon - Thursday, Aug 29, 19 @ 12:18 pm:

    What I hear is a delightful blend of wish fulfillment and one-trick pony, the byproduct of a life full of charming exchanges that go something like this:

    “For once, Mike, could we not argue about where to go for lunch?”

    “In order to get something like that, you’ll have to give something,” he said. His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions.

    “Do you mind if I turn on the ballgame?”

    “In order to get something like that, you’ll have to give something,” he said. His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions.

    “Dad, can I borrow the car?”

    “In order to get something like that, you’ll have to give something,” he said. His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions.


  19. - Steve - Thursday, Aug 29, 19 @ 12:20 pm:

    OW

    I think Nebraska ’s constitution probably has its’ advantages in this quagmire .

    https://www.mercatus.org/bridge/commentary/why-nebraska-ranked-most-fiscally-healthy-state

    https://www.mercatus.org/bridge/commentary/why-nebraska-ranked-most-fiscally-healthy-state


  20. - Oswego Willy - Thursday, Aug 29, 19 @ 12:22 pm:

    Does Nebraska have our same constitution when it comes to pensions?


  21. - Oswego Willy - Thursday, Aug 29, 19 @ 12:25 pm:

    From that link:

    ===A big contributing factor to Nebraska’s low long-term liabilities is its relationship with debt. Nebraska does not have any general obligation debt because of a constitutional provision that prohibits the state from incurring any debt in excess of one hundred thousand dollars. As a result, Nebraska has been able to keep debt at five percent of personal income or below since 2010.===

    Does Illinois have that provision?


  22. - Steve - Thursday, Aug 29, 19 @ 12:26 pm:

    OW

    I’m pretty sure they don’t. Each state is unique.


  23. - Oswego Willy - Thursday, Aug 29, 19 @ 12:27 pm:

    ===I’m pretty sure they don’t. Each state is unique.===

    So comparing that is you asking me to waste my time?

    Why bring in Nebraska?


  24. - Steve - Thursday, Aug 29, 19 @ 12:30 pm:

    OW

    Maybe Illinois wouldn’t have so many pension problems if they had more limits on issuing debt.


  25. - Oswego Willy - Thursday, Aug 29, 19 @ 12:34 pm:

    ===Maybe Illinois wouldn’t have so many pension problems if they had more limits on issuing debt.===

    Take that up with the constitution, pesky as it is.

    I dunno if comparing states like Nebraska to Illinois makes that much sense, since Nebraska as a whole is slightly larger… than 1/2 of Chicago in population, and doesn’t have the 3rd largest metropolitan area in America in its border.


  26. - Anyone Remember - Thursday, Aug 29, 19 @ 12:36 pm:

    The Illinois Constitution of 1870 had limits on the issuance of debt. Hence the proliferation of units of local government.


  27. - Michelle Flaherty - Thursday, Aug 29, 19 @ 12:38 pm:

    Other reasons for Nebraska’s fiscal stability.

    Nebraska has a progressive income tax.

    Nebraska legislature has no House.

    OK, can we get back to reality in Illinois?


  28. - Oswego Willy - Thursday, Aug 29, 19 @ 12:40 pm:

    (Defers and tips cap to - Michelle Flaherty -)


  29. - Langhorne - Thursday, Aug 29, 19 @ 12:41 pm:

    We had limits on the issuance of debt under previous constitutions. That led to very creative ways to get around it, Because sometimes debt is appropriate and necessary.


  30. - Steve - Thursday, Aug 29, 19 @ 12:42 pm:

    Yes , let’s get back to reality. Mayor Lightfoot has major financial challenges .

    https://www.city-journal.org/html/chicago%E2%80%99s-debt-dereliction-15497.html


  31. - Suburbanon - Thursday, Aug 29, 19 @ 12:42 pm:

    The irony in this debate is public and private pension funds are major investors in high rise office and multi family buildings in Chicago. Raising property taxes on these buildings will cut into pension investment returns, further exacerbating the pension shortfall, necessitating more taxes to cover shortfall. It can only get worse, not better.


  32. - Oswego Willy - Thursday, Aug 29, 19 @ 12:45 pm:

    ===Mayor Lightfoot has major financial challenges===

    … which she knew, or should’ve known about as she ran.

    The leaders and mayors find solutions, not come up with half-baked silliness and pass it off as a passive attempt to change other decision-makers’ minds.

    Lightfoot needs to do better in understanding process and the politics to that.


  33. - RNUG - Thursday, Aug 29, 19 @ 1:05 pm:

    == allowing a referendum on a state constitutional amendment to let governments reduce employee pensions. ==

    Good dividing us and them politics but a waste of time unless you are also amending the US Contracts Clause.


  34. - Steve - Thursday, Aug 29, 19 @ 1:06 pm:

    OW

    Change can’t happen without at least talking about changing something. What’s hearsay today could be conventional wisdom by the end of Mayor Lightfoot’s term. Maybe not what she wants but something else.


  35. - Oswego Willy - Thursday, Aug 29, 19 @ 1:09 pm:

    ===What’s hearsay today could be conventional wisdom by the end of Mayor Lightfoot’s term.===

    No…. no, it won’t.

    71 and 36… ignoring the contract clause in the US Constitution…

    - Steve -

    Please, this place isn’t a dorm room, throw out silly ideas, see what sounds Kool and Nifty… then play euchre the rest of the night.

    Seriously, think about things.


  36. - Jocko - Thursday, Aug 29, 19 @ 1:20 pm:

    ==Let the taxpayers vote==

    The next vote on a Con-Con is 11/7/28. That should provide plenty of time to rally people to your cause.


  37. - Steve - Thursday, Aug 29, 19 @ 1:27 pm:

    OW

    Chicago and Illinois finances would be in fiscal better shape if more decision makers thought about things. I give Rahm and Lori credit for at least thinking that the status quo might have to change just a little bit.


  38. - Oswego Willy - Thursday, Aug 29, 19 @ 1:31 pm:

    - Steve -

    The irony of your thoughts like this on a Post titled “Wishful Thinking”… too delicious.

    Solutions need to be not wishes, but realistically based, sound in policy, and possible in the politics.

    Lightfoot here has none of those.


  39. - Skeptic - Thursday, Aug 29, 19 @ 1:43 pm:

    “realistically based, sound in policy, and possible in the politics.” And legal.


  40. - Montrose - Thursday, Aug 29, 19 @ 1:45 pm:

    There are days I think there needs to be a standing post titled “People that want to argue with OW” so that we can just consolidate all of it in one spot.


  41. - Pundent - Thursday, Aug 29, 19 @ 1:45 pm:

    =Chicago and Illinois finances would be in fiscal better shape if more decision makers thought about things.=

    Dreaming is not thinking.


  42. - Suburban Mom - Thursday, Aug 29, 19 @ 2:01 pm:

    I wonder how Mr. Cornicelli would feel about his employer demanding back money he had already earned because now they wish they hadn’t paid it to him 10 years ago.


  43. - Skeptic - Thursday, Aug 29, 19 @ 2:02 pm:

    “a standing post titled “People that want to argue with OW” Certainly a Pension FAQ would be useful, although I doubt anyone would actually read it.


  44. - Jocko - Thursday, Aug 29, 19 @ 2:20 pm:

    ==in order to get something like that, she’ll have to give something==

    Never mind that you (and Illinois residents) GOT services at an artificially low rate for 30+ years.


  45. - Steve - Thursday, Aug 29, 19 @ 2:28 pm:

    For everyone. Illinois makes national mention on the subject of pensions.

    https://finance.yahoo.com/news/n-j-worse-shape-other-144104527.html

    Karel Citroen, head of municipal-bond research at Conning, a money-management firm, said he could foresee a situation in Illinois or New Jersey where “its pension fund essentially has no assets to cover its liabilities and benefits are paid from its annual budget.”


  46. - Oswego Willy - Thursday, Aug 29, 19 @ 2:32 pm:

    - Steve -

    We know what the problem is, “Wishful Thinking” is what we’re trying to avoid in thinking how to fix it.


  47. - RNUG - Thursday, Aug 29, 19 @ 2:45 pm:

    == Karel Citroen, head of municipal-bond research at Conning, a money-management firm, said he could foresee a situation in Illinois or New Jersey where “its pension fund essentially has no assets to cover its liabilities and benefits are paid from its annual budget.” ==

    Wonder if the pension planners have modeled this, and if it would be cheaper than the ramp in its’ later years?


Sorry, comments for this post are now closed.


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