Latest Post | Last 10 Posts | Archives
Previous Post: Illinois Needs Private Sector Jobs Now! Why Labor Leaders Support Senate Bill 1849
Next Post: Pols behaving badly
Posted in:
* The setup, from WUIS…
The Illinois Municipal League’s Legislative Director, Joe McCoy, says cities across Illinois are facing similar problems of growing unfunded liabilities. He says it’s a disturbing trend that’s grown in recent years, as stock values tumbled. McCoy says there’s not much municipalities can do about it. They don’t decide what retirement benefits should be offered to employees. The state does.
“The biggest structural problem we have with the system is that the state gets to dictate what the pension benefits are and they don’t have to put in a single dime toward funding the financial obligations that they’ve imposed on local taxpayers,” McCoy said. ”So they don’t have any real incentive to restrain themselves from enhancing benefits. Because they reap all the political benefits of increasing the pension levels, without having to pay the bill.”
* The Question: Should state government be prohibited from setting pension benefits for local government employees? Take the poll and then explain your answer in comments, please.
posted by Rich Miller
Wednesday, May 9, 12 @ 10:57 am
Sorry, comments are closed at this time.
Previous Post: Illinois Needs Private Sector Jobs Now! Why Labor Leaders Support Senate Bill 1849
Next Post: Pols behaving badly
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
It would seem that state government would be more likely to adhere to a given or set parameter for pension benefits for various local government employees. Plus, we have seen what a great job state government has been doing with suggesting and administering their own pension benefits.
Comment by Festus Hagen Wednesday, May 9, 12 @ 11:07 am
Yes. To the biggest extent possible, it’s important to directly link entities that are paying the tab to those receiving the benefits. People behave differently when they’re dealing with Other People’s Money. If the local units are responsible for paying the costs but the state government is calling the shots in terms of spending levels, it creates a disconnect.
Comment by John Galt Wednesday, May 9, 12 @ 11:08 am
Pension benefits should be negotiated by the party with the financial obligation. Just as the State should not be responsible for teacher pensions, negotiated by individual districts, neither should municipal governments be responsible for pensions set by the State.
Comment by Lars Wednesday, May 9, 12 @ 11:10 am
The State Of Illinois has legal authority over everything within its borders except such powers which have been ceded to the federal government under the constitution.
In other words; who would stop them?
Comment by Liberty First Wednesday, May 9, 12 @ 11:13 am
Setting the benefits determine the cost. So the entity that incurs the cost should set the benefits as a result of negotiations.
Comment by Hoping for Rational Thought Wednesday, May 9, 12 @ 11:16 am
Yes, it has been nothing more than a way to gain political favor with public union groups. Cities and local governemnts can not afford this mandates that come from people who do not have to write the check.
Comment by Ahoy! Wednesday, May 9, 12 @ 11:20 am
The concept should be simple, the parties paying the benefits should decide the level the contributions and what the benefits will be . . . .
Comment by Blue Grass Wednesday, May 9, 12 @ 11:20 am
Absolutely yes. The most local government with the obligation to pay should be responsible. The State has already established its incompetentcy
Comment by downstate hack Wednesday, May 9, 12 @ 11:25 am
When you consider the mismanagement and corruption within the state pension programs that are now somewhat exposed,how could you think they should have control of local systems? Certainly there should be oversight,but unless problems are indicated,let them be.
Comment by earl Wednesday, May 9, 12 @ 11:29 am
If the State actually followed their Unfunded Mandates law this would be a non issue. I negotiated several union contracts over the years on behalf of municiplalities and what the bargaining unit could not get at the bargaining table they went to Springfield and got it from the legislature even though the municipality was left paying the bill.
I don’t blame the unions as much as I blame the legislators. After all, when a bunch of guys in uniforms show up at their legislators’ office and ask them to support legislation, rare is the legislator who asks; “How is this going to be paid for?”. Other than the IML lobbyist, there were no groups of citizens who came to Springfield lobbying against such bills and when the bill came due at home in their own cities or villages, the citizens blamed their own councils or boards.
So yes, the Legislature should not have any control from setting benefits for local employees other than perhaps establishing funding levels for the pensions themselves. I know its an easy joke, but that actaully should be the limit of their authority.
Comment by Tommydanger Wednesday, May 9, 12 @ 11:30 am
No. The government of the state of IL is the governing body for the entire state. The municipalities are subsidiaries.
And mainly, I think there are communities that would be tempted to cheat their long-term employees and treat them shabbily pleading poverty when they simply don’t want to pay taxes.
The other thing is, can’t they avoid the whole pension liability by hiring contractors, like the city of Chicago does for some things?
Comment by cermak_rd Wednesday, May 9, 12 @ 11:44 am
Would it hinder portability if each town had its own unique pension parameters?
Comment by reformer Wednesday, May 9, 12 @ 11:50 am
I voted no because I think the state should set minimum pension standards for all public bargaining units. If a local unit of government wants to exceed those standards, that’s up to them. But if school districts or other public bodies overspend and need a bailout, the first place they’ll go is Springfield. So the state should set the benefit levels and encourage uniformity as much as possible.
This question should have been asked 40 years ago though, before so many shenanigans with pension laws allowed all of the sweeteners and scams to go to the fortunate. The horse is out of the barn, and if anything, the state will be setting pension benefits at a very low level for the foreseeable future.
Comment by 47th Ward Wednesday, May 9, 12 @ 11:51 am
I’ld love to have a credit card that I wouldn’t have to pay.
Comment by palatine Wednesday, May 9, 12 @ 11:53 am
Joe is absolutely correct. If the state wants to set pension requirements, let the state pay for it. And while we are on the subject, do something about unfunded mandates in general. Every time the state wants to levy an additional mandate on local government, they simply exempt the legislation from the requirements of the State Mandates Act. Clearly a violation of their own legislative intent. Such actions repeatedly render the Mandates Act moot.
Comment by one of the 35 Wednesday, May 9, 12 @ 11:59 am
I voted no. The General Assembly’s role is to create policy. If the locals can’t comply, they have plenty of zealous advocates that can appear before legislative committees, offer testimony, and defeat bills that they do not like. I continue to be stunned at the vitriol coming from the locals about the General Assembly given the large decisions facing the body that directly impact their budgets.
Comment by Peavy Fan Wednesday, May 9, 12 @ 12:50 pm
Shenanigans? Is that what we call wholesale theft theses days?
This discussion should lead to an overall elimination of the unfunded mandates that regularly come from the state.
Comment by Plutocrat03 Wednesday, May 9, 12 @ 12:57 pm
“the state gets to dictate what the pension benefits are and they don’t have to put in a single dime toward funding the financial obligations that they’ve imposed on local taxpayers”
Which is exactly why they now want to dump teacher pension funding on local communities.
Any pensions bound by state regulations or the constitution should be funded by the state.
Comment by Wensicia Wednesday, May 9, 12 @ 1:00 pm
Blue Grass said it well: those that pay the benefits should have the authority to negotiate them directly with the unions.
Comment by GA Watcher Wednesday, May 9, 12 @ 2:00 pm
No. State should set minimum, locals should then be free to exceed if they want.
And if locals are concerned about end runs by unions in Springfield, then perhaps they need to get a new lobbyist(s) to protect their interests.
Comment by Anonymous Wednesday, May 9, 12 @ 2:04 pm
Lars is absolutely on point:
“Pension benefits should be negotiated by the party with the financial obligation.”
Would apply a general principle: The state of IL should have no say in the process if they are not going to fund the process.
Comment by Judgment Day Wednesday, May 9, 12 @ 3:01 pm
Reformer:
If a local government has a pension plan, they should be required to be in compliance with the federal Pension Benefit Guarantee Corporation (PBGC) requirements. That’s it - portability issue solved.
Yes, the PBGC standards and requirements might not be at the same level as the lofty (and sometimes ridiculous) standards set down by the State of Illinois, but then again, why should local government employees (or state employees, for that matter) have far superior pension benefits over private sector pension benefit plans?
The real problem here is that we are always trying to find ways to get ’somebody else’ to pay for our ‘purchases’, instead of just manning up and saying there are things we just can’t afford, or can’t afford to keep doing.
Comment by Judgment Day Wednesday, May 9, 12 @ 3:17 pm
Peavy Fan - The police and fire unions have been dumping tens and even hundreds of thousands dollars in campaign warchests on both sides of the aisle. Local governments simply cannot compete with that level of purchasing power.
Comment by Bluefish Wednesday, May 9, 12 @ 3:26 pm
I voted yes. Let local governments offer their own retirement benefits, 401k, 403b or pension. The retirement benefits have to be within an organization’s financial ability to pay. But requiring locals to pay into expensive pensions without any control over the investment practices or the funding levels (when the state doesn’t fund its own obligations) is the height of hippocrasy. It’s a joke.
McCoy said it best.
“The biggest structural problem we have with the system is that the state gets to dictate what the pension benefits are and they don’t have to put in a single dime toward funding the financial obligations that they’ve imposed on local taxpayers,” McCoy said
Comment by siriusly Wednesday, May 9, 12 @ 4:03 pm
—”And if locals are concerned about end runs by unions in Springfield, then perhaps they need to get a new lobbyist(s) to protect their interests.”—
Seriously? IML is the collective voice for cities and they are repeatedly trumped by the IAFF/AFFI. IML has repeatedly offered up warnings on the pensions (for nearly a decade) and the GA ignores them.
Our city’s biggest single increase in costs over the last decade is pension costs and there’s not a darn thing we can do. IML has demonstrated repeatedly that even with cities increasing funding three and four fold, the funding ratios are still going down in local police and fire pensions. It’s sickening. IMRF is the best system going and the GA refused to model downstate police/fire pension plans after it. If a majority in Springfield made a downstate pension decision based on logic over lobbying and union interest, we just might have a real and stable pension system. But I know, it’s Illinois and I am asking way too much.
Comment by Shemp Wednesday, May 9, 12 @ 4:32 pm
municipal power is derivative from the State.
Comment by park Wednesday, May 9, 12 @ 6:39 pm
I voted no. I am an alderman in Urbana. We have fully funded our pension systems. Sorry, no sympathy here for cities who have not. They should have.
Comment by jake Wednesday, May 9, 12 @ 8:24 pm
I say social security for all locals with perhaps a mandatory minimum deferred comp employer contribution. Unions can negotiate additional matching amounts above that if they want.
Comment by thechampaignlife Wednesday, May 9, 12 @ 8:45 pm
Yes. State legislators bend over for the Police and Fire unions because none of them want to appear to be against these local “heros”. They now have the most generous pension and benefit packages in the country.
Comment by Reformed Wednesday, May 9, 12 @ 10:38 pm
Hey Jake, if Urbana is doing such a stellar job and you’re an alderman, perhaps you could explain why the police pension fund is only 61.7% funded and your property tax for police pension funding went up over 11% in the last year: http://urbanaillinois.us/sites/default/files/attachments/police-pension-audit-2010-2011.pdf
Cities are taking it in the chin and ignorance of one’s own pension plans doesn’t help.
Comment by Shemp Wednesday, May 9, 12 @ 11:47 pm