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New “think tank” push experiences strong push-back

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Illinois

Calling the city’s pensions “dangerously underfunded,” the Illinois Policy Institute released a report intended to highlight a statewide problem stemming from the rising costs of pensions for police, firefighters and local government workers. […]

“Despite more money being thrown into pension systems, the relative health of those pensions systems aren’t that much better, or they’re worse. They’re worse in most cities,” [Ted Dabrowski, vice president of policy for the Illinois Policy Institute] said. “You’ve got a lose-lose situation where taxpayers are throwing in more money and yet they’re not getting any benefit from that.”

In a news release issued Thursday, the institute said “every penny” of property tax revenue in Decatur goes to pay for local government pensions.

But…

In fact, about $7.6 million of the city’s $11.7 million property tax levy is designated for pensions. The remaining money is pledged to the Decatur Public Library, municipal band and general obligation bond debt. […]

The fire and police pension funds have a cash balance of about $130 million. They are now 62 percent and 69 percent funded, respectively, [Decatur City Manager Ryan McCrady] said.

“If we stop putting a penny into those pension funds today, employees that would not get a pension are probably in high school,” he said.

* SJ-R editorial…

The Illinois Policy Institute, a Chicago-based think tank and lobbying organization that makes no secret of its advocacy for 401(k)-style public pension plans, injected itself into the local pension conversation this week by offering Springfield aldermen an embarrassingly flawed assessment of the city’s pension picture.

Aldermen politely sent packing the institute’s representative, Ted Dabrowski, who appeared at Tuesday night’s council meeting to present its study of Springfield’s pension system.

For the study, the Illinois Policy Institute used publicly available data from Springfield and 113 other Illinois cities to score and rank how much of an effect pensions are having on taxpayers, property taxes and municipal budgets. Springfield, the study declares, has the worst-funded municipal pension system of the state’s 20 largest cities and spends 100 percent of its general fund property taxes to pay for police, fire and city pensions.

Not so fast.

Among other flaws, the study accounted for all city pension payments, including those for enterprise funds, such as City Water, Light and Power. It did not, however, account for revenue from those enterprise funds, which skewed the institute’s conclusions. […]

The report also asserts Springfield’s property taxes have “skyrocketed” because of unwieldy pension payments. In fact, property tax rates in Springfield haven’t increased since 1984, but revenue meanwhile has increased because of property appreciation and development.

* Good journalism from the two Downstate papers. Not so much from WGN TV…

It’s not just the state of Illinois as a whole that’s dealing with a huge, pension problem.

Municipal pension systems are also in rough shape. A new audit by a conservative think-tank says pensions are wreaking havoc with municipal budgets. […]

If you wonder why you’re having more potholes than ever, it’s not just the weather,” says John Tillman of the Illinois Policy Institute. “It’s the pension crisis in your own community.”

Tillman says a new audit of 114 Illinois cities and towns reveals an alarming problem. ”It doesn’t matter if you’re a low income community or a high end community,” he says. “All these towns are having trouble keeping up with their pension obligations because the amount of the obligation is growing way too fast.”

posted by Rich Miller
Tuesday, Mar 4, 14 @ 2:17 pm

Comments

One of the first things my editor told me on my very first day working in Illinois: “The Illinois Policy Institute is not a credible source.”

Comment by Daryl Tuesday, Mar 4, 14 @ 2:21 pm
From what I can tell reading IPI’s research over the years, they first come up with a solution, ie: turn all public pensions into 401k-like plans and then do the research to support that solution–just the opposite of how research should be done.

Comment by G'Kar Tuesday, Mar 4, 14 @ 2:23 pm
Ha. I love seeing the IPI finally get what they deserve.

Comment by Jorge Tuesday, Mar 4, 14 @ 2:26 pm
Damn workers. Why can’t they just die before they retire?

Comment by YO Tuesday, Mar 4, 14 @ 2:30 pm
It’s too bad the IPI doesn’t just stick to facts and good data. The local pension issue is pretty troublesome to taxpayers, but it’s not a doomsday issue and misrepresentation of facts do not help the policy discussion. It also doesn’t help to throughout extremes, if they offered feasible solutions they might actually be useful.

Comment by Ahoy! Tuesday, Mar 4, 14 @ 2:31 pm
=== Damn workers. Why can’t they just die before they retire? ===

From Bruce Rauner’s lips to God’s ears . . .

Comment by Bill White Tuesday, Mar 4, 14 @ 2:31 pm
It’s more like a stink tank if you ask me. Glad someone is finally fact-checking their BS.

Comment by 47th Ward Tuesday, Mar 4, 14 @ 2:33 pm
The sad thing is that Illinois desperately needs a group like the IPI… just not the IPI.

Comment by Just Observing Tuesday, Mar 4, 14 @ 2:35 pm
I agree with G’Kar in that IPI identifies the premise and then gears its research to prove that point. Clearly IPI is a joke, not a think tank. Unfortunately, there are still lazy journalists who don’t bother to check the facts. At least, they need to call the subject(s) of the report to get their reactions. That is what I was taught by the NIU Journalism Department. I don’t like like the SJR, but I do have to give them a pat on the back for this catch. Normally, they are the ones falling for this kind of sensationalism.

Comment by Norseman Tuesday, Mar 4, 14 @ 2:35 pm
Illinois does have a first class think tank that follows wherever the numbers lead…that is called integrity. Just check out the studies, including those on pension matters, done by the Center for Tax and Budget Accountability.

Comment by Steelerfan Tuesday, Mar 4, 14 @ 2:44 pm
As someone with a 403b, I would love to see government workers move to something like what I have. All of my money–what I put in and what my job(s) have put in–is there. It’s fully vested, if I left this job tomorrow I get all of it except what I haven’t paid in income tax on it. Every time I’ve left a job and moved to another university, my 403b has moved with me.

And by move to, I mean be able to move the pension money they’ve already earned, or perhaps start out new hires in a 403b but somehow phase out the older pensions in a way that doesn’t mess with anyone’s retirement funding.

Comment by Chavez-respecting Obamist Tuesday, Mar 4, 14 @ 2:44 pm
The most depressing aspect of this is that state government reporters have, for the most part, allowed this alleged think tank to get away with all sorts of crud. State reporters tend to look down their noses at small-town local government reporters, but it was two of those local-beat folks who showed the staties how to write a real article about this stuff.

Comment by Rich Miller Tuesday, Mar 4, 14 @ 2:45 pm
JustObserving- You are so right.

Comment by JSlim Tuesday, Mar 4, 14 @ 2:52 pm
Every time my local paper runs Illinois News Network stuff on the front page, or swallows so-called “research” like this, it just makes me gag.

Comment by Ray del Camino Tuesday, Mar 4, 14 @ 2:53 pm
“Just check out the studies, including those on pension matters, done by the Center for Tax and Budget Accountability. ”

You got some evidence for that?

“Every time I’ve left a job and moved to another university, my 403b has moved with me. ”

That’s the flipside to the benefit, it’s designed to keep people from leaving as the pension doesn’t carry. Traditionally alot of these jobs are underpaid, but they make up for them in benefits - it keeps talented people from jumping ship.

Comment by iThink Tuesday, Mar 4, 14 @ 2:56 pm
Problem is the truth is in the middle.

In 12 years, our fire pension levy has increased more than 6 fold and the police more than 3 times in those 12 years. In that same time the funding ratio has dropped over 20% points in both in those 12 years.

We will spend more on fire pensions than we will on regular salaries for our fire department this year.

Comment by Local Guy Tuesday, Mar 4, 14 @ 2:56 pm
Oh, and we were still better funded than most when the last COGFA study was done. It’s not pretty.

Comment by Local Guy Tuesday, Mar 4, 14 @ 3:00 pm
Mr. Tillman - yes, the potholes really are caused by the severe winter weather. Sometimes a cigar is just a cigar, not an unfunded pension liability.

Comment by Commander Norton Tuesday, Mar 4, 14 @ 3:14 pm
Potholes are caused by pensions? IPI gots to go.

Comment by From the 'Dale to HP Tuesday, Mar 4, 14 @ 3:33 pm
It’s unbelievable that donors continue to line the pockets of this organization. These guys are the ultimate con men! Lawmakers laugh at their lobbying efforts, their studies are almost always seriously flawed or at the very least geared towards an outcome of whomever is paying for it. It amazes me that they continue to exist and donors are so blinded by their con.

Comment by Priceless... Tuesday, Mar 4, 14 @ 3:40 pm
The IPI is what it is, which is not exactly credible. But Warren Buffett and the Wall Street Journal are saying the same things as IPI when it comes to the vulnerability of municipal pension systems. Anyone who dismisses deep-rooted problems with municipal pensions simply because IPI says there are problems is being somewhat foolish.

Comment by just pandering Tuesday, Mar 4, 14 @ 4:14 pm
Who or what is funding these studies?

Noticed Bruce picked up more donations from IPI folks recently. Is he the one funding this junk science?

Comment by hisgirlfriday Tuesday, Mar 4, 14 @ 4:27 pm
No one knows who pays the bills at IPI, which is one of IPI’s bigger credibility problems. But be careful about calling it junk science. Wall Street Journal didn’t use junk science, it hired a bona fide research firm with no dog in the fight that concluded Springfield is facing one of the worst municipal pension problems in the nation. The problem is real, even if IPI is a ventriloquist for Rauner.

Comment by just pandering Tuesday, Mar 4, 14 @ 5:11 pm
When bonding companies keep sounding the warnings, and the people in Springfield
keep kicking the can. Then you know there’s
a problem.
Bankruptcy soon becomes an option. Ask Stockton,
California and Detroit. We should negotiate
before it’s to late.

Comment by Anonymous Tuesday, Mar 4, 14 @ 5:30 pm
The Wall Street Journal, another great source for information, owned by the “unbiased” Rupert Murdoch!

Comment by Finally Out (formerly Ready to Get Out) Tuesday, Mar 4, 14 @ 5:46 pm
This Illinois farm boy has no use for the wild-eyed misanthropes from Illinois Police Institute.

This is where I’ve always lived and am raising my family. A great life, by the way, better than 99% of the rest of humanity, ever.

Half-assed skinheads get no scraps in my scrapbook.

And the horse you rode in on, losers.

Comment by wordslinger Tuesday, Mar 4, 14 @ 5:57 pm
@Anonymous 5:30:

How’s life in your little fantasyland? Enough with the bankruptcy garbage. Springfield isn’t anywhere close. The ignorance out there amazes me.

Comment by Demoralized Tuesday, Mar 4, 14 @ 6:02 pm
I take no position but here is IPIs response:

http://illinoispolicy.org/illinois-policy-institute-responds-to-the-state-journal-register/

Comment by J. Nolan Tuesday, Mar 4, 14 @ 6:07 pm
Amazing what people will believe without looking into motivations of those screaming that the sky is falling. Even more frightening is how willing they are to buy it hook, line and sinker without informing themselves.

Comment by YO Tuesday, Mar 4, 14 @ 6:10 pm
=== Damn workers. Why can’t they just die before they retire? === Right BEFORE they die, otherwise who would pay the taxes?

Comment by Pensioner Tuesday, Mar 4, 14 @ 7:29 pm
Interesting observation on WGN swallowing IPI’s “think tank” drivel, while the other news outlets actually did some reporting and challenged it. But unfortunately, I’d bet the majority - perhaps the vast majority - of news outlets (print, broadcast, whatever) just take that drivel and run with it.

Just as Bruce Rauner is relying on ignorant voters to accept his “government union bosses” demagoguing without perceiving that he’s actually planning to pummel the retirement benefits of hard-working teachers and tens of thousands of honest public workers, and just as Travis Akin surgically focuses his goofy “lawsuit abuse” stumping on small and medium-sized news outlets less likely to challenge him, so too does the IPI know that most news outlets don’t realize (or don’t care) that it’s a right-wing lobbying shill merely dressed as a “think tank.”

If the corporate elite are throwing money at IPI, sorry to say there must be a reason for that - most of the time, the shtick works.

Comment by Raymond Tuesday, Mar 4, 14 @ 8:27 pm
I think our local funds are fine but if the State reduces the amount it sends to local units of government, which I think is likely, then funding for local employees may become problematic without an infusion of new fees or taxes.

Comment by Bourbonrich Wednesday, Mar 5, 14 @ 9:20 am