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* Bloomberg…
New Jersey became the state with the worst-funded public pension system in the U.S. in 2015, followed closely by Kentucky and Illinois.
The Garden State had $135.7 billion less than it needs to cover all the benefits that have been promised, a $22.6 billion increase over the prior year, according to data compiled by Bloomberg. Illinois’s unfunded pension liabilities rose to $119.1 billion from $111.5 billion.
The two were among states whose retirement systems slipped further behind as rock-bottom bond yields and lackluster stock-market gains caused investment returns to fall short of targets. The median state pension had 74.5 percent of assets needed to meet promised benefits, down from 75.6 percent the prior year. The decline followed two years of gains. The shortfall for states overall was $1.1 trillion in 2015.[…]
While New Jersey only has 37.5 cents available to pay each $1 of benefits, South Dakota, the state with the best-funded pension, had $1.04, according to data compiled by Bloomberg. Kentucky, the state with the second-worst funded retirement system, had a ratio of assets to liabilities of 37.8 percent, followed by Illinois at 40.2 percent.
So, New Jersey and Illinois together make up about 23 percent of the combined unfunded liability of all states in the nation.
Lovely.
* Related…
* Illinois gets more awful news from its largest pension fund: On Oct. 28, TRS’ board of trustees voted to seek a state contribution in fiscal 2018 of $4.56 billion—up a whopping $561 million, or 14.5 percent, over this year’s $3.99 billion.
posted by Rich Miller
Wednesday, Nov 2, 16 @ 1:25 pm
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Previous Post: Calm down
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Christie was routinely hailed as a responsible governor while he was skipping pension payments and Pat Quinn wasn’t. I guess he was just too busy closing bridges.
Comment by Daniel Plainview Wednesday, Nov 2, 16 @ 1:31 pm
Maybe we should annex South Dakota. Get that $1.04 per $1 of liability, sure, but that Corn Palace in Mitchell is no joke, either.
Comment by illini97 Wednesday, Nov 2, 16 @ 1:36 pm
Only moments away from the uninformed, random “we gotta change the constitution” comment. 3…2…
Comment by Ratso Rizzo Wednesday, Nov 2, 16 @ 1:37 pm
Yay us. (tear flowing)
Comment by A guy Wednesday, Nov 2, 16 @ 1:39 pm
This doesn’t go away with just tax increases. Substantive cuts have to occur as well.
At the same time, how do you impose tax increases without driving job creators from the state?
If it was easy, then Chicago would simply tax their way out of a very similar hole. The fact they aren’t doing that tells you how difficult the solution will be.
Even a Democrat Governor won’t make this any less painful.
Comment by Downstate Wednesday, Nov 2, 16 @ 1:49 pm
High time to move to South Dakota, the bastion of economic prosperity, strained native American relations, corn, Mt. Rushmore, and that biker fest that happens once a year.
Comment by Romeo Wednesday, Nov 2, 16 @ 1:54 pm
“This doesn’t go away with just tax increases. Substantive cuts have to occur as well.”
Who would lead Illinois in such an endeavor? Doesn’t seem that we currently have the political courage in Springfield to do this.
Comment by Ole' Nelson Wednesday, Nov 2, 16 @ 1:55 pm
Many people push for re-amortization of our funding schedule. I am sure we will reclaim the top spot soon.
We regularly cite the problem of our unfunded liability and the unbearable cost of our contributions, you cannot address both in any significant way. Christie famously said he wouldn’t contribute to a broken system. I know there has been some changes since then, but this is what Christie advocated for. Our current governor is advocating for us to compete for worst in the nation status by basing our contributions on total payroll instead of pensionable payroll. Back loading leads to more unfunded liability, I get tired of hearing people who want back loading complain about unfunded liability.
And no, Tier 1 reform will not allow you to make any significant reduction in unfunded liability and contributions at the same time. People know this. They may pretend they don’t, but they do. End rant/
Comment by Lil Squeezy Wednesday, Nov 2, 16 @ 1:55 pm
=At the same time, how do you impose tax increases without driving job creators from the state?=
How did Minnesota manage to do it without driving “job creators” (sheesh) from their state?
Comment by JS Mill Wednesday, Nov 2, 16 @ 1:57 pm
“job creators” = the bulk of consumers in the middle class that buy products/services, thereby requiring companies to employ people to create these products/services???
Comment by Ole' Nelson Wednesday, Nov 2, 16 @ 1:58 pm
Maybe if we continue Sham Governin’ without a budget for a few more years we can beat out NJ for #1.
Comment by yeah Wednesday, Nov 2, 16 @ 2:00 pm
==This doesn’t go away with just tax increases. Substantive cuts have to occur as well.
At the same time, how do you impose tax increases without driving job creators from the state?
If it was easy, then Chicago would simply tax their way out of a very similar hole. The fact they aren’t doing that tells you how difficult the solution will be.==
The real question is how do you raise taxes without driving legislators out of office. Chicago has low property taxes, and could raise them without driving jobs to the suburbs. If high income taxes drove significant job creators out of a state, California would be empty.
Comment by Whatever Wednesday, Nov 2, 16 @ 2:05 pm
NJ SC allowed a COLA cut and they are still worse. Some states have passed COLA cuts some held up others did not.Illinois has an AAI.
Comment by David Wednesday, Nov 2, 16 @ 2:10 pm
== NJ SC allowed a COLA cut and they are still worse. Some states have passed COLA cuts some held up others did not.Illinois has an AAI. ==
Been there, tried it (as part of the most recent attempt), court rejected it.
In Illinois your only remaining choice is to pay the money (plus unearned interest) should have been paid in the first place.
Comment by RNUG Wednesday, Nov 2, 16 @ 2:38 pm
Ole’ Nelson,
If you believe consumers are the “job creators” then you need to come to Southern Illinois. The consumers haven’t left but the jobs sure have. And yet, the economy in so many towns is in the toilet.
Comment by Downstate Wednesday, Nov 2, 16 @ 2:43 pm
No wonder Christie was trying to become Vice President so he could get the hell out of New Jersey and let someone else deal with his mess.
Comment by Michael Westen Wednesday, Nov 2, 16 @ 3:00 pm
Whatever has it right. There are many ways to collect more revenue without causing great economic dislocation.
The problem is political. Politicians do not want to be voted out of office. They also have strong beliefs that certain people should pay more, less, or nothing.
Comment by Last Bull Moose Wednesday, Nov 2, 16 @ 3:08 pm
==How did Minnesota manage to do it without driving “job creators” (sheesh) from their state?==
Taxing retirement income.
Comment by City Zen Wednesday, Nov 2, 16 @ 3:08 pm
If you aren’t thinking about the job creators in your solutions for Illinois you are being terribly naive. Decatur is losing job creators, but not population. Per “Ole’ Nelson” this shouldn’t be a problem. Only need consumers, not job creators.
Illinois can certainly turn their back on job creators (like Ole’ Nelson implies), but we do so at our own peril.
Comment by Downstate Wednesday, Nov 2, 16 @ 3:10 pm
Downstate
“If you believe consumers are the “job creators” then you need to come to Southern Illinois. The consumers haven’t left but the jobs sure have. And yet, the economy in so many towns is in the toilet.”
You left out the words “middle class” from my statement.
I credited middle class consumers, who normally use their adequate or greater income to make purchases of items/services that drive the economy as job creators.
Are you saying that despite the unfortunate economic conditions you describe, the consumers of Southern Illinois remain solidly middle class, with the healthy disposable income levels that traditionally accompany that label?
A town with a university, prison, or factory with good pay will be more likely to support a vibrant middle class that creates demand for products and services (restaurants, car dealerships, movie theaters, etc.). The spending of middle class incomes creates a demand for motorcycles, steak dinners, Starbucks coffee, Ford trucks and many other goods/services that provides jobs to others.
I wish Southern Illinois the very best as it is a beautiful part of the state that is full of good people.
Comment by Ole' Nelson Wednesday, Nov 2, 16 @ 3:36 pm
===How did Minnesota manage to do it without driving “job creators” (sheesh) from their state?==
Taxing retirement income.=
That is not all that they did. Come on, you know what they did. Just say it (since @Downstate can’t).
Comment by JS Mill Wednesday, Nov 2, 16 @ 3:41 pm
==That is not all that they did. Come on, you know what they did. Just say it (since @Downstate can’t).==
Taxed retirement income at a higher rate than we tax all income?
Comment by City Zen Wednesday, Nov 2, 16 @ 3:49 pm
Now, when the subject of taxing retirement income comes up, you know, don’t you, that it means all retirement income. Social security, IRAs, public pensions, 401ks, etc. Taxing a specific type of retirement income would not be doable. So, if those with private retirement income savings are leading the call for taxing retirement income(thinking taxing pensions), they have a few more thinks coming.
Comment by Anonymous Wednesday, Nov 2, 16 @ 4:06 pm
==Taxing a specific type of retirement income would not be doable.==
Actually, it would be. You could tax any retirement account where contributions were tax deferred, such as my 401k or your state pension. Other accounts where taxes were already paid on those contributions, such as Social Security and certain IRA’s, would be tax free.
Folks around here seem to dig the flat $50K exemption on all retirement income, but that is inherently unfair because it treats all retirement income equally when it’s not.
Comment by City Zen Wednesday, Nov 2, 16 @ 4:41 pm
The flat number exemption is the only think I’ve ever heard discussed. Given your information City, yes it would be inequitable. Suggestions?
Comment by Anonymous Wednesday, Nov 2, 16 @ 5:57 pm
Just wait……
Comment by Blue dog dem Wednesday, Nov 2, 16 @ 6:55 pm
This is very disappointing. It’s like we are not even trying to be #1. Next thing you’ll tell me Jersey is more corrupt than us too. I really hope to see better effort out of our government this year.
Comment by Captain Obvious Wednesday, Nov 2, 16 @ 7:16 pm