Latest Post | Last 10 Posts | Archives
Previous Post: Good morning!
Next Post: Ricketts property tax issue referred to state’s attorney
Posted in:
* Tribune editorial on Mayor Lori Lightfoot and pensions…
We’re grateful to hear an elected official confront the details of the pension crisis and commit to solving it, regardless of the potential political cost. So far the responses from Springfield have been empty. A lot of: We look forward to hearing what the mayor has to say. …
Where’s the urgency?
True, Lightfoot is thin on details. She told Crain’s Chicago Business that handing out generous cost of living allowances to government retirees is “unsustainable,” and she wants to see “structural changes” to the pension system. But what exactly does she want from the state? How does she propose balancing the 2020 city budget? How much will she raise taxes if Springfield does help her — or, by contrast, refuses to help her — with pension relief, taxing authority and the possibility of a Chicago casino? To be determined.
What we know for certain: Chicago has a pension disaster. Springfield has one, too. Future stability and prosperity are on the line. Lightfoot doesn’t have a plan yet, but says she’s determined to act.
That puts her one step ahead of Springfield.
Thoughts?
posted by Rich Miller
Thursday, Sep 5, 19 @ 9:53 am
Sorry, comments are closed at this time.
Previous Post: Good morning!
Next Post: Ricketts property tax issue referred to state’s attorney
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
===But what exactly does she want from the state? How does she propose balancing the 2020 city budget? How much will she raise taxes if Springfield does help her — or, by contrast, refuses to help her — with pension relief, taxing authority and the possibility of a Chicago casino?===
Mayor Lightfoot and Crew;
1) Decide on options you want to discuss with the GA Leaders and this governor.
2) Actually talk with… the GA Leaders and the Governor… first… like not say silly things publicly then hope they get “hints” or “drifts”
3) Get strong old hands that understand process and the politics to them both to meet with GA Leaders’ Crews and the Governor’s too.
4) Whittle down to actual options all can agree to, and then discuss how to plan… to move the whole plan… with the small steps to achieve success.
5) Now… talk to the press.
===That puts her one step ahead of Springfield===
Meh, this is the Trib trolling.
You can’t call out Lightfoot for lacking details then be honest by saying it’s farther than Springfield has gotten.
Comment by Oswego Willy Thursday, Sep 5, 19 @ 10:09 am
The urgency is to tax the Trib editorial board more, as well as other rich anti-union right wingers. The urgency is to generate more revenue and have a dedicated plan to pay down pension debt. We already reformed pensions, and it’s not moral and right that we keep cutting the middle class when upper income people are taxed at the same relatively-low state income rates as those certain right wingers want to cut.
Comment by Grandson of Man Thursday, Sep 5, 19 @ 10:11 am
Okay, the Trib Board got in their regular exercise of “harrumphing” a la Governor Lepetomane’s cabinet in “Blazing Saddles” (that’s HEDLEY!)
Comment by VerySmallRocks Thursday, Sep 5, 19 @ 10:11 am
How is the Vallas plan not the starting point?
https://capitolfax.com/2019/01/18/rnug-vallas-plan-appears-to-make-chicagos-pension-problem-manageable/
Comment by Bertrum Cates Thursday, Sep 5, 19 @ 10:15 am
“Where’s the urgency?” As Caesar might have said, “Pensionem articulo diei non fuit.” “The pension crisis was not built in a day.”
Comment by Skeptic Thursday, Sep 5, 19 @ 10:26 am
She’s one step ahead of Springfield but has no clue how to fix the problem? That doesn’t bode well.
Comment by SSL Thursday, Sep 5, 19 @ 10:26 am
Maybe invest some of the pension funds in student loans. The going rate is very high: 4.53% and masters degree/parent student loan is 7.8% Ouch. And they can’t be discharged in bankruptcy. High rate of return means faster compounding interest.
Comment by 17% Solution Thursday, Sep 5, 19 @ 10:27 am
Lori Lightfoot may be light on details, but she does seem to have grasped one basic fact: government employee pensions in Illinois are just too expensive. Let’s see if she follows that to its natural next step: government employees are going to have to accept a haircut.
Comment by Lord Voldemort Thursday, Sep 5, 19 @ 10:27 am
All I hear is chatter.
As long as the Mayor is asking others to solve the problem, it will not be solved. Chicago has the resources to solve its financial problems. But the solutions will cause pain.
Every salary increase increases the pension problem. Especially for the Tier One employees. The negotiations with the Teachers Union will show how balanced budgets compare to labor peace.
Comment by Last Bull Moose Thursday, Sep 5, 19 @ 10:29 am
=== That puts her one step ahead of Springfield. ===
Sorry, but I believe Springfield acted this year, by making its full pension payment.
Illinois wasted seven years under Rod Blagojevich avoiding the most obvious solutions to the state’s structural deficit all because of his deranged presidential ambitions and no new taxes pledge. We had no practical plan.
Illinois squandered five years under Quinn seeking to appease the Tribune editorial board by passing unconstitutional pension reforms.
Again, we had no practical plan.
We wasted another four years under Bruce Rauner chasing a politically impossible “Grand Bargain” that would force union members and those they elect to choose between funding their retirement and their collective bargaining rights.
Again, we had no practical plan.
16 years we could have made real progress on our structural budget problems, all squandered by those who chose to govern by op-ed, by press release, by Twitter. It’s time we stop engaging in activities that seem designed to give us something to tweet about and engage in the work of crafting a thoughtful, practical, long term plan. Something more than 144 characters, please.
Comment by Thomas Paine Thursday, Sep 5, 19 @ 10:30 am
===government employees are going to have to accept a haircut.===
Tier 2…
Pensions are guaranteed, constitutionally.
There’s that too.
Comment by Oswego Willy Thursday, Sep 5, 19 @ 10:33 am
When the Municipal Workers and Laborers plan becomes insolvent in 2027 with the current projections how does the constitutional guarantee work if there isnt money to honor the constitutional guarantee? It’s like when an unstoppable force meets an immovable object. Something has to give.
Comment by Maximus Thursday, Sep 5, 19 @ 10:41 am
What would Lightfoot or the Trib recommenced that would be constitutional? Because other than making payments, changing the payment ramp or restructuring investments there isn’t anything that can be done.
I realize political memories are short, but the General Assembly passed multiple bills to structurally change the pension systems. Courts struck down those changes. You can’t change the COLAs. The attempt by Chicago park district to negotiate pension changes and pass a bill was also struck down.
Comment by Glum Thursday, Sep 5, 19 @ 10:51 am
==government employees are going to have to accept a haircut.==
The Illinois Constitution (rev. 1970) and the Illinois Supreme Court say different.
Comment by Jocko Thursday, Sep 5, 19 @ 10:52 am
== how does the constitutional guarantee work if there isnt money to honor the constitutional guarantee? ==
Given the current rulings, we can assume that, when a pension fund runs dry, the involved entity … city of Chicago in the instance cited … will just have to pay the pensions directly on a pay as you go basis. And the only thing ahead of the pension payments may be unsecured bond payments; it isn’t clear from the court rulings if the bond payments would be ahead of pension payments, equal in rank to the pension payments, or if the pension payments would take priority over bond payments that rely on general revenue sources (as opposed to a secured bond tied to a specific revenue source).
In such an instance, we can also assume government services will decline due to lack of funds.
Going to be some interesting court cases if / when the pension funds run dry.
Comment by RNUG Thursday, Sep 5, 19 @ 10:57 am
The ILSC has ruled the government employer is constitutionally required to make pension payments even if a pension fund becomes insolvent.
Comment by Steve Polite Thursday, Sep 5, 19 @ 11:00 am
The constitutional guarantee essentially excludes options that force changes on existing or former employees. Tier 2 is bringing down current costs, but spread over roughly 20 years starting in 2011. Options like buyouts can offer some relief, but not what a successful short term fix would hope for.
That leaves debt restructuring as the main tool that can move the budget needle. That comes with its own problems, like where sufficient future revenue comes from to cover restructured payments.
Comment by muon Thursday, Sep 5, 19 @ 11:11 am
It’s hard to pay the ramp urgently when you need to do it annually for the next 25 years.
Comment by Simple Simon Thursday, Sep 5, 19 @ 11:14 am
I don’t agree that Springfield has done nothing. They’ve done Tier II and now Tier III. The people that argue that nothing has been done are sayting that because they want something done to reduce the pensions of those in Tier I. Without that “solution” they believe nothing has been done.
Comment by Demoralized Thursday, Sep 5, 19 @ 11:17 am
The Pension Monster is in full roar.
Either we keep feeding the monster or we don’t.
The bigger problem is falling interest rates. The pension forecasts are based on 6-8% returns. Those are impossible to get with today’s declining rates.
If we enter negative rate territory, it will be even worse.
It’s not just that we don’t have enough food for the Pension Monster, but the bucket that holds the food is developing an ever larger leak.
Comment by Downstate Thursday, Sep 5, 19 @ 11:24 am
Lightfoot isn’t merely “light on details”, she has NONE. And she has already fumbled on the kickoff. GO BEARS (banned punctuation).
Comment by revvedup Thursday, Sep 5, 19 @ 11:38 am
Once the pension funds go pay as you go, the responsible entity is on the hook - or at least that is what IL SC dicta says, they have never addressed it directly (though I am sure they will have the chance to).
Per the constitution, the pensions will always be paid - there is plenty of money to ensure that. It just means that streets won’t be paved, bridges might fall, 43 kids might be in a classroom and police cars may not have gas.
Comment by JP Altgeld Thursday, Sep 5, 19 @ 12:00 pm
A lack of urgency is not the problem. A lack of constitutionally viable solutions is the problem. No amount of handwringing or ferry dust sprinkling will change that.
Comment by Roman Thursday, Sep 5, 19 @ 12:08 pm
Even if Lightfoot gets the increased transfer tax and a high end services tax, that, at best will cover maybe half of the deficit Chicago is looking at. One solution would be a line item property tax dedicated to pensions. In any case, property taxes are going to have to go up significantly.
Comment by Looking down the Road Thursday, Sep 5, 19 @ 12:12 pm
“No street paving and bridges falling”. There are several road/bridge rebuilding sights underway just on my daily commute. Good to see the Rauner backlog being addressed. Squeeze the beast did not work. The pensions will not be allowed to go insolvent either. Some new commenters with the same old hyperbole.
Comment by Just A Dude Thursday, Sep 5, 19 @ 12:16 pm
Lightfoot is echoing someone’s talking points. Keep alive the angst, the urgency, the desperation. For what purpose? Supreme court upheld the constitutional language, Tier 2 is in effect. Again, what purpose does this public worker bashing accomplish?
Comment by AnonymousOne Thursday, Sep 5, 19 @ 12:16 pm
== a line item property tax dedicated to pensions ==
That kept the Chicago teachers pension fully funded for decades. When it went away in the 90’s, so did the pension fund’s solvency.
Comment by Roman Thursday, Sep 5, 19 @ 12:42 pm
–what purpose does this public worker bashing accomplish?
The Pension Monster has gotten so large, that residents of Chicago must now decide if they want astronomical taxes, or if they will lead the effort to amend the state constitution.
Lightfoot hasn’t said anything that politicians aren’t saying behind closed doors. She’s been the only mayor that’s had the courage to talk about it publicly and try to confront it head on.
Bashing her doesn’t make the problem go away. In fact it only causes the eventual pain (and there will be pain) to be that much greater.
Amazing, how Lightfoot has gone from hero to heel in just over 3 months
Comment by Downstate Thursday, Sep 5, 19 @ 12:44 pm
===Amazing, how Lightfoot has gone from hero to heel in just over 3 months===
That’s what happens when you try to navigate policy publicly when you need too many actors to help, and you can’t leverage it in a speech.
Comment by Oswego Willy Thursday, Sep 5, 19 @ 12:53 pm
Downstate: Amending the constitution regarding the pension protection does not eliminate the unfunded liability. It has to be paid. I am not sure what Lightfoot is doing beating this drum as others have also stated. Disappointing, that is for sure.
Comment by Just A Dude Thursday, Sep 5, 19 @ 12:57 pm
===She’s been the only mayor that’s had the courage to talk about it publicly and try to confront it head on===
1) Wrong. Daley (who caused most of the problem) and Emanuel both did a lot of talking. Talk is cheap.
2) Head on? She’s waffled over and over on a constitutional amendment and has yet to propose a plan.
You are simply projecting your hopes. Right now, there’s nothing there.
Comment by Rich Miller Thursday, Sep 5, 19 @ 12:58 pm
@OW and the other Lightfoot bashers…
She has not presented a plan because there is no possible plan to present. The tax rates will have to go sky high, period. The Chicago taxpayer will have to decide if they are okay with that or whether they will demand something else.
There is no possible plan to be presented.
Comment by Talleyrand Thursday, Sep 5, 19 @ 1:01 pm
===bashers===
(Sigh)
===She has not presented a plan because there is no possible plan to present.===
Then why is she Mayor? She should then resign immediately, with that stick figure thingy where the person is confused.
===The tax rates will have to go sky high, period.===
The freight needs to be paid, but where are the cuts, what can she try to get from the Four Tops, what can be done with long term debt?
===Chicago taxpayer will have to decide if they are okay with that or whether they will demand something else.===
She’s been in office less than 16 weeks, for cripes sake.
They, the VOTERS demanded by a mandate Lightfoot lead.
1) Decide on options you want to discuss with the GA Leaders and this governor.
2) Actually talk with… the GA Leaders and the Governor… first… like not say silly things publicly then hope they get “hints” or “drifts”
3) Get strong old hands that understand process and the politics to them both to meet with GA Leaders’ Crews and the Governor’s too.
4) Whittle down to actual options all can agree to, and then discuss how to plan… to move the whole plan… with the small steps to achieve success.
Lightfoot needs to come to grips with process as well as policy.
Comment by Oswego Willy Thursday, Sep 5, 19 @ 1:06 pm
===1) Decide on options you want to discuss with the GA Leaders and this governor.===
What options exist, @OW? The SC is clear that the cuts that actually count and make a difference are not possible. What else can she do?
What can an “old hand” tell them that they don’t already know?
There are no good options at this point and anyone saying otherwise does not have a strong command of the issue. The choice is now binary.
Comment by Talleyrand Thursday, Sep 5, 19 @ 1:15 pm
===The SC is clear that the cuts that actually count and make a difference===
… were never cuts at all, as the money owed… is OWED. Nothing “pre-changes”, anything existing today… that exists.
===What else can she do?
What can an “old hand” tell them that they don’t already know?===
If she’s not talking or using any, she’ll never know what they think.
Are you saying her Staff and Crew are in over their heads. I know I am. Oh, there might be a teachers’ strike too, don’t forget that.
I’m not the Mayor, not part of her Crew, Staff, cabinet, kitchen cabinet.
I do know Lightfoot is on this trainwreck listening tour, and it’s a trainwreck because instead of rolling out ideas for discussion, it’s like a bad newspaper comment section with ideas that will never happen.
Lightfoot needs to be smart and creative and listen to policy wonks on cuts, revenue, and options. When you hear her, none of that is happening.
===There are no good options at this point and anyone saying otherwise does not have a strong command of the issue. The choice is now binary.===
If that *is* true, tell the elected Mayor of Chicago to stop talking and take those words as the gospel.
Or…
1) Decide on options…
Etc.
Comment by Oswego Willy Thursday, Sep 5, 19 @ 1:23 pm
===2) Actually talk with… the GA Leaders and the Governor… first… like not say silly things publicly then hope they get “hints” or “drifts”===
This seems like a huge missed opportunity. Revenue will need to be raised, so you’d be much better served implementing a coordinated effort with all the political capital you can muster instead of giving vague ideas to the press.
Comment by njt Thursday, Sep 5, 19 @ 1:29 pm
@OW
So you present no ideas? Got it. Her “trainwreck listening tour” are actually the budget hearings. RMD attended them in person for years. Rahm never did. She has decided to attend them. Keep up, as you say.
As for “listen to policy wonks on cuts, revenue, and options” she is doing that. Perhaps your angst comes from not being involved?
Comment by Talleyrand Thursday, Sep 5, 19 @ 1:33 pm
It seems that Mayor Lightfoot has already determined that property taxes in the city of Chicago should not be increased.
First she should find out if property taxes in the city of Chicago are greater, less, or equal to property taxes in the Chicago suburbs.
It is likely that Chicago property taxes should be increased to equal suburban property taxes.
That would be a good starting place for finding new revenue.
Comment by Enviro Thursday, Sep 5, 19 @ 1:37 pm
It could be that her plan is to simply blame Springfield: “We asked them for relief and they said ‘no.’ Now, all I can do is to raise your property taxes. It’s their fault, not mine.”
I think that’s a lousy plan…but it is a plan.
Comment by Roman Thursday, Sep 5, 19 @ 1:38 pm
===So you present no ideas?===
When did I become Mayor of Chicago? lol
I’m sure if you dig around, I gave a thought or three. Honest.
If Mayor Lightfoot comes a-lookin’ for me, I’ll let you know.
Lightfoot knows what to do. She, as mayor, needs to do it.
===Her “trainwreck listening tour” are actually the budget hearings.===
… which she states, clearly, they’re light $838 million, without a plan to have folks chew on. It’s a total trainwreck to process when you go in front of folks with… “well, I got nuttun, how about you?”
===Perhaps your angst comes from not being involved?===
Nah, I’m good, thanks. More popcorn, a slurpee, but I’m good.
Why it’s about me as you defend a mayor seemingly clueless to policy and process to get policy is beyond me… but, more popcorn, please.
Comment by Oswego Willy Thursday, Sep 5, 19 @ 1:39 pm
== trainwreck listening tour ==
Disagree. Providing a platform for failed aldermanic candidates to speak about pensions while wearing an Uncle Sam costume will solve this problem. (Hat tip to Shia Kapos’ twitter feed.)
Comment by Telly Thursday, Sep 5, 19 @ 2:01 pm
- Telly -
That’s on me. My bad.
Well done.
:)
Comment by Oswego Willy Thursday, Sep 5, 19 @ 2:06 pm
==What options exist==
Well, for one, she shouldn’t cave to the CTU. She gave them a generous offer, which they should take. She should start by holding the line. If they strike, they strike, and she should explore every other option, including asking the GA to disallow strikes by the CTU, they have WAY too much power over the city with the system as it is. At the same time, start shuttering underutilized schools - or simply give “the gangs” the keys to the Mayor’s office.
Another - supposedly, there’s eleven or twelve hundred known individuals in the city who are responsible for a huge amount of the violence. Ask for the Fed’s help in locking these folks down, if necessary, Elliot Ness style. If she can show improvement in this arena, she will gain more and more credibility with the public.
Comment by Stuntman Bob's Brother Thursday, Sep 5, 19 @ 4:52 pm
“Ask for the Fed’s help in locking these folks down“
Yeah. There’s this quaint concept call due process. You don’t get arrested just for being on a list of suspects, you have to actually commit a crime.
Comment by 17% Solution Thursday, Sep 5, 19 @ 7:07 pm
==Yeah. There’s this quaint concept call due process. You don’t get arrested just for being on a list of suspects, you have to actually commit a crime==
Either this 1200-odd person list is real or its not. If it is, then by definition, these folks have already committed more than their fair share of crimes. Now it’s a matter of surveillance, evidence collection, pushing witnesses to actually testify - you know, real cop stuff. Chicago has what, maybe a ten percent clearance rate on homicides? Don’t you think that’s part of the problem for this city? Hard prosecution doesn’t fit into the whole “social justice” mentality, but for cryinoutloud, the current Mayor is a former Prosecuter. Get prosecutin’, Mayor.
Comment by Stuntman Bob's Brother Thursday, Sep 5, 19 @ 8:34 pm
Roll back the overly generous healthcare benefits enjoyed by City and State employees, and put the savings towards their pension funds.
Comment by Just Me Thursday, Sep 5, 19 @ 9:30 pm