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* Setup from Politifact…
“We’ve got 600-plus police and fire pensions Downstate that are on the cusp of insolvency because they don’t have the revenues that they need to be able to keep those pensions going,” [Mayor Lori Lightfoot told the Chicago Sun-Times]. “They’ve done all the things that we have done historically: raised property taxes, sold assets, had their ratings reduced by rating agencies, and they’re out of levers to pull, so they need help just as we do. So this isn’t a Chicago-specific thing.”
Um, no.
* The backtrack…
“I think highlighting that there are lots of police and fire pension systems that are underfunded is accurate,” said Amanda Kass, associate director of the Government Finance Research Center at the University of Illinois-Chicago. “I don’t think it’s accurate to indicate that the majority are on the brink of insolvency.” […]
“The mayor’s point that municipalities throughout the state are struggling with their pension obligations is an important one,” spokeswoman Anel Ruiz wrote in an email. “Approximately 30% of the 632 public safety pension funds in the state are currently funded at ratios of under 50 percent, according to the Department of Insurance.”
That math tracks with the DOI data included in the commission’s report. For comparison, Chicago’s police and fire pensions are both funded at levels below 25%. Just 25 Downstate public safety funds have a ratio lower than that, records show.
It’s difficult to say your city’s pension funds are just like everyone else’s when only 4 percent of Downstate and suburban funds are worse off than your two biggest problems.
…Adding… From comments…
(W)hat has confused me about her “this is a solution for everyone” framing is that I don’t understand what she is proposing that will help downstate towns at the same time as Chicago. Is she suggesting that the real estate transfer tax be raised everywhere, not just Chicago?
* And then there’s this…
Peoria, for example, faced down a $20 million pension gap by cutting its city workforce by about 16 percent — eliminating 22 firefighter positions and 16 police jobs to close its $6 million budget hole.
Downstate, Carterville raised property taxes by 30 percent last year to help cover a shortfall created by a state mandate.
Kankakee increased its municipal sales tax to help pay off its pension tab.
And even little Alton (population: less than 30,000) had to take action: it sold off its water treatment plant for about $54 million to help pay down its unfunded pension liabilities.
Of course, Chicago is much larger and a central pillar of the state’s economy, but lawmakers up for re-election may not see it in purely economic terms. Helping the Windy City gives rhetorical ammunition to political opponents looking to needle incumbents who might approve any kind of a tax hike when so many others were left to fend for themselves.
“Little Alton” is about the same size as Kankakee and both are much larger than Carterville, but you get the drift.
* Also, the property taxes in, say, Rockford (a city mentioned more than once by Lightfoot) are significantly higher than they are in Chicago. Rockford didn’t wait for the state.
posted by Rich Miller
Monday, Sep 9, 19 @ 12:07 pm
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Previous Post: Quick reactions to a perceived crisis can easily result in bad laws
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Aside from what she said being false, what has confused me about her “this is a solution for everyone” framing is that I don’t understand what she is proposing that will help downstate towns at the same time as Chicago. Is she suggesting that the real estate transfer tax be raised everywhere, not just Chicago?
I feel like she grabbed on to a talking point because she convinced herself it sounds good without any idea how that (false) talking point would actually help her nonexistent strategy.
Comment by Montrose Monday, Sep 9, 19 @ 12:16 pm
When the facts aren’t on your side, then resort to lies and extreme exaggeration. Seems to work well for a lot of politicians.
Comment by former southerner Monday, Sep 9, 19 @ 12:25 pm
Actually tiny Monmouth raised its property taxes even though it could have taken the under 25000 route.
Comment by Not a Billionaire Monday, Sep 9, 19 @ 12:31 pm
== Chicago’s police and fire pensions are both funded at levels below 25%. Just 25 Downstate public safety funds have a ratio lower than that. ==
True, but that is not necessarily the best way to measure the financial stress being placed on suburban and downstate towns. Many have funding ratios higher that 25%, but they actually carry more debt than Chicago when measured as a portion of their operating revenues.
I guess I’m nitpicking a bit, but that’s what the BGA does with many of these fact checks, so while in Rome…
Comment by Roman Monday, Sep 9, 19 @ 12:31 pm
== Rockford didn’t wait for the state. ==
Actually, they pointed to legacy costs a few years ago and asked the GA for relief related to fire safety minimum manning requirements. They couldn’t get their bill out of committee, so they had little left to do except raise property taxes. I’m guessing the same fate awaits Mayor Lightfoot’s request for help.
Comment by Roman Monday, Sep 9, 19 @ 12:45 pm
@Roman - The state handcuffs municipalities with so many regulations, it makes it almost impossible to reform. Chicago and Cook County do tend to get exempted more than most, but I always get frustrated by state politicians that like to wash their hands of Chicago and other cities problems when they it is convenient to do so.
Comment by Chicagonk Monday, Sep 9, 19 @ 12:59 pm
>We’ve got 600-plus police and fire pensions Downstate…
I appreciate the fact that she attempted to take a page from Pritzker’s book and relate the challenges facing Chicago to those of other cities in the state. I don’t get the sense that it’s part of some kind of thought out, cohesive strategy to accomplish some kind of thought out, cohesive solution.
Comment by Earnest Monday, Sep 9, 19 @ 1:16 pm
Lori must not know Chicago teachers was 104 percent funded in 1995 before Daley’s pension holiday. Why should the State bail out Chicago for what was a decision to forego a decade of mismanagement
Comment by Sue Monday, Sep 9, 19 @ 1:28 pm
She may have some of the details wrong but the broader point remains true, it’s a massive problem for municipalities across the state. Look at the lengths those towns went to in order to keep up with their pension payments.
Think that’s going to get easier as the years go by?
Comment by Boone's is Back Monday, Sep 9, 19 @ 1:45 pm
She’s pulling a very Trumpian move. Tell a lie about downstate enough times that the Chicago media will repeat it enough and Chicago legislators repeat it enough that it won’t be her problem when downstate gets screwed.
Comment by Token Conservative Monday, Sep 9, 19 @ 1:53 pm
== The state handcuffs municipalities with so many regulations ==
True, although the state didn’t mandate they pay the ARC on public safety pensions for decades, which is why we’re in this mess.
== Lori must not know Chicago teachers was 104 funded in 1995 before Daley’s pension holiday. Why should the State bail out Chicago for what was a decision to forego a decade of mismanagement ==
Different pension fund and different unit of government, but to the larger point, it should be noted that it was a pension holiday delivered by Jim Edgar and a GOP dominated GA. (Chicago legislators voted against it.) In other words, state and local government have work hand-in-hand in screwing up local pensions.
Comment by Roman Monday, Sep 9, 19 @ 2:05 pm
I suppose going through the very lengthy DOI biennial report on public pensions could provide something for everyone, depending on their moral elasticity.
But the main, in my view, is that government services are deteriorating in many areas and taxes are increasing in hard times to fund a very generous public retirement system benefitting about 600,000 gov workers, according to the DOI, when the vast majority of the state’s private citizens don’t have anything even close for their golden years.
There’s a tough fairness issue here regardless of who you want to blame for plan underfunding, which certainly cannot include most voters.
Comment by Cook County Commoner Monday, Sep 9, 19 @ 2:24 pm
When do folks start discussing the social justice issue of about 600,000 public sector defined benefit plan participants receiving retirements benefits that the majority of Illinoisans can only dream about?
Comment by Cook County Commoner Monday, Sep 9, 19 @ 2:28 pm
===When do folks start discussing the social justice issue of about 600,000 public sector defined benefit plan participants receiving retirements benefits that the majority of Illinoisans can only dream about?===
They could work in civil service.
Who is stopping them?
Comment by Oswego Willy Monday, Sep 9, 19 @ 2:30 pm
All 12 million of them OW?
Comment by Cook County Commoner Monday, Sep 9, 19 @ 2:33 pm
===All 12 million of them===
The question was who is stopping them?
People make choices on their jobs and careers every day.
Some of the very same folks who complain about teachers’ benefits, would never want to be a teacher…
So… that’s a life choice.
Comment by Oswego Willy Monday, Sep 9, 19 @ 2:35 pm
===All 12 million of them===
How many would like to be prison guards?
I’m guessing less than 12 million
Comment by Oswego Willy Monday, Sep 9, 19 @ 2:40 pm
OW. Certainly people make life choices. But acquiescing to gov officials’ mismanagement of retirement plans and then foisting the cost on them decades down the road is not one of them. Everyday folks foolishly believe in some baseline level of competence, ethics and morality of their gov officials. I guess from a gov person’s perspective, this the penalty for their naivete.
Comment by Cook County Commoner Monday, Sep 9, 19 @ 2:43 pm
===Certainly people make life choices. But acquiescing to gov officials’ mismanagement of retirement plans…===
The workers made the payments the to the plans…
The pensions are guaranteed.
Comment by Oswego Willy Monday, Sep 9, 19 @ 2:47 pm
“When do folks start discussing the social justice issue of about 600,000 public sector defined benefit plan participants receiving retirements benefits that the majority of Illinoisans can only dream about?”
A very good point. We really need a strategic effort to get the private sector to follow government and provide retirement benefits that honor a person’s years of service. How people are treated after a lifetime of work in the private sector is an injustice.
Comment by Montrose Monday, Sep 9, 19 @ 2:51 pm
Madame Mayor is simply trying to find any kind of solution that doesn’t compel measures that leave a very large number of city residents wondering why they should continue to live in a place where taxes are high, businesses are leaving and crime is such a problem that they’re told they just need to deal with being carjacked and burglarized.
Comment by JB13 Monday, Sep 9, 19 @ 2:51 pm
===Everyday folks foolishly believe in some baseline level of competence, ethics and morality of their gov officials.===
They were elected.
Comment by Oswego Willy Monday, Sep 9, 19 @ 2:52 pm
Montrose says “A very good point. We really need a strategic effort to get the private sector to follow government and provide retirement benefits that honor a person’s years of service. How people are treated after a lifetime of work in the private sector is an injustice.”
Amen. Imagine if all people after a working career could have the peace of mind knowing they will be protected. We would all pay more for goods and services but all of our neighbors would have the protection of a defined benefit.
Comment by don the legend Monday, Sep 9, 19 @ 3:04 pm
1 in 9 Illinoisans is either paying into a public retirement fund or receiving benefits. About one in five households. No one, not even Bruce Rauner, believes those families have failed to make their payments into the system.
The Fair Tax would ask more of about 1 in 33 families, who have enjoyed one of the lowest income tax rates in the country for decades.
If the wealthy succeed in defeating the fair tax, the only option on the table will be raising taxes on the rich, poor and middle class alike.
You can believe if you like that the flat tax makes it harder to raise taxes. But ask yourself at what cost? We created this massive pension debt, shortchanged schools for two decades, allowed roads, hospitals and mental health clinics to fall into disrepair, became over-reliant on property taxes, made hosts of other shortsighted decisions rather than raise taxes back in 1994 to close the structural budget deficit. Would that we had, with a fair tax, and we’d doubtless be better off now.
Comment by Thomas Paine Monday, Sep 9, 19 @ 3:10 pm
Thomas Paine- if you really believe the 3 billion of added revenues that Pritzker’s “fair tax” will deliver solves the State’s fiscal issues- then you must also believe all the BS coming from President trump. The so called fair tax is just the first of several tax hits Pritzker will need and they won’t be limited to the top 3 percent
Comment by Sue Monday, Sep 9, 19 @ 3:42 pm
Sue says “if you really believe the 3 billion of added revenues that Pritzker’s “fair tax” will deliver solves the State’s fiscal issues- then you must also believe all the BS coming from President trump. The so called fair tax is just the first of several tax hits Pritzker will need and they won’t be limited to the top 3 percent”
With respect, if you are correct then what to do? Nothing? Raise the appropriate amount of revenue and fund our obligations in real time? Keep borrowing and pass the responsibility to pay onto future generations?
I vote the second choice.
Comment by don the legend Monday, Sep 9, 19 @ 4:03 pm
The most successful lawyers do extensive preparation before they go before a judge or jury and speak. Mayor Lightfoot has a reputation for being a successful lawyer, a litigator, at the highest level. Yet many of her public comments as Mayor have shown a disturbing lack of preparation.
Comment by James Monday, Sep 9, 19 @ 5:10 pm
Here comes the hard sell for yet another special deal for Chicago, and Lightfoot can’t make the sale. Trying to equate Chicago’s pension mess with the rest of the State fails on points mentioned by others–yet she keeps doing it. JB and Legislature so far ain’t biting on her hook. To parody a campaign ad, “Is She Thinking??”
Comment by revvedup Monday, Sep 9, 19 @ 5:29 pm
==The Fair Tax would ask more of about 1 in 33 families, who have enjoyed one of the lowest income tax rates in the country for decades.==
Our tax system is fair now. You make more, you pay more.
Comment by Token Conservative Monday, Sep 9, 19 @ 5:57 pm
==Our tax system is fair now. You make more, you pay more.==
You can call it graduated income tax if you like.
Comment by Da Big Bad Wolf Tuesday, Sep 10, 19 @ 9:39 am