Tag Archives: Illinois pensions

Pritzker Administration sloughs off Illinois pension liabilities passing $500 billion mark, dissembles on pension crisis again, by Mark Glennon

Posted on November 22, 2021 | 2 comments

The taxpayers of Illinois are buried under the pensions that have been granted to public employees. From Mark Glennon at wirepoints.org:

There’s a lesson here not only about Illinois pensions but about how easily the press will let Gov. J.B. Pritzker thumb his nose at a crisis.

We reported Wednesday that the total unfunded liability for Illinois state and local pensions passed the $500 billion mark. That includes pensioner healthcare liabilities, which are constitutionally guarantied just like pensions. It is based on numbers from Moody’s Investor Services which uses assumptions comparable to those used in the private sector and are less optimistic than those the state uses. Read Wirepoints Special Report: Illinois pension shortfall surpasses $500 billion, average debt burden now $110,000 per household

Greg Hinz at Crain’s asked Gov. J.B. Pritzker’s office for a response.

“Pritzker’s office is pushing back on the notion that he’s done too little,” wrote Hinz. “Steps such as discounted buyouts of some pensions have ‘begun to bend the curve,’ with the percentage of total spending that goes to pension now flattening, a spokeswoman says in an email.”

Nonsense. Pritzker has done nothing significant whatsoever to fix pensions and it is particularly dishonest to cite pension buyouts as an example of progress.

Pritzker has long been boasting about pension buyouts but forever refuses to provide any support or analysis showing that buyouts would have any meaningful effect. We and others have written about it repeatedly.

  • In 2019 he told The Economic Club of Chicago that some study says buyouts will save “billions and billions,” perhaps $25 billion. But he has never produced that study or anything else to support the claim, and the state’s bond documents said something very different in the debt offering made just prior to that claim. Those documents said just 818 workers and retirees who are eligible for either of the state’s buyout programs had applied for one. That’s less than 2.3%, not 20% as Pritzker told the Economic Club. The documents further said, “The State is unable to quantify the amount or timing of any [reduction in pension liabilities] at this time.” In other words, Pritzker brags about savings to the public but the state says something different when the penalty would be securities fraud.

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Posted in Debt, Government, Law, Pensions, Taxes

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Janus v AFSCME and the truth about Illinois pensions in one graphic, by Ted Dabrowski and John Klingner

Posted on July 10, 2018 | 3 comments

Here’s the short answer to why Illinois is broke: promised pension benefits have skyrocketed and tax revenues and incomes have not. From Ted Dabrowski and John Klingner at wirepoints.com:

One graphic perfectly captures the absurdity of Illinois pensions over the past three decades.

It’s what Justice Samuel Alito described as Illinois’ “generous public-employee retirement packages” when writing for the majority in the Janus v. AFSCME decision. “Illinois’ pension funds are underfunded by $129 billion as a result of generous public-employee retirement packages” he wrote.

Alito didn’t use the graphic below, but he could have because it makes his point.

In 1987, pension promises made to active workers and retirees in the state’s five state-run pension plans totaled just $18 billion. By 2016, they had ballooned to $208 billion.

That’s a cumulative 1,067 percent increase.

Contrast that to the state’s budget (general fund revenues) which was up just 236 percent over the same time period. Or household incomes, which were up just 127 percent. Or inflation, up just 111 percent.

Promised pension benefits have blown past any ability of the state, the economy or taxpayers to pay for them.

Read the report: Illinois state pensions: Overpromised, not underfunded

Wirepoints released a report on these booming benefits earlier this year, and while it received strong coverage online nationally, Illinois’ traditional media didn’t want to touch it. The findings interfere with the narrative that’s repeatedly promoted by public sector unions and politicians – that the crisis is all the taxpayers’ fault for failing to put in enough money towards pensions.

The report proved a lack of dollars wasn’t the issue. Illinois pension assets – buoyed by taxpayer contributions – also grew far faster than the same economic indicators in the graphic above. But taxpayer contributions could never keep up with the state’s explosive growth in promised benefits.

Overpromising is the real culprit of the pension crisis. Freezing and reversing that growth in promised benefits is the fair, and only, way to fix things.

The above graphic gives taxpayers every right to demand concessions from their public servants. The Janus ruling will hopefully give them more power to demand them.

And union members have a strong incentive to come to the bargaining table. After all, it’s their retirements that are teetering on the edge of insolvency in a state just one notch from junk status.

But If the unions won’t deal, Illinois should go ahead and freeze salaries, cut the subjects of collective bargaining, move to defined contribution plans, reduce headcounts and work with the feds on a form of state bankruptcy. With the constitution currently preventing any changes to pension benefits, those are the only levers taxpayers have to save this state from collapse.

http://www.wirepoints.com/janus-v-afscme-and-the-truth-about-illinois-pensions-in-one-graphic-wirepoints-original/

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Posted in Collapse, Economy, Government, Pensions

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