Illinois has written into their State Constitution that public pensions cannot be reduced or impaired. This was a conscious decision by the writers of the 1970 Constitution and has been very well known by lawmakers of both parties.
Illinois will go bankrupt very soon as their pension program is way, way underfunded.
I agree. Pensions are a contractual obligation. I hope Illinois raises taxes enough to fully fund these pensions. Maybe the Illinois socialists will learn when Chicago turns into Detroit. It’s a long shot but what else can be done?
Sue the Democrat Party.
They caused this and they have LOADS of money.
How about Warren Buffet’s solution: Any politician who votes for a budget that results in a 3% or greater deficit cannot run for reelection. I think this would be great at the State and Federal level.
I would, however, make it even more severe. I would add that, if a fiscal year ends with a deficit of more than 3% of the budgeted spending, those politicians who passed the budget cannot sit for reelection. That does away with the excuse that they didn’t “foresee” the deficit, they just made the wrong budget assumptions. This makes them responsible for accurate planning and projections, too.
Nor will there be enough money in countless tomorrows. State and local elected officials, many still in power, gave too much of it away.
The USA has two choices. Continue to print unbacked, Federal Reserve money, with fake interest rates and massive government debt - all to support the massive progressive state. Financial repression will soon need to kick into overdrive to pay it off, combined with much larger doses of inflation
Or, let common sense and free-markets eventually rule, where massive government debt and impossible-to-pay pensions and entitlements (including social security) go bankrupt.
The USA will choose the former, which will then require some kind of dictatorship to enforce it all.
Suddenly, a Constitution means something?
Illinois should secede from Chicago and C(r)ook County.
They can redirect the union dues of all public employees to the pension funds until they are fully funded.
This might get them through another election cycle or two, long enough for the current leadership to line their own pockets and retire elsewhere. But it's hard to see where Illinois goes after that.
Or the state could declare bankruptcy. The tricky part for the Illinois political establishment is how to ensure that all the bankruptcy writeoffs and writedowns are allocated to political enemies, not friends.
Uh, could they do what the private sector does when their pensions come up short like maybe cut back on benefits or something?
Nah, they can just go soak the taxpayers who can never retire some more.
As Detroit discovered, FEDERAL bankruptcy law supersedes anything written into a state constitution.
The reality is that the paper is on the side of the state workers unions. And they are trying to say that the politicians did not fund the pensions. But you can not fund $100 billion. And you could not fund it when it was $20 billion or $50 billion.
When the democrats controlled everything in Illinois for 12 years. And they did. They controlled both houses of the legislator, the city of Chicago, the governor, the President of the US, both houses of congress, and the Illinois supreme court. And they could do nothing. So they paid the workers and left the pensions to grow. But the Tribune spoke little about it. Only mentioning the growing debt from time to time.
The truth is, that the problem is just math. The pensions are way too rich. Most of the full pensioners are college degree’d white upper middle class people in their 60s or 70s getting over $100K pensions. And often its a second income.
The part nobody talks about, because nobody wants to, is that pensions in Illinois are tax free income. If they want to solve the problem they just need to tax all Illinois pensions over $50,000. That will get about 98% public workers and 2% private workers. Also, since the pensions were deferred income, earned in Illinois, they should be taxed in Illinois no matter where the people move.
That would get a lot of money back to the state. Remembering that most of these workers did not earn the pensions. They were gifted higher pensions when the pension formulas were made far more generous in the late 1990s. When the Tribune starts coming up with a solution and stops playing captain obvious by naming the problem, then I may read the paper again. But I am pretty sure there is no writer at the Tribune who has the math skills to understand the issues.
Bankruptcy.
Is reduced or impaired the same as shall not be infringed? If so, we have an interesting precedent here.