Posted on 05/08/2015 7:36:14 PM PDT by TurboZamboni
The Illinois Supreme Court struck down the state’s 2013 pension overhaul, unraveling an effort by lawmakers to rein in benefits for the consistently underfunded public-sector system. The current pension shortfall is estimated at $111 billion, one of the largest nationally. The high court affirmed a decision in November by a state circuit court that the legislative changes violated pension protections written into the state constitution. The decision is a victory for a consortium of public-sector unions while creating a huge challenge for new Republican Gov. Bruce Rauner, who already faces a yawning budget deficit for the coming fiscal year.
(Excerpt) Read more at wsj.com ...
Social Security could have been saved at any time in the past twenty years by tiny incremental changes to benefit rates of increase, retirement ages, or withholding rates. Even today, Social Security could be saved by fairly painless changes to benefits, retirement ages, or withholding rates.
The problem is, whenever anyone suggests these changes, politicians (mostly on the left) lie and say no changes are needed. And our media, who knows full well that changes are needed, supports them fully in their lies. So around 2030, social security will run out of money and the changes forced on people then will be enormously painful.
It is not a matter of feeling sorry for the states. The courts have handcuffed the current state government from addressing the problem reasonably. Where is the money going to come from? Current taxpayers and perhaps a federal bailout. The states should be allowed to reduce benefits just as was the case in Detroit.
The states should be allowed to reduce benefits just as was the case in Detroit.
I don’t agree with that. It is a contract between the worker and the state. Sorry but the worker after doing the work should not be penalized. When I redid my kitchen and it was 28 grand....should I have said, psych I am only paying you 15K? Same thing.
The Statmof Indiana went bankrupt in the 1840s, having sunk its fiscal future in canals jsut when the railroad came along. The State got a new Constitution as a result, which prohibited public indebtedness. They ‘ve probably changed the bankruptcy laws since then.
If Social Security was honest...
The benefit schedule, ages and all, should be effective for and from the very first deduction taken from a citizens paycheck.
Example:
Born in ‘55
First paycheck ‘71 (age 16)
Age 63 in 3 years.
Definitions for early redemption, ages, et al, should be whatever was on the books in 1971.
First deduction was the beginning of a contract with the U.S. govt and this citizen.
Congress should not be able to change the game every ten years or as they see fit. Contract setting ages was made in ‘71.
State Bankruptcy: An Idea That’s Ready for Primetime?
Changing federal bankruptcy law to allow individual states to file is an idea that appears to be gathering momentum—and opposition.
Under current US bankruptcy laws, the states are prevented from filing for bankruptcy—as municipalities now are permitted to do in about half the states. But the rhetoric is heating up, according to an article in the LA Times, in the weeks since my colleague Nicole Lapin reported on the topic.
On the one hand, many of those who support changing the law say they are just being realistic about the precarious finances of the states. Those who support the idea say that deficit-ridden states simply cannot afford to support the unfunded pension and health-care liabilities with the state public employees’ unions. And, moreover, unions have very little incentive to enter into serious negotiation with the states in order to solve problems together.
Of course, there are those who see more nefarious motives.
For one, some believe state bankruptcy is merely a stalking horse to break the back of the public employees unions.
For example: “ Chuck Loveless, director of legislation for the American Federation of State, County and Municipal Employees, says the groups agitating for the state bankruptcy option are doing so ‘for the express purpose of reneging on collective-bargaining agreements’. ‘We take this very seriously,’ he said. ‘They’re trying to create this hysterical atmosphere.’”
http://www.cnbc.com/id/41140013
AFSCME Chuck should change his name to Chuck Clueless.
They can do that by removing all pension plans for all public officials and public employees. The Courts could not toss that out on Constitutionality grounds for discrimination, furthermore it would illustrate how unreasonable the courts are — at that point, put it into the Constitution.
If the courts insist that the pension is a right, dissolve the court and prosecute for conspiracy against rights as the IL Constitution clearly says:
ARTICLE I, SECTION 16. EX POST FACTO LAWS AND IMPAIRING CONTRACTSAnd to claim that these pensions cannot be ended by amending the State Constitution is to assert that there is an irrevocable special privilege to pensions.
No ex post facto law, or law impairing the obligation of contracts or making an irrevocable grant of special privileges or immunities, shall be passed.
SS has been running in the red since 2010, i.e., benefits paid out exceed revenue. SS is a pay as you go program with today's workers paying for today's retirees. The SSTF contains non-market T-bills that are used to make up the shortfall. The T-bills must be cashed in by the General Fund, which borrows about 40% of its expenditures.
The problem with SS is that we have fewer workers to support the system. In 1950 there were 16 workers for every retiree; today it is 3; and by 2030 it will be two. Changes can and have been made to reduce benefits and increase taxes. But you reach a point where the political will to make needed changes is lacking. When SS runs out of T-bills (IOUs) in 2033 or 2034, the revenue collected will still be able to pay about 80% of benefits.
The SSTF is included in the $18 trillion national debt and held as "Intragovernmental Holdings." It is an unfunded liability.
SS can be made solvent with some pain, but Medicare is a far greater challenge.
“At this point, what difference does it make?” The state is hopelessly broke anyway...just like so many others/\.
if you think these democrat states aren’t going to engineer a federal bailout, you are badly mistaken.
the democrats in DC will see to it that ALL US citizens end up paying the retirement benefits and pensions in failed democrat states like IL and CA and NY.
A very bad idea, I think… it could (and likely will) be used to completely destroy what sovereignty the States have left.
Well what states need to start doing is change the way they run government agencies. For one thing, the DMV can be put right out of business. They could easily do everything on line even with an eye exam. Of course the driving test would have to be taken so instead of 20 DMV workers they could have 3 for test takers only. The environmental agencies are the most ridiculous. I went into the Department of National Resources in Maryland one time and the building had hundreds of people working there....for what? Oh to bother land owners who happen to have waterways on their land and to ensure that bunting and other nonsense are up so that the streams don’t have any run off going into the stream and whatnot. Why on Earth are historical places and natural landmarks run by government? They should be run by civilian people. So many government agencies could be dumped or reorganized to make smaller instead of going after those that already fulfilled their obligations.
(That should start a war of all the non-bailout states against DC.)
It would be nice if it was only a few Democratic states. Republicans states are in trouble too including Kansas. Well hopefully it works out....actually it will because there really isn’t any choice. I have a feeling if Hillary gets into office the 1 percenters will actually have to start paying taxes which will make them leave the country. Places like Walmart and others will have to start paying taxes but they will leave the country too. Who knows what will happen.
The Governors of Michigan did the same thing going back to Blanchard. They also gave out and extra check #13 back in the 90s to then current retirees when the market was good, instead of sticking it away for the future. Engler was worse, he under funded the pension the most I think. (Care to guess who receives the largest check every month now out of this system? Hint- John Engler, No.2 on the list is his Luietenant Gov.) Then Grandholm decided to give out 10 year tax credits to Businesses that are costing the State Millions every year.
Snyder and Company
Revamped the pension system to defined contribution versus the older defined Benefit plans. Added mandatory employee contributions to stay in old system, added a tax for retiree health care and mandated a 80/20 enployee co-pay for Healthcare coverage. They are working toward a 401k plan. Most likely push that next year.
They also blew thru the tobacco money like blueberries through a goose.
To make matters worse Snyder et.al signed us up for the NeroCare expanded medicare scam.
Pretty much sewing us all for hundreds of millions of dollars when the ship hits the iceburg.
.
No money was stolen. You don't understand how SS works. The reason SS is in "bad shape" is that it is a Ponzi scheme. There are actuarial reasons why SS is running in the red.
Raise the cap a bit.
The cap is raised almost every year. Today it is $118,500. In 2000 it was $76,200. In 1990 it was $51,300.
Wrong. What you're implying is that the state should have shaken down the burdened taxpayers even more than they did.
States made promises they could not, in a million years, possibly keep. Politicians bought votes with their recklessness and public sector employees made a pact with that devil.
Those public sector workers should have saved for their own retirement like the rest of us do. A state worker can retire after 25-30 years with a hefty pension. If they're 50-55 years old and live until they are 75-80, they are drawing decent pensions and benefits for 25-30 years - as many years as they actually worked!
Meanwhile, taxpayers in private jobs have to work until they are 65-70 years and they are whacked heavily in taxes in part to pay for the public sector employees who are living a life of leisure.
Everybody needs to have skin in this game, not just the already heavily burdened taxpayer.
Apples and oranges. You are asking the states to commit fiscal suicide so they can pay full pensions to government employees. Would you recommend the same solution for the federal government?
How many people will be affected by cuts in state services in order to pay pension benefits, including the pensioners themselves who could move out of the state? The courts should not be involved in these cases. States should have the same flexibility as the cities in how they address these problems.
Well, yeah, except for "back" read "stranglehold". ... and I think a "stalking horse" is something else.
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