Posted on 07/26/2015 8:40:19 AM PDT by Second Amendment First
More bad news for Chicago (and Illinois) taxpayers arrived Friday morning in a 35-page, double-sided packet. On one of the last pages: "The entire Act is void."
Cook County Circuit Court Judge Rita Novak tossed out Chicago's pension reform law. City Hall had negotiated the pension changes for municipal and labor employees with many of the city's unions on board. But Novak, using the Illinois Supreme Court's May pension opinion as her sword, ruled that the city's plan violates the Illinois Constitution: A public worker's pension is a contract that cannot be "diminished or impaired." lRelated Revenge of the pension loopholes
Yes, it's a Chicago-centric decision, but the implications menace governments statewide. Many of them promised too many retirement dollars to their employees. Now those governments are learning from judges that they'll have to impose draconian changes — higher taxes, fewer services, much more outsourcing, concentration on core responsibilities, or anything else they can do to slash costs. All because too many politicians gave away too much future tax revenue to too many workers — and then didn't properly fund their pension systems. Never forget that all of that foolish behavior was intentional.
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So, elected officials, show us the ugly. Show taxpayers what government in this state is going to look like. Packing 50 kids into each classroom? Outsourcing entire city departments? Demanding the necessary state permission to file for bankruptcy? Taxing residents to death so more move away? What?
Because it's clear there's nowhere near enough public money to meet all of these obligations.
Nor will there be enough money in countless tomorrows. State and local elected officials, many still in power, gave too much of it away.
(Excerpt) Read more at chicagotribune.com ...
Get ready to have all of that taxed and likely a source tax to hit Illinois municipal/state pensioners who’ve moved out of state.
That’s not a bad idea.
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.
This contract can be broken.
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.
The sad thing is, a republican governor signed the bill that made the pensions so high. It was Jim Edgar.
All the Illinois judges are pension beneficiaries. Of course they will uphold the pensions. They are not going to lose their incomes.
“These large benefits didn’t just happen. I think there are money trails showing government unions paid lots to grease wheels to grow their pay and power.
Would also like to see if the judge or his family are associated with other pension benefitting government jobs or payments.”
This is the ultimate end result of allowing Civil Servants to unionize.
Until that is outlawed it will continue to happen.
Well there needs to be the faor determnation that through campain contributions that politicians and boards unjustly enriched government workers with pay and benefits not found in the real world of the privat sector; therefore government employment promises and co tracts should ne null and void.
Fair determination
That is correct. Federal bankruptcy laws take precedence over the Illinois constitution. The pensions will go bankrupt and the federal courts will make the decisions.
Bankruptcy.
A fair determination? Here are the teacher pension highlights:
work 26 years never getting a promotion. And no fear of being fired after year 4.
Retire with thirty years credit. Get 3% raises in retirement every year. Get full health benefits. retire at 55. And pay no state taxes on pension. Average 55 year old teacher salary is $100,000 in Illinois. Pensions are 75% of last three years pay. Extra paying jobs like department heads and coaching go to teachers about to retire.
In many school systems like mine. A teacher can get 25% raise over last three years if they agree to retire. In other words, the schools want them out. There are hundreds of young teachers hungry for each available job. This may not make sense at first glance. But it does, because the state pays the pensions and the local boards of educations pay the salaries.
Amen, Bro.
With a few notable exceptions, the Trib pretty much sat on the sidelines while the Democrats ruined the state, at least until the stink of corruption got so bad (see for example Blagojevich) it was impossible to ignore.
I’ll never forgive them for giving us Axelrod, and further, destroying Ryan in the Senatorial election that put Obama on a trajectory to his present position.
Any idiot could have seen the Democrats were just buying teacher’s union and public “service” empolyee’s votes with their absurd contract and pension proposals, but the Trib failed miserably in their duty to adequately inform the public of long-term consequences of this folly.
One of the things I would like to see is states credit ratings go down farther. And also the towns and other taxing bodies. I would love to see some haircuts on the bonds. The reality is that bankers have become democrats over the past 50 years because municipal bonds are favorites of government unions. Unions and banks get together to create these double tax exempt bonds and sell them to bank clients.
I would like to see those clients lose a little money so they can see that muni’s have risk. And if they are priced properly, governments will not be so fast to borrow money.
I agree the decent people will suffer, but that’s inevitable now. Lots of decent people left Detroit.
Overpaid and benefitted, for a couple of elections they had a good billion for Democrats to raise their power, pay and benefits.
No unions in government attached employment.
I live in Illinois (at least for the next two years, then I'm outta here) and can tell you that you really don't have any idea how under-funded the state pensions are. A payment to the State Pension system hasn't been made in well over five years, probably closer to ten than five.
The state is just over $131 BILLION DOLLARS short in the pension system.
There's no way that money will ever be "found." They can tax every Illinois resident at 100% of income and they'll STILL not have anywhere near enough money to fund the system for as far as the eye can see.
Prediction: This state will declare bankruptcy at some point. It'll have to happen because there's no way out of this mess.
It's just a matter of time...
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