The Truth About Illinois Pensions In One Stunning Chart

Authored by Ted Dabrowski and John Klingner via 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. Alito didn’t use this graphic 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.

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 salariescut 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.

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

Comments

are we there yet powow Mon, 07/09/2018 - 22:32 Permalink

If Illinois defaults on its debts, as in wrote bad checks, can we put all present and past politicians, and union leaders and their lawyers who incurred the debt into a work prison to work off the debt? That would work for me.

In reply to by powow

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In reply to by are we there yet

Slimedon1 directaction Tue, 07/10/2018 - 09:39 Permalink

I only know about the Carpenters union in that I was a union carpenter in Chicago and our pension fund is fine. I get quarterly statements and it's doing great. Public unions are in no way comparable to something like the trade unions, totally different entities. It's like comparing cricket and nascar and saying well they are both sports, totally different.

In reply to by directaction

Arrow4Truth Delving Eye Mon, 07/09/2018 - 22:20 Permalink

"With the constitution currently preventing any changes to pension benefits..."

Are they saying that pension benefits were addressed in the state constitution? Get the fuck out. Are they claiming that statutes are addendum to the the constitution? Wrong. Statute is private law... policy. That's it. Nothing more. The state constitution is what was originally written. Statute does not change it. Best I can recall, any change to the constitution must be addressed as an amendment, a statute does not do that. Correct me if I'm in left field. Doesn't matter to me really as I bailed almost 10 years ago but it bothers me to see such unadulterated bullshit.

In reply to by Delving Eye

jin187 Arrow4Truth Tue, 07/10/2018 - 03:19 Permalink

The unions got to the politicians back when the growth track we were on made it seem plausible that these pensions could be paid forever.  Even many red states have this shit in their state constitution.  It's sickening, I know.  It's only due to the fact that the those red states have far less government employees, that they aren't in the same boat as the commie cesspools.

In reply to by Arrow4Truth

Kickaha Arrow4Truth Tue, 07/10/2018 - 04:25 Permalink

Art. 13, Sec 5.

 

"SECTION 5. PENSION AND RETIREMENT RIGHTS Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."

Any statute which seeks to lower promised pension benefits is unconstitutional.  I think this particular clause was redundant, as the Illinois Constitution already contains a standard clause prohibiting impairment of contracts.

 

In reply to by Arrow4Truth

Withdrawn Sanction Kickaha Tue, 07/10/2018 - 06:58 Permalink

Thanks for the citation.  Unfortunately for public pensioners in Illinois, contracts (even constitutionally supported ones) hold... until they dont. 

For proof at the national level, see the Gold Clause cases in the 1930s.  WW-I Liberty Bond contracts had an explicitly defined repayment process defined in gold dollars.  Plus the Constitution has a specific clause forbidding the impairment of contracts.  Nevertheless, and despite finding the favor of the plaintiffs, the Supreme Court said there was no available remedy since we'd left the gold standard (clever).  So what looked iron-clad (or gold protected), wasn't.

Bottom line:  in Illinois, they'll find a similar way out, or the citizens of the state will.  Either way, those self-serving "obligations" imposed by public servants on taxpayers will NOT be honored.

In reply to by Kickaha

glenlloyd fulliautomatix Tue, 07/10/2018 - 00:12 Permalink

Exactly

There was no one at the table during the 'negotiations' to defend the tax payers and balance the pensions, so the employees got everything they wanted without having to contribute a dime.

What happened in Wisconsin will happen in Illinois, it will have to happen. Either employees take pennies on the dollar for what they are due now AND start kicking in a respectable share toward their own retirement or they will in the end have nothing.

You cannot get blood from a turnip, and by the time some of these yahoos start to draw their pensions the last person in IL just might be crossing the border out of town.

IL ability to service these pensions is directly tied to their ability to tax and once the outflow of people starts in earnest due to the tax burden you can just kiss it all good bye.

Again there was no one reasonable at the table when these pension benefits were setup, if I were resident of IL I would claim the debt to fund them is illegal as it was not consented to by the populace specifically.

In reply to by fulliautomatix

STP glenlloyd Tue, 07/10/2018 - 10:48 Permalink

"There was no one at the table during the 'negotiations' to defend the tax payers..."

That's the amazing part!  You had the Unions on one side of the table and the Government on the other side.  It wasn't the Government's money, it wasn't the Union's money, it was the TAXPAYER'S money!

I'm in California (unfortunately) and the SEIU and the Teacher's Unions have the Politicians, by the balls, because they're major contributors to their campaigns.  Your last sentence was spot on!

"...if I were resident of IL I would claim the debt to fund them is illegal as it was not consented to by the populace specifically."

 

In reply to by glenlloyd

Singelguy Delving Eye Tue, 07/10/2018 - 05:41 Permalink

It will get interesting as taxes go up, more people flee the state, resulting in less tax revenue, and the pension pots run empty and then no one gets a check. What are the courts going to do then? Fine the bankrupt state government? Where will the money come from to pay the fines? What do the liberals do then? Organize a mass suicide?

In reply to by Delving Eye

chubbar Singelguy Tue, 07/10/2018 - 11:38 Permalink

It's a self re-enforcing circle of doom. Raise taxes, property values go down as people move. Property values go down, less property taxes collected from current mill rate. Raise property taxes via higher mill rate, property values go down further as housing budgets are pinched and less house can be afforded. Rinse, repeat.

The fucking retards in state/town gov't either don't get it or don't care as they figure they'll skip town with their goodies prior to the collapse. However, we are now on the cusp of the collapse and some of these retards aren't going to make it out of town soon enough. Their retirements will also be impaired with whatever is coming plus they are going to take the blame for this massive fuckup. Just a matter of time now.

In reply to by Singelguy

Zip_the_Zap Singelguy Tue, 07/10/2018 - 12:36 Permalink

Singleguy, I agree with your sentiment. Unfortunately, and look a St. Louis as an example, the courts will simply order a tax increase. So, the producers will leave, the incompetent will stay, and the remaining peasants will pay the tax increase and rationalize doing so because they are already conditioned to being victimized. The post WWII American economic "miracle" ended with Nixon. Has been perpetuated ever since through financialization and massive debt. It is coming to an end, so to para-phrase a movie line: "I see poor debt slaves, but they do not know they are poor debt slaves."  

In reply to by Singelguy

glenlloyd TBT or not TBT Tue, 07/10/2018 - 00:20 Permalink

That's an awesome idea and by extension any municipality that claims bankruptcy should revert to an unincorporated town / village. That way the existing government cannot continue to 'rule the roost' as though they did nothing wrong.

Muni's are granted the ability to govern by the governed, but that should be withdrawn in cases where the muni contributes to a bankruptcy or in cases where the muni (city) gets its ass in a bind with law suits etc.

The power needs to be returned to the people in instances where the state / city gets out of control.

In reply to by TBT or not TBT

duelingforks glenlloyd Tue, 07/10/2018 - 05:51 Permalink

Municipalities are creatures of legislation and are quasi political corporations. This means that municipalities are outside the constitution/s, as they were created by legitimate constitutional authority.

Since municipalities are extra-constitutional their existence depends on legislation, not the constitution.

https://fas.org/sgp/crs/misc/RL30533.pdf

 

www​.bu.edu/bulawreview/.../SHOKED.p...

 

AT PAGE 279: https//books.google.com/books?id=PkczAAAAIAAJ&pg=PA279&lpg=PA279&dq=quasi+political+corporations&source=bl&ots=U38A075kzP&sig=dYpKxFrljID2meoI6fJf6WSzj0Y&hl=en&sa=X&ved=0ahUKEwjvsI-go5TcAhWM5IMKHf1-CZ4Q6AEIJjAL#v=onepage&q=quasi%20political%20corporations&f=false

 

 

 

In reply to by glenlloyd