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.
Cops get the lion's share of all pensions, followed by firemen and teachers. 99% of their working pay, at retirement, until death. For the private sector, they get nothing. And any mention of making their pensions more reasonable, and the city and county governments are threatened with a walkout in personnel, in a state with the highest murder rate in the USA. Cops have govt by the you know what. To keep cops happy, they promise and deliver whatever they demand, knowing what will happen if they don't. In mob circles, this is known as strong-arming. Cops call it "negotiation with a gun."
In fact, all states are under the same circumstances, and inability to pay, because of threats of harm if they do not. Threats that are very, very real, as some counties have found out - Dallas, TX - for example.
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.
Over-promising 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.
Read the report: Illinois state pensions: Overpromised, not underfunded
Please help if you can spare it.
Patreon: https://patreon.com/uwantson
PayPal: https://www.paypal.me/uwantsun
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.
Cops get the lion's share of all pensions, followed by firemen and teachers. 99% of their working pay, at retirement, until death. For the private sector, they get nothing. And any mention of making their pensions more reasonable, and the city and county governments are threatened with a walkout in personnel, in a state with the highest murder rate in the USA. Cops have govt by the you know what. To keep cops happy, they promise and deliver whatever they demand, knowing what will happen if they don't. In mob circles, this is known as strong-arming. Cops call it "negotiation with a gun."
In fact, all states are under the same circumstances, and inability to pay, because of threats of harm if they do not. Threats that are very, very real, as some counties have found out - Dallas, TX - for example.
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.
Over-promising 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.
Read the report: Illinois state pensions: Overpromised, not underfunded
Please help if you can spare it.
Patreon: https://patreon.com/uwantson
PayPal: https://www.paypal.me/uwantsun
