Category: Public Pensions

Retirement perks doomed Illinois pension system

Posted by dcrim – May 31, 2012

The Moline Dispatch offers a glimpse at a major reason why Illinois is in such a pension mess. The newspaper reports that in 1989, then-state Sen. Calvin Schuneman, R-Prophetstown, predicted trouble for the pension system as legislators passed perk after perk to make their retirements more rewarding. One of the major perks he opposed was a cost-of-living increase, which went from 3 percent annually to retirees using a simple interest formula to a 3 percent annual COLA using compound interest. Read the story here.

The Dispatch offers this sample of cash benefits for some Illinois pension recipients:

• Former Gov. Jim Edgar: $134,853 annually; $1.252 million total to date. His total contributions: $164,657.

• Former Gov. James Thompson: $131,031 annually; $2.023 million total to date. His total contributions: $84,966.

• Former Attorney General Roland Burris: $129,162 annually; $1.743 million total to date. His total contributions: $134,680.

Rich Miller of Capitol Fax noted, perhaps with tongue firmly planted in cheek, that the system may have caught a break with its previous two governors, George Ryan and Rod Blagojevich, now in prison and ineligible to receive their pensions.

How to cash in big time on Illinois’ pension system

Posted by dcrim – October 26, 2011

In case you’re wondering how screwed up the pension system rules are in Illinois, a Chicago Tribune/WGN-TV investigation has revealed that two lobbyists with no prior teaching experience were allowed to count their years as union employees toward a state teacher pension once they served a single day of subbing in 2007. One will receive an annual pension double what the average teacher gets — all for for getting paid $93 for one day of subbing. Click here for the sordid details.

California city’s response to pension costs: Mass layoff notices

Posted by dcrim – March 20, 2011

Nearly half the city workers in Costa Mesa — a California city of 116,000 — received layoff notices last week. City leaders say the cutbacks are necessary because the escalating costs of providing pensions for police, firefighters and other unionized employees are draining the city’s revenue. Within three years, city projections show, more than one of every five tax dollars will be spent on employees’ retirement benefits.

Click here for the story.

Here is another example we brought you in December.

Political mantra: Never let facts get in the way of a good story

Posted by dcrim – March 4, 2011

It seems being loose with the truth is becoming contagious. In its never-ending quest to separate fact from fiction, Politifact offers these nuggets:

• Former Arkansas Gov. Mike Huckabee, now a commentator on Fox News and a potential Republican presidential candidate for 2012, said earlier this week while hawking his new book that President Barack Obama grew up in Kenya. Check the facts here.

• Wisconsin Gov. Scott Walker, locked in a budget battle with unions and Democratic senators, said the state is broke. Check the facts here.

• Fox News commentator Glenn Beck, no stranger to wild and unsubstantiated comments, said Michelle Obama has 43 people on her staff, compared to just three for Nancy Reagan. Check the facts here.

Fact-checking the prank call and other Wisconsin claims

Posted by dcrim – February 26, 2011

It seems both sides of the Wisconsin budget debate are being a little loose with the truth. Check the validity of some claims here.

How will plan to address financial crisis by raising taxes play out?

Posted by dcrim – January 8, 2011

Democratic leaders in the Illinois General Assembly have reached an agreement on a tax hike that, coupled with a limit on spending and a moratorium on new programs, is projected will pay past due bills, fund the state’s pension obligation and begin to address a budget deficit expected to reach $15 billion by this spring.

With only three more days remaining before a new General Assembly is sworn in — one with a combined eight fewer Democrats — there is no telling whether the proposals first floated last week will receive the necessary votes for passage. And there seems to be no inclination so far to further curtail future pension costs by reducing benefits for current employees, a tactic that other states have embraced.

The Washington Post notes how the $6.8 billion in unpaid bills is affecting social service agencies:

The late payments have left the state’s social service network in chaos. A recent survey of 282 social work agencies by Illinois Partners for Human Service, an advocacy group, found that 95 percent of them have been hurt by the budget crisis. More than half were forced to reduce service; 28 percent closed programs; half laid off staff members; and 49 percent were forced to tap lines of credit.

Investors Business Daily isn’t enamored with the tax hike idea:

Americans for Tax Reform compared the states gaining and losing congressional seats and found that “states gaining seats had significantly lower taxes, less government spending and were more likely to have ‘Right to Work’ laws in place.”

ATR found the average personal income-tax rate in states losing seats was a high 6.05%. That average rate in states gaining seats was a more modest 2.8%. Per capita government spending is also lower: $4,008 for states gaining congressional seats vs. $5,117 for those that aren’t. …

A report by the Pew Center on the States highlights another Illinois problem, one it shares with other states — unfunded pension obligations. As government has grown apace, so has its work force and the promises made to employees that double as a patronage army come election time.

Click here to see how Illinois tax rates would compare with other states.

Posted by dcrim – January 1, 2011

The pension problem: The day the checks quit coming

Posted by dcrim – December 24, 2010

Many cities and states are struggling to keep their pension plans adequately funded. Click here to see what happens when a city’s pension fund runs dry.

On doctor discipline, the week that was and bloated public pensions

Posted by dcrim – December 12, 2010

The St. Louis Post-Dispatch reveals how often leniency and secrecy shroud doctor discipline with some harrowing examples.

Ezra Klein of Newsweek tries to shine some light on the strange week that was in Washington.

Out-of-control public pensions aren’t just a problem in Illinois. The state of New York, and New York City, are drowning in red ink because pension obligations are rising so fast. The city’s fire department spends more on pensions and benefits than it does salaries. The New York Daily News offers a solution.

The Rothenberg Political Report offers is 2010 awards.

Obama will need some luck to restore winning coalition

Posted by dcrim – December 6, 2010

Mark Halperin, writing in Time magazine, believes President Barack Obama will need some luck to win back the core groups that helped elect him in 2008. That usually translates into an “event.” For Bill Clinton, it was the Oklahoma City bombing. For Geroge W. Bush, it was 9/11.

The coalition that got Barack Obama elected President just two years ago has been shattered. Gaming out the trajectory of the next two years can be done any number of ways, but Obama’s efforts to rebuild a politically robust alliance will be the most telling. It may be the biggest challenge of his career — and he will need happenstance along with skill if he is going to get it done.

The New York Times reports that the mounting debt facing states like Illinois, which is still paying off billions in bills that it got from schools and social service providers last year, is stoking fears of a future financial crisis.

While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear, because many state and local governments have so much debt — several trillion dollars’ worth, with much of it off the books and largely hidden from view — that it could overwhelm them in the next few years.

With WikiLeakls next release apparently targeting Bank of America, traders fear a subprime lending scandal will be exposed. Charlie Gasparino talks with someone who has read the leaked files and offers his assessment for The Daily Beast.