Government worker pensions pose threat
Winningreen Issue Alert
Government worker pensions pose a threat to America’s future
By Gretchen Randall
Date: August 5, 2013
Issue: When it comes to the crisis in state employee pensions, Illinois is the canary in the coal mine. It’s a powerful indicator of the fate that is rapidly approaching that state and that may await the rest of the country.
Illinois, the nation’s fifth most populous state and the home of President Obama, has the biggest unfunded liability of any state pension system in the country. Some 24 years ago, the shortfall was only $8.6 billion; 19 years ago, it was $17 billion. Now it’s $97 billion, growing by $17 million a day and consuming 22 percent of the state’s budget. That works out to an invisible burden of roughly $30,000 on a typical family of four in the state.
Since Illinois is ruled completely by Democrats, the problem of solving the state pension mess is increasingly difficult. While both the Illinois House and Senate have passed separate versions of bills that would somewhat alleviate the growth of the underfunded pensions, there is no agreement on a single solution that can pass both chambers. Hence, Governor Quinn, also a Democrat, has cajoled, threatened and now has withheld the August salaries of all legislators until a solution is found. Of course, the withholding of pay is now being challenged in court.
Mayor Rahm Emanuel is also pushing for pension reform because Chicago’s pension mess hinges on what the state decides. It may all come down to wait and watch to see what the Detroit bankruptcy judge decides because Illinois’ constitution holds pension benefits to be a contractual relationship which can not be diminished, similar to the wording of Michigan’s constitution.
To read our entire report, go to: https://capitalresearch-zippykid.netdna-ssl.com/wp-content/uploads/2013/07/LW1307-final-for-posting-130715.pdf
Excerpts from our report:
• Richard M. Daley (D), the longest-serving mayor of Chicago at 22 years in office, receives a pension from the city of more than $66,000 per year. His pension for serving just eight years in the Illinois Senate nets him an additional amount of almost $118, 000.
• As of 2012, more than a third of all retirees in the General Assembly Retirement System pension fund made more than they did when they were working. Ten percent were receiving more than $100,000 per year. The leading pensioner is former Gov. “Big Jim” Thompson (R), Illinois’ longest–serving governor at 24 years in office. He has received over $2 million dollars since retiring, aged 55.
Contact: Gretchen Randall