Crisis and Optimism in Rauner’s Second State of the State Address

By on January 27, 2016   /   Illinois, Items of Interest, Latest, Pension Reform, Taxpayer Alert  

View as PDF Chicago—Republican Gov. Bruce Rauner delivered his second State of the State address to the Illinois General Assembly today, beginning his second year as governor by outlining a number of ambitious priorities for his administration in the coming months. Jared Labell, director of operations for Taxpayers United of America (TUA), said that taxpayers should be pleased by a number of proposals in the speech, but uncertainty will remain until actual legislative action is taken.
“Taxpayers should applaud Gov. Rauner for recognizing that the state of Illinois simply cannot raise taxes to solve generations of governmental mismanagement,” said Labell. “State and local government reform in Illinois must be structural and address the systemic problems Illinoisans have dealt with for decades. Priorities must include, but are not limited to: term limits, redistricting reform, property tax relief, education reform, solving Illinois’ government pension crisis, consolidating taxing districts and government units, and enabling Illinois to be much more competitive in business to encourage economic growth.”
Gov. Rauner understands the struggle at hand, saying in his speech that, “Change is hard. Reform is difficult. But we can’t just raise taxes again. We know that doesn’t work. While the 2011 tax hike was in place, our credit rating was downgraded five times, we barely made a dent in our bill backlog, state support for schools was cut, our unfunded pension liabilities went up $28 billion, and our economic growth fell to almost half the national average. Raising taxes without improving our ability to compete will not help the people of Illinois, and in fact, it will make things worse.”
“Although Illinois is facing significant economic trouble and gridlock in government at all levels, taxpayers should be pleased to hear that Gov. Rauner and Senate President Cullerton (D) are currently working together with their respective staffs to introduce legislation addressing government pension reform, currently said to save taxpayers $1 billion annually,” said Labell.
“We will have to wait until this legislation is made public to know how substantive the reforms will be, as is the case with the other proposals outlined in today’s address, but this could be a sign that the state budget impasse – which is quickly approaching its eighth month – is closer to a resolution without hiking state income taxes or creating a new state income tax on retirement income. Illinois must become an economic phoenix to leave its financial catastrophes far behind, but that will require legislators to champion the struggles of taxpayers by allowing business to flourish and create more jobs to improve Illinois’ economy and the livelihood of its residents.”
Gov. Rauner will deliver his budget address to the Illinois General Assembly on February 17.
 

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Suburban Gov. Pensions Suck the Life Out of Taxpayers

By on January 26, 2016   /   Illinois, Latest, Pension Reform  

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CHICAGO—Taxpayers United of America (TUA) today released the results of their study of the government pensions for Villa Park, Lombard, Elmhurst, and Hillside municipal retirees, as well as local government schools.
“These suburban Chicago government retirees are really making out like bandits at the taxpayers’ expense,” said Jim Tobin, founder and president of TUA. “The per capita average income for these four municipalities is a modest $32,416. Eighty-five percent of the government pensioners in the Illinois Municipal Retirement Fund (IMRF), the individual police and fire pension funds, and the Teachers’ Retirement System (TRS) are getting pensions greater than the per capita average income of the constituents they are ‘serving.’ Seventy percent of the retirees in this group receive more than $50,000 per year and a stunning thirteen percent of this group collect pensions in excess of $100,000! This is retirement pay, not salaries. The pittance that these retirees paid toward their own retirement is a laughable 5.5%.”
“Taxpayers have far exceeded their fair share for these ridiculous pensions. Not only did we make our tax payments on time when the services were rendered, we are now expected to pay again because of reckless accounting by the fund managers and typical bureaucrat behavior of playing a shell game with taxpayer money. There is plenty of blame to go around and yet taxpayers are always the ones to bail out the government,” added Tobin.
“This government employee pension system is theft of taxpayer wealth in order to redistribute it to the government elite. The average Social Security ‘pension’ that taxpayers enjoyed was $16,080 in 2015. The maximum Social Security ‘pension’ is about $28,000 and you would have to have earned more than $100,000 a year to realize that amount.”
“For taxpayers to achieve the kind of affluent retirement that is forced out of our wallets into the wallets of this protected class, we would need about $1,000,000 in our retirement nest egg. TRS members, on average, contributed only $100,485!”
“But let’s not forget who started this Ponzi-scheme in the first place: Chicago Machine Boss Madigan has been the primary driver of the pension cabal in Illinois. The $111 billion pension shortfall is largely due to his cronyism with unions, as demonstrated by his decades-long support of the government pension system in which he was instrumental in codifying it into law,” said Tobin.
“The government pensions are unsustainable. Illinoisans are enduring cuts to services, the defunding of programs, and having their earnings confiscated. Tax dollars continue to be diverted from services required by today’s taxpayers into the pension funds for government employees, whose services were rendered long ago,” said Tobin.
“Local governments are continuously seeking to raise property taxes, sales taxes, and fees and licenses, but never tell taxpayers that nearly 80% of local taxes go to fund salaries and benefits of government employees.”
“Retired at the ripe old age of 58, Glen Ellyn CCSD 89 employee, Lawrence M. Baskin enjoys an annual taxpayer funded pension of $244,622. Over a normal lifetime, he will get about $7.3 million in pension payments. His personal investment in this rich payout is about 3.7% or $267,490 – barely more than his current annual pension.”
“Thomas P. Borchert retired from the Elmhurst municipal government with a current annual pension of $176,742. That will accumulate to about $4.4 million of redistributed taxpayer wealth. His personal contribution of only $169,127, or 4% of a stunning multi-million dollar retirement payout is less than his current annual pension!”
“Robert W. Niemann retired from the Villa Park municipal government with a generous annual pension of $127,016. Retiring at only 59, he will receive about $3.7 million in lifetime pension payments. His personal investment in his own retirement? About 3% or $115,713 – again, barely less than his current annual pension!”
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“The choice is clear: without sweeping, meaningful pension reform, taxpayers throughout Illinois will have to choose between fully funding the pension systems to pay for past services rendered, or pay for the services we need today,” concluded Tobin.
*Lifetime estimated pension payout includes 3% compounded COLA and assumes life expectancy of 85 (IRS Form 590).
Data Source: Freedom of Information Act requests to IMRF, TRS, and municipal police and fire pension funds.

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