Chicago Tribune|Taxpayers need way to claw back excessive state-funded pensions

Taxpayers United of America’s (TUA) data on the recent Teachers Retirement System pensions was cited by Chicago Tribune

It’s hard to tell how former Lincoln-Way High School District 210 Superintendent Lawrence Wyllie feels about his role as the newest poster boy for excessive state-funded pensions in Illinois.
Wyllie was a highly regarded educator when he retired in 2013, but he’s saying little publicly these days. As the district prepares to close one of its four high schools to narrow a budget deficit, Wyllie is mum about collecting the largest pension in the Teachers’ Retirement System.
His pension is $312,081 this year and will grow to $321,443 next year thanks to an automatic 3 percent annual cost of living increase. That’s a difficult figure to grasp, since the highest gross earnings of his career were “only” $276,307 during his final year of employment.
The formula used to calculate Wyllie’s overly generous pension has been phased out, but taxpayers are still on the hook for the guaranteed benefits.
As outrageous as Wyllie’s retirement pay is, it pales in comparison to others. TRS is one of five pension systems for public employees in Illinois. The state’s highest pension is paid through the State Universities Retirement System (SURS) to Tapas Das Gupta, former chair of surgical oncology at the University of Illinois at Chicago. His annual pension was $466,409 last year.
Coverage: Lincoln-Way School District 210
Coverage: Lincoln-Way School District 210
I think Gupta and other SURS pensioners pulling in shocking paydays are the reason Gov. Bruce Rauner is punishing college students by withholding state funding for higher education during the budget impasse.
Because SURS has bigger pensions, it’s no small feat that for the moment TRS is grabbing headlines for more egregious abuses of taxpayer money. Last week, Taxpayers United of America, one of many groups that has been analyzing Illinois’ pension crisis for years, released updated stats about TRS’ 114,434 pension beneficiaries.
Taxpayers United found that 8,507 TRS members collect pensions in excess of $100,000 a year, and that employees on average pay only 4.1 percent of their estimated lifetime pension payout into the system.
That means you, me and other state taxpayers pay 95.9 percent of pension benefits, on average.
I know numbers can make your head spin sometimes, so I’ll try to keep the math to a minimum. You’re outraged that a civil servant collects six figures a year in retirement, right? Public pensions should be capped at $100,000, watchdogs and ordinary Joes have been saying for years.
Ah, but the state Supreme Court has ruled that denying already earned benefits to pensioners would be unconstitutional. Our legislators can and should reform public pensions moving forward, but is there any way to spare honest taxpayers the burden of excessive benefits already granted to pensioners?
The answer is yes, by taxing retirement income.
This is not a new idea. Taxpayer watchdogs and economists who have studied Illinois’ budget problems have suggested this for years. Illinois is one of just 12 states that do not tax retirement income, the Civic Federation says. Among states that impose an income tax, we’re one of only three that exempt all pension income.
No one wants to punish the salt-of-the-earth teachers and municipal clerks who worked hard all their lives and paid into a system. They deserve a fair pension. Benefits for those folks and elderly collecting meager monthly Social Security payments can easily be preserved by exempting, say, the first $50,000 of annual retirement income.
For the record, Taxpayers United is against taxing retirement income. The group responded in January to an idea floated by Barbara Wheeler, a Republican state representative from Crystal Lake. Wheeler suggested taxing state pensions.
I like the idea. Even if Illinois were to tax retirement income a guy like Wyllie, who owns a residence in Florida, could simply declare residency in the Sunshine State and collect his full pension where retirement income is not taxed.
As much as I’d love for taxpayers to be able to claw back absurdly generous pensions, the state and U.S. constitutions have uniformity clauses that make it illegal to target one group for taxation, even if that group happens to consist solely of obscenely compensated public servants.
Taxpayers United says the solution is to repeal the 1970 Illinois Constitution clause that protects outrageous government pensions from reform. But the state’s powerful unions will block any effort to reform the state Constitution.
In 2012, House Speaker Michael Madigan backed an effort for a constitutional amendment that would have required a supermajority of state legislators to increase pension benefits. It passed unanimously in the House and received only two “no” votes in the Senate.
But a supermajority of voter approval was needed statewide, and in the face of union opposition only 56 percent of voters supported the measure. Consider that to be a test of the likelihood of amending the state Constitution to bring about reasonable pension reform.
As a state, we’ve made zero progress on pension reform, and here’s some math that explains why we’ll never achieve a balanced state budget without pension reform. According to the Illinois Policy Institute, “More than 25 percent of the state’s $32 billion budget … is being consumed by pension costs for downstate and suburban teachers, public-university and college workers, state employees, judges and state lawmakers.”
Illinois has the worst-funded pension systems in the nation, with a shortfall at $111 billion and counting. More than half the $4 billion in state higher-education appropriations go toward the pension and retirement costs of university and college workers, the Illinois Policy Institute says.
Most people concede that Illinois needs more revenue to solve its problems. But higher property taxes should be out of the question, and a higher tax rate on all income shouldn’t be the only solution. Solutions proposed by groups like the Center for Tax and Budget Accountability include a variety of personal, sales and corporate tax increases, as well as “including some retirement income in the personal income tax base.”
It’s not a perfect solution. I’d love to see pensions capped or the Constitution reformed. Local school boards must stop granting end-of-career salary bumps that boost pensions and end up costing all of us dearly.
But realistically, I think comprehensive budget reform for Illinois must include taxes on retirement income above a reasonable exemption limit. That way, at least, taxpayers will have a way to recapture some of the excessive pensions being paid to many public-sector employees.

Northwest Herald|Woodstock, Huntley expect to get home rule status after special censuses

President and founder of Taxpayers United of America (TUA), Jim Tobin, was quoted by Northwest Herald about home rule.

The number of home rule municipalities in McHenry County could grow after the city of Woodstock and village of Huntley get the results of their special censuses certified.
In Illinois, communities can become home rule by referendum, or automatically when reaching a population of 25,000. The designation gives local government more control over anything from taxing to licensing to regulating the protection of the public health, according to the Constitution of the State of Illinois.
There are more than 200 home rule municipalities in Illinois, according to the Illinois Municipal League.
Home rule municipalities in McHenry County include Lake in the Hills, McHenry, Crystal Lake, Prairie Grove and Algonquin, according to documents from the Illinois Secretary of State’s Office and the Illinois Municipal League.
While advocates say home rule gives more power to the people who know the community best, the thought of a local body having more options to raise taxes without a referendum worries some residents and taxpayer advocacy groups.
Woodstock City Manager Roscoe Stelford said the special census will give a more accurate reflection of the city’s population, and more revenue because the city receives $151 in shared state revenue per person for the city.
When the city does qualify for home rule status, benefits could include the city’s ability to license landlords and create ordinances to require crime-free housing standards, increase the fees to license video game machines and improve the city’s bond rating, he said.
“Our council members are constantly in the community, constantly getting feedback on what’s good and what’s bad, and I think having local control is not a bad thing,” Stelford said.
Woodstock City Council members have emphasized at council meetings the city’s history of keeping taxes low for residents by not taking the property tax extension limitation law, a limitation that would not apply if the city became home rule.
Information about the special census and home rule status posted on the city of Woodstock’s website references a 2011 policy profile on home rule in the U.S. from the Center for Governmental Studies at Northern Illinois University.
The study cited in the profile found that few communities across the U.S. use their home rule powers to increase property taxes or levy sales tax to the statutory limit for home rule cities.
The profile also said that, overall, the presence or absence of home rule had little effect on the government performance variables of most interest and concern to citizens.
Jim Tobin, president and founder of Taxpayers United of America, said the taxpayer advocacy group based out of Chicago is opposed to home rule in Illinois, because home rule status gives officials the power to raise taxes and avoid voter input.
“The people who like home rule are government employees, or people who plan to be government employees or get contracts with the city and profit off the taxpayers,” Tobin said.
He said that while residents can repeal home rule status, very few people have done it because it takes an “enormous amount of work and an enormous amount of money.”
City officials from both Woodstock and Huntley have said that if home rule status is reached, any discussions on what home rule powers the municipalities may take advantage of would be brought before the City Council or Village Board.
Huntley Village Manager Dave Johnson said in a statement the village has not yet discussed what home rule opportunities it might take advantage of, but, “Based on the continued unfortunate conditions surrounding the state of Illinois and the uncertainty created by these conditions, greater local control of the village’s future by the Village Board of Trustees is important.”
The city of McHenry conducted a special census in 2008, and it became a home rule municipality when that census was certified in 2010 with a population of 27,525, City Manager Derik Morefield said.
The only tax the city implemented after reaching home rule status was a 0.5 percent sales tax increase, from 7 percent to 7.5 percent, which went toward capital improvements and to help cover police pensions, Morefield said.
“My opinion is that the city of McHenry has been responsible in having their own home rule authority,” he said. “We haven’t certainly exercised it to the extent that we could.”
After being with the city for nearly four years, Morefield said discussions about adding more taxes or new ordinances with home rule powers do not come up with elected officials and staff.
Nadav Shoked, associate professor of law with Northwestern University, said becoming home rule is “not a complete revolution” for a municipality.
Shoked said it is important to note that even while under home rule, Illinois governments never have full autonomy from the state.
It’s tough to predict if taxes will go up when home rule status is reached, Shoked said, and whether people support home rule or not comes down to whether they trust their elected officials and neighbors who vote.
“These are debates between communities because people, for good reason or for no good reason, some people do not trust their elected officials,” Shoked said.

McHenry Times|The Chicago Tribune: 'Our nod goes to Skillicorn' in District 66

Tax Accountability, the Political Action arm of Taxpayers United of America (TUA), was featured in an article by McHenry Times for their endorsement of Allen Skillicorn.

The Chicago Tribune has endorsed East Dundee Village Trustee Allen Skillicorn in his run for the Republican nomination for state representative in District 66.
The soon-to-be-vacant seat now held by retiring Republican state Rep. Mike Tryon of Crystal Lake has four candidates vying in the GOP primary – Skillicorn, Lakewood Trustee Paul Serwatka, West Dundee Trustee Dan Wilbrandt and McHenry County Board Member Carolyn Schofield of Crystal Lake.
After weighing the admirable qualities in some of the Republican candidates, the Chicago Tribune settled on Skillicorn.
“But in this race, our nod goes to Skillicorn, a marketing professional who is the most outspoken about the need to blow up the status quo in Springfield,” the newspaper wrote. “Locally, he led the charge to freeze the property tax levy and has been a cheerleader of (Gov. Bruce) Rauner’s agenda. We’d like to see Skillicorn make his own mark. We’re confident he will. Skillicorn is endorsed.”
The newspaper noted that although Schofield has the most government experience, it found it disappointing that she voted against a bill that would have “allowed for more consolidation of county services, saving taxpayers’ money.”
The newspaper said Wilbrandt has proven to be an independent thinker who isn’t afraid to vote against the board majority in his village and added that he “has been tight with the purse strings.”
Last week, Skillicorn was endorsed by former state Sen. Chris Lauzen, who is the current Kane County Board chairman. Tax Accountability, the political action arm of Taxpayers United of America, has also endorsed Skillicorn, and a January Compass Consulting poll showed him leading the Republican race by 15 points.
He was elected East Dundee village trustee in 2011 and his effort to keep property taxes from rising ultimately dropped village property taxes per home.
Skillicorn grew up in Crystal Lake and Algonquin, and graduated from Dundee Crown High School. He resides in East Dundee with his family and is the marketing director for a local electronics manufacturer. Skillicorn currently serves as vice chair for the Kane County Republican Party, and believes in greater government accountability and lower taxes.