Illinois' HB6258 is a Quacker – Lame Pension Reform for Lame Ducks

By on December 12, 2012   /   Illinois, Latest, News Releases  

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CHICAGO–The proposed reform of the Ill. government employee pension system, HB6258 is described by some Springfield politicians as “bold,” but is actually lame and largely ineffectual, according to Jim Tobin, President of Taxpayers United of America (TUA).
“The so-called pension reform bill proposed by St. Rep. Elaine Nektriz (D-Northbrook) and St. Rep. Chris Nybo (R-Elmhurst), will not ‘solve’ the problems that will make this government pension system collapse,” said Tobin. “The system is so far in the hole that it is self-destructing and a radical overhaul of the system is absolutely necessary.”
“Shifting the cost of government pensions to local governments, as this bill proposes, would cause havoc for homeowners. The local governments would be forced to sharply increase property taxes. Remember the old-and-true saying: A tax shift is a tax shaft.”
“The current 3% cost of living adjustment (COLA) is compounded which means the annual pension benefits double every 24 years. The ‘golden years’ truly are golden for government retirees make far more than they did when they were actually working. Without eliminating the COLA, we haven’t solved the problem of the ever-increasing pension liabilities. A Harvard study found that the elimination of a 3% COLA eliminates 25% of a pension fund liability.”
“By 2014, because of new accounting standards, the state must reform its method for calculating the value of the pension system’s assets using a 5% return on its pension investments, down from the totally unrealistic current rate of 8%. Any so-called reform that does not calculate the true pension liability using a 5% return estimate is not reform; it is just another political can-kicking exercise. If they miss this mark, the bond market will cut the state off, and Illinois won’t be able to borrow any money at reasonable rates.”
Tobin proposed the following, drastic but necessary, reforms:

  • Totally eliminate cost-of-living increases (COLA).
  • Contributions to the government teacher pension plans should be increased from 8% to 14%, as they currently are in Ohio, with comparable increases for other government employees.
  • Both retirees and current government employees should pay half of their health-care contributions. This would save $230 billion over the next 35 years, a savings of $6.6 billion annually.
  • The retirement age should be raised to 67 for full pension benefits.
  • In order to permanently eliminate unfunded pension liabilities, we must replace the defined benefit system with a defined contribution system.

“Without these truly ‘bold’ reforms, the Illinois government pension plans will collapse,” said Tobin.

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Good Taxpayer News from the West Coast

By on December 11, 2012   /   California, Latest, News Releases  

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California taxpayers are fighting the good fight, holding their own, and have achieved victories that are not reflected in the negative press the state has been getting recently.
The Golden State’s taxpayers are represented by the Howard Jarvis Taxpayers Association (HJTA), which was formed initially to protect Proposition 13, passed on June 6, 1978. Prop 13 cut the property taxes of every California property owner by 60% and requires a 2/3 supermajority to raise taxes.
Thanks to Prop 13, the assessment rate is now only one percent for all California property and annual tax increases are limited to no more than two percent. When property is sold it is then reassessed at market value, but the rate remains at one percent and the new owner is then protected by the two percent cap on annual increases.
According to the HJTA website, by working through the Legislature, courts, and ballot initiatives, the Association has saved Californians billions of dollars. Estimates are that Prop 13 has saved California taxpayers over $528 billion dollars. And when you add in all of the other HJTA victories, the average California family of four has saved more than $57,000 as a direct result of the activities of Howard Jarvis and the Howard Jarvis Taxpayers Association.
Some recent victories include:

  • Successfully campaigned against Proposition 180, which would have cost taxpayers $3.5 billion to purchase land for special interests.
  • Sponsored and passed Proposition 218 — the Right to Vote On Taxes Act — to restore and expand taxpayer protections provided by Proposition 13.
  • Went to court and successfully blocked an illegal $1.9 billion bond that the state was attempting to issue to cover its expenses. The taxpayers would have been obligated to repay principal and interest.
  • Led the fight that defeated the powerful public employee union campaign behind Prop. 56 — a direct attack on Proposition 13, which would have made it way too easy to increase taxes.
  • Led the successful campaign that defeated Prop. 88, which would have imposed a new state tax on all California property owners.

Recent lawsuits by HJTA have saved taxpayers nearly $4 billion. HJTA maintains a full-time presence in Sacramento to lobby against bills that are bad for taxpayers and to promote those that improve taxpayer protections.
Further information may be obtained from the HJTA website: http://www.hjta.org/

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Wilmette School District 39 Continues to Mislead Public, Cover Up Illegal Ballot Language

By on December 6, 2012   /   Illinois, Items of Interest, Latest, Lawsuits, News Advisory, Oak Park-Wilmette  

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WILMETTE, IL – Despite a recent change to the property tax code that clarifies how property tax increases are calculated, Wilmette School District 39 is choosing to continue its campaign to mislead residents over the illegal ballot language they used in a recent referendum that underestimated tax increases by more than a factor of 3.
Monday, District 39 issued a media release that mischaracterized the effect of Public Act 97-1087, which modified the Illinois Property Tax Code to explicitly include the effect of the State Equalization Factor, by saying that it “…reinforced that the District’s ballot language correctly followed Illinois law as it existed at that time.”
Nothing could be further from the truth. In fact, the Act itself refers to its purpose as “clarification” of the very same language that Sorock’s lawsuit challenged, and insists, as did Sorock, that the State Equalization Factor must be used for tax increase calculations.
Sorock, along with Taxpayers United of America (TUA), had sued the District to reverse tax increases that were a result of illegal ballot language in an April 2011 referendum election.
“The District has all along defended its ballot language by asserting that the State Equalization Factor was not to be used,” said Sorock. “Now we have clear-as-day proof that the state legislature agrees with our position, but the District is choosing once again to cover up its miscalculation.”
While TUA recently filed a motion to voluntarily dismiss the lawsuit given the reluctance of the courts to enforce clear requirements of Illinois law, Sorock is heartened by Public Act 97-1087’s clarification.
“Rather than vindication for the District, the changes made by Public Act 97-1087 demonstrate that TUA and I were absolutely correct in challenging the referendum ballot for its failure to conform to requirements of Illinois law. TUA and I knew the District’s ballot language was illegal eighteen months ago; that the District still claims otherwise defies common sense and strains credulity.”
For more information, please contact h.sorock@gmail.com.

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