Tazewell Taxpayers Trounced by Government Pensions

By on October 25, 2016   /   Illinois, Latest, Pension Reform  

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East Peoria, IL – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Tazewell County government retirees, as well as Pekin municipal, Tazewell County and Tazewell County government schools, Illinois Central College, and Pekin police and fire retirees.
“There are more than 30 government teachers in Tazewell County collecting annual pensions in excess of $100,000. These lavish, gold-plated pensions all accumulate to $1 million to $5.2 million over a normal lifetime. These pensions are so rich for a number of reasons: 3% compounded cost of living increases, regardless of economic conditions, receiving full retirement benefits as early as 55 years old, taxpayer contributions that exceed teacher contributions by nearly four times,” said Jim Tobin, President of Taxpayers United of America (TUA).
Across the five state pension funds and the Illinois Municipal Retirement Fund (IMRF), there are more than 15,661 government pensioners collecting six-figure annual pensions and more than 92,386 retirees collecting over $50,000 annually and those pensions increase by 3% compounded every year for each of the pension funds, except IMRF. After about 20 years, the pension doubles, so government retirees make more in retirement than they made when employed.
The median household income across Tazewell County is only $57,052 and the poverty rate is 9.6%.
“In the private sector, taxpayers are forced to pay 15% into Social Security for every dollar they earn, receiving an average annual pension of only $16,000! And yet for every dollar that government pensioners contribute to their own pensions, taxpayers are forced to pay $3.76. Imagine what kind of nest-egg taxpayers would have if we were allowed to invest what we are forced to pay into Social Security and the Illinois State government pension systems,” added Tobin.
“This should serve as a glaring warning to taxpayers who are concerned about their rising property taxes, as cities like Pekin and East Peoria in Tazewell County are forced, by law, to raise property taxes without a referendum to fund IMRF pensions,” said Tobin. “It’s legal plunder of hardworking taxpayers for the benefit of the political class.”
“The top estimated lifetime pension in this study of Tazewell County government retirees is $6,644,309. And the lucky recipient of this rich pension is John Erwin who retired from Illinois Central College with an annual pension of $188,064. His personal investment in this wealthy outcome is only about 4.8%.”
“The top annual pension award in Tazewell County goes to Thomas Thomas who, like John Erwin, retired from Illinois Central College at the age of 60. His current annual pension payment is $205,979. These annual payments will accumulate to about $4,872,095. His contributions constitute about 3% of this multi-million dollar payout.”
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“Tazewell County taxpayers need to fire all incumbent bureaucrats on November 8 who have voted to perpetuate this economically devastating system that benefits the few at great expense to the many,” said Tobin.
“Fixing this system is basically easy, but will never happen as long as those who are entrenched in its benefits remain in office: Transitioning new hires to 401(k)-style defined contribution pension plans would be a good start to halting the growth of the problem. As for the current unfunded liabilities, allowing municipalities, school districts, and other taxing districts to reorganize through Chapter 9 bankruptcy, or pursuing federal legislation to preempt the Illinois Constitution’s pension-protection clause, are both becoming very real possibilities if systemic reforms aren’t pursued soon,” said Tobin.
TUA’s most recent 10th Annual Illinois State Pensions Report contains additional data concerning the state’s government pension crisis and elaborates on further solutions to this long-term problem. Check out our list of 218 Illinois referenda to see if you are facing a local tax-increase referendum on November 8.

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Morton Times-News | Reform group reveals Pekin-area pensions

By on October 25, 2016   /   Illinois Press, Latest, Press  

President and Founder of Taxpayers United of America’s, Jim Tobin, was quoted by Morton Times-News about the recent pensions analysis of Pekin and Tazewell County released by TUA.

A Chicago-based tax reform group found no surprises when it studied pensions that retired Pekin-area government workers receive, its top official said Tuesday.
Just “the same blood-sucking system (as) all over Illinois,” said Jim Tobin.

“For every $1 (public) retirees put into their pensions, taxpayers are putting in $3.76,” Tobin said.
The small non-profit watchdog agency has revealed pensions of retirees from police and fire departments, municipalities and school districts throughout the state for the past 10 years. It’s focused on 28 cities over the past two years, Tobin said at a news event in East Peoria.
Its recent analysis of Pekin and Tazewell County school districts, including Illinois Central College, shows former top officials of those entities receive pensions that, in some cases, could exceed what they earned while working, Tobin said.
Former ICC presidents John Erwin and Thomas K. Thomas take in about $188,000 and $206,000, respectively, each year. Yet Thomas contributed only $148,054 and Erwin $318,251 to their pension funds, the TUA study revealed.
Top pensions for former Pekin employees go to former Police Chief Tim Gillespie, at $95,362 a year, and former Fire Chief John Janssen, at $88,750, according to the study.
Most former city employees and teachers receive pensions between $55,000 and $20,000, the study showed. Tobin acknowledged that many among them do not receive Social Security.

“The bottom 100 are pulling down about $1,000 or so” a year. “Many of them worked one or two years. Why they get anything at all” surprises him, “but that’s part of the system.”
It’s one of “legalized theft,” that must be corrected if the state is to ever become solvent, said Tobin, who taught economics at Elmhurst College and served as a bank examiner for the Federal Reserve Bank for about 20 years.
While the Pekin City Council and other local governments can do little at their level to stem the flow of tax dollars to pensions, Tobin said they can join with others to pressure for reforms in Springfield and support Gov. Bruce Rauner, “who’s trying to do the right thing.”

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Daily Herald | Opposition surfaces for Round Lake Park police pension proposal

By on October 19, 2016   /   Illinois Press, Latest, Press  

Jim Tobin, President and Founder of Taxpayers United of America was featured in an article by The Daily Herald about opposing the Round Lake Park referendum.

Formal opposition has surfaced regarding a Round Lake Park ballot initiative seeking permission to borrow $5.4 million to boost the police pension fund.
Taxpayers United of America’s Chicago branch highlighted the Round Lake Park referendum question on the Nov. 8 ballot in a news release expressing concern about governments seeking more money across the state.
The organization contends the request should be rejected because what the village wants to do would be similar to using one credit card to pay down debt on another.
Round Lake Park Trustee Scott Murar, a spokesman for the proposal, and Mayor Linda Lucassen did not return messages seeking comment.
Under the Round Lake Park proposal, the village would borrow the $5.4 million to strengthen the police pension fund by issuing bonds to investors. If voters give permission to borrow the money, it would cost about $100 more annually for an owner of a house valued at $125,200, officials said.
Jim Tobin, president of Taxpayers United of America, said the village would be better off pushing for legislation allowing financially struggling Illinois municipalities to declare bankruptcy or closing the police department and contracting for service to slash expenses.
Tobin noted Rockford’s Larry Morrissey is working with other mayors in support of a bill that would let towns reorganize in bankruptcy court to get relief from pension debt and unfunded state mandates. He said public employee pension costs have skyrocketed to the point where many towns cannot afford to direct money to the funds.
“It’s basically a problem that’s unsustainable,” Tobin said Wednesday.
Round Lake Park’s police pension fund is at 23 percent to 24 percent, believed to be one of the lowest in Illinois. Proponents say the problem is a state tax cap limits how much the village can collect from property owners, thus thwarting any effort to boost the police pension fund.
Officials said while the village is meeting minimum contribution requirements, it is about half what should go into the police pension pool annually. The village has been falling about $240,000 short each year.
In April 2013, voters rejected a request for a property tax rate hike to raise money for the pension fund. Village officials said police layoffs are possible if the Nov. 8 request is rejected.

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