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No Budget Relief Without Pension Reform

View as PDF Chicago—Taxpayers United of America (TUA) today released the results of its analysis of the effects of the State of Illinois’ government employee pension systems on the state’s daunting budget crisis.
“How does the Illinois government pension system negatively impact Illinois’ budget crisis? Let me count the ways,” stated executive director of TUA, Rae Ann McNeilly.
“We actually start and finish our analysis with the same issue. The Illinois State Constitution creates a protected class of political residents through an amendment that forever places unfair financial burdens on the taxpayers of the state.”
“While taxpayers struggle to make their property tax payments, working well beyond retirement age, these government pensioners enjoy lavish, gold-plated retirements beginning on average at the age of 59.”
“But let’s talk about some of the numbers that render this system so burdensome to average taxpayers. According to our analysis, government employees pay only about 5.8%, on average, of their multi-million dollar estimated lifetime payout. Since 1998, government employee contributions to the state pension funds have increased by about 75% while taxpayer contributions have increased by a stunning 427% over the same period. Increasing government employee contributions to their own retirement fund by 10% would save taxpayers over $4.3 billion per year.”
“Secondly, the government employee pensions include a 3%, compounded annual cost of living adjustment. This excessive benefit doubles the annual pension paid out to retirees at least once over a natural lifetime. Elimination of this benefit alone would save taxpayers $250 million for the first year, increasing annually because interest would no longer be paid on increases.”
“The third and equally excessive benefit is the early age at which government pensioners are able to retire, some still in their 40s, although our research show full-time, life-long government pensioners have an average retirement age of about 59. Raising the retirement age to 67 in order to receive maximum benefits would be in line with the private sector taxpayers and the total pension liability would be reduced by 27% or $49 billion.”
“Within the pension benefits are the healthcare benefits that government employees and retirees pay little or nothing out of their own pockets. These healthcare benefits aren’t even included in the nearly $200 billion in unfunded liabilities. If employees and retirees contributed 50% to their own healthcare, as most private sector employees, it would ease the state’s budget by $3.6 billion a year.”
“Then we have the problem of expanding the pension system to include the highly paid judges and legislators, which creates an obvious conflict of interest as demonstrated by the recent challenge and ruling to the General Assembly’s half-hearted attempt at pension reform of SB1. Judges upheld the protected political class benefits, taxpayers be damned.”
“This brings us full-circle, although certainly not completely detailed, to where we actually have a Constitutional amendment that creates and protects an elite political class with absolutely no regard to the taxpayers who can and are even forced to lose their own homes to ensure to constant care and feeding of a corrupt and immoral government pension system.”
“While Governor Rauner certainly has made clear his intent to reform the government employee pension system, his latest 500 page proposal depends on the legal splitting of hairs that negotiations say, ‘we’ll give you this, if you sacrifice that’, likely can’t withstand legal challenges, especially those being deliberated by beneficiaries of the government pension cabal – the state’s judges.”
“The only option for adequate, permanent reform that eliminates unfunded liabilities and a protected political class under this corrupt system is to get a Constitutional amendment on the ballot that removes the immoral protection of government employee benefits above all others. But the General Assembly must also pass a bill that allows local Illinois governments the right to restructure their debt under bankruptcy protection.”
“To be successful in such an endeavor, media must first be honest about the reality of the mathematical impossibility of sustaining the system as it stands. Rank and file members and average government employees are worried about their own pensions and whether or not they will even get pennies on the dollar.”
“But when the ‘moderator’, Eddie Arruza of Chicago Tonight’s panel discussion on the subject clearly chooses a side in the issue, and the so called ‘non-partisan, non profit’ panelist, Ralph Martire, executive director for the Center for Tax and Budget Accountability counts himself and his organization as winners in the judges’ ruling against SB1, there is no objectivity, much less honesty in the bleakness of the outlook for today’s and tomorrow’s government pensioners getting even pennies on the dollars of the ‘promises’ made to them.”
“While biased media and talking heads share much of the responsibility in keeping people in the dark about the reality of the Illinois government pension crisis, it couldn’t be clearer who the engineers and power brokers are who have brought Illinois literally to the brink. Michael Madigan has controlled the Illinois General Assembly for 38 of his 40 years as a state representative. With the assistance of Senate President John Cullerton, they have literally sold the very soul of the state for their own gain and power. They have run roughshod over Illinois taxpayers for far too long. And with the help of a partisan media, they have yet to be held accountable.
“Just take a look at the stunning pensions these judges and legislators get. It is no wonder that they protect the government pension cabal without hesitation.”
Arthur Berman retired from the General Assembly and rakes in a cool $228,960 annually! His estimated lifetime payout is about $3.7 million. His stake in that lavish payout? About 3%.”
Judge Tobias Barry is currently getting $204,083 in annual pension payments. Fortunately he didn’t retire until 82 so his estimated lifetime payout is only a humble $2.3 million.
“There are now 12,154 Illinois government pensioners collecting more than $100,000 and 85,893 pensioners collecting more than $50,000 annually! Those are staggering numbers, considering the taxpayers who fund these pensions get an average Social Security pension of about $15,000 a year.”
“This is not a retirement system or a safety net for ‘the poor public servants’ who have given their lives to the community. This is theft. This is immoral and unethical theft of taxpayers’ hard-earned money to be given to the political elite in order to secure the power of the union thugs and the bureaucrats who benefit from their support, all guaranteed by a crony statute.”
 
*Lifetime estimated pension payout includes 3% compounded COLA and assumes life expectancy of 85 (IRS Form 590).

The Belly of the Beast: Springfield and the Pension Crisis

View as PDF Springfield—Taxpayers United of America (TUA) today released the results of its updated study of the top pensioners of Sangamon County government, Sangamon County government schools, Lincoln Land Community College, University of Illinois at Springfield, and Springfield municipal government. Also updated were the state pensions for retired judges (JRS), legislators (GARS), and state employees (SERS).
“Well over 1,000 of the Sangamon area government pensioners receive multi-million dollar lifetime pension payouts,” said Jared Labell, TUA operations director. “The pensioners’ average personal investment is only about 5.5% of the lifetime payouts, leaving taxpayers on the hook for funding the majority of the unsustainable government pension system.”
“While taxpayers struggle to make their property tax payments, working well beyond retirement age, these government pensioners enjoy gold-plated retirements beginning at the age of 58, on average. Pensioners collect millions of dollars from taxpayers well after their government employment has ended, and today we are seeing the results: current tax revenue is directed toward funding the behemoth pension system first and foremost, before other services and present needs.”
“Illinois has one critical budgetary problem: the government pension system. We need to stop overcomplicating things and simply solve that problem if we want to see Illinois flourish.”
“It is unconscionable that the state budget battle continues in the light of the dire economic situation Illinois faces,” continued Labell. “The battle over the budget wouldn’t exist if the power brokers didn’t ensure the perpetuation of the pension problem with an amendment to protect it from sane, necessary reform. This includes the legislators who create such laws and the judges who make any rulings on its legal challenges. Unless real reforms are made soon, the taxpayers of Illinois will merely be funding their own funerals.”
“Just take a look at the stunning pensions these judges and legislators get. It is no wonder that they protect the government pension cabal without hesitation.”
Arthur Berman retired from the General Assembly and rakes in a cool $228,960 annually! His estimated lifetime payout is about $3.7 million. His stake in that excessive payout? About 3%.”
Judge Tobias Barry is currently getting $204,083 in annual pension payments. Fortunately, he didn’t retire until 82, so his estimated lifetime payout is only a humble $2.3 million.
“There are now 12,154 Illinois government pensions of more than $100,000 and 85,893 totaling more than $50,000 each annually! Those are staggering numbers, considering that the taxpayers who fund these pensions get an average Social Security ‘pension’ of about $15,000 a year.”
“Retired from U of I Springfield, Aaron Shures enjoys an annual taxpayer funded pension of $115,332. Over a normal lifetime, he will get about $6.4 million in pension payments because he retired at the age of 51. His personal investment in his rich pension is about 3% or $193,624.”
“Ball Chatham CUSD5 retiree, Richard J. Voltz retired at 57 and his current annual pension is $167,685. He will collect about $5.6 million while he only contributed $206,988 of his own money. That’s a 3.7% investment in his own multi-million dollar retirement payout!”
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“Although we did not support or endorse SB 1 as any kind of pension reform, as it did more harm than good, the unanimous ruling of the Illinois Supreme Court clearly illustrates the limited options available to solve the pension crisis…and the answers are not tax increases,” said Labell.
“A constitutional amendment that is fair to taxpayers, as well as government employees, must be approved in 2016 to deal with Illinois’ insolvent government pension system. In the meantime, if the Illinois General Assembly increased individual government employee contributions to their own gold-plated pensions by 10 percentage points, it would save taxpayers about $150 billion over the next 35 years – about $4.3 billion a year – and save the State of Illinois from financial ruin. If all else fails, there is always the option of approving legislation allowing municipalities, government school districts, and other taxing districts in Illinois to begin the process of filing and restructuring under Chapter 9 bankruptcy.”
“For every day that the political class refuses to solve the government pension crisis, they are gambling with the future of Illinois, and doing so with your tax dollars.”
*Lifetime estimated pension payout includes 3% compounded COLA and assumes life expectancy of 85 (IRS Form 590).

TUA Releases Tax Survey of 98th Illinois General Assembly

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CHICAGO— Taxpayers United of America (TUA), one of the largest taxpayer organizations in the nation, has released its 16th biennial, non-partisan tax survey analysis, revealing the tax and spending records of every member of the 98th Illinois General Assembly from January 2013 to January 2015.
“The 98th Illinois General Assembly was mostly a disaster for Illinois taxpayers,” said TUA operations director, Jared Labell. “The most notable bill to come out of this session was SB 1, the half-hearted pension reform legislation that has since been ruled unconstitutional by the Illinois Supreme Court.”
“This bill, sponsored by the leadership of both parties in the legislature, was a pathetic attempt at reforming the unsustainable government pensions in Illinois.” TUA did not support SB 1 because it did nothing to eliminate unfunded government pension liabilities and strengthened the guarantee that taxpayers must pay these government employee benefits.
“Our 16th Tax Survey contains a roll call of every legislator and how they voted on each significant tax or spending bill surveyed for this session,” explained Labell. “Legislators’ scores are normalized and range from 0% to 100%, indicating how often they supported taxpayers by voting against tax and spending increases. The best scoring legislators voted against all or most tax and spending increases and are included on the list of Taxpayers’ Friends, while those who most often voted against taxpayers are included on the list of Taxpayers’ Enemies.”
TUA has used the same methodology to evaluate each lawmaker’s record since publishing its first Tax Survey in 1983.
Based on TUA’s methodology for analyzing votes, the 98th Illinois General Assembly set a record for low-scoring legislators.
Click here to view the 16th Tax Survey of the Illinois General Assembly.
27 members of the Illinois House voted against taxpayers on every bill featured in TUA’s survey, earning each of them a score of 0% and a spot on the list of Taxpayers’ Enemies. Among those members in the Zero Percent Club are Jay Hoffman (D-113, Belleville), John E. Bradley (D-117, Marion), Laura Fine (D-17, Glenview), Jehan A. Gordon-Booth (D-92, Peoria), and Michael Zalewski (D-23, Riverside).
15 members of the Illinois Senate join their House counterparts in the Zero Percent Club, including James F. Clayborne, Jr. (D-57, East St. Louis), Julie A. Morrison (D-29), Dan Kotowski (D-28, Park Ridge), and Don Harmon (D-39, Oak Park).
“We are happy to report that 20 legislators earned their place on our list of friends, but that’s a depressing number, considering the fact that there are 177 members in the legislature,” said Labell.
In the Illinois House, Michael Unes (R-91, Pekin), David Reis (R-109, Olney), Thomas Morrison (R-54, Palatine), Dwight Kay (R-112, Edwardsville), and Jack D. Franks (D-63, Woodstock) all earned 91% scores for the session.
In the Illinois Senate, Kyle McCarter (R-54, Decatur) scored 82%, while Jason A. Barickman (R-53, Bloomington) and Chapin Rose (R-51, Champaign) both received 73%.
“Disgraced former Illinois Gov. Patrick J. Quinn (D) had a failing score of 10%. Quinn received credit for vetoing a bill that reduced transparency in the process of Freedom of Information Act (FOIA) requests, but that veto was eventually overridden by the Illinois General Assembly.”
“With an average score of 34% in the Illinois House and 24% in the Illinois Senate, there is much to improve upon when it comes to legislators defending the taxpayers of Illinois,” said Labell. “Taxpayers are encouraged to study our analysis and keep these scores in mind for the next election. While legislators continue to advocate for higher taxes and increased spending during this session, it is our job to remind them that elections mean that keeping their office is not a guarantee.”

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Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.

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