Pension Reform

PENSION CONSOLIDATION BILLS WOULD RAISE PROPERTY TAXES WITHOUT REFERENDUM AND WEAKEN THE SOUND PENSION PLANS

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CHICAGO—The head of Taxpayers United of America (TUA) today voiced his group’s opposition to long-standing requests of Illinois cities and towns to consolidate more than 650 police and fire pension funds, saying that the funds are in such bad financial condition that property tax increases, without property tax increase referendums, would result, and that the funds still would be essentially insolvent. Jim Tobin, TUA president, also voiced opposition specifically to House Bill 1567, sponsored by St. Rep. Ryan Spain (R-73, Peoria), which would amend the Illinois Pension Code to merge all Article 3 police officers’ pension funds and Article 4 firefighters’ pension funds into the Illinois Municipal Retirement Fund (IMRF) on January 1, 2021.

“Illinois’ five statewide government-employee pension funds have a staggering $134 billion in unfunded liabilities,” said Tobin. “Chicago’s four pension funds are struggling with $28 billion in unfunded liabilities.”

“Merging government pension funds would solve nothing, and the better-funded pension funds would see their assets diluted.”

“Illinois Governor Jay Robert ‘J. B.’ Pritzker (D) has appointed a task force to recommend changed to the statewide pension funds, but we know what’s coming. Cook County machine boss Pritzker orchestrated placing the Income Tax Increase Amendment on the 2020 statewide ballot, which would strangle Illinois’ economy with a graduated state income tax.”

“Almost all the money from the last huge income tax increase was plowed into the state’s floundering pension plans for retired government employees, and it didn’t even move the needle. If boss Pritzker succeeds in fooling voters into approving his income tax increase amendment, even that crushing tax hike would not solve the state pension crisis.”

“To be clear: It is impossible for the state to tax its way out of the state’s pension fund crisis. The pension funds are too far gone.”

“The only solution is to place all newly-hired government employees in 401(k) retirement plans, and, if necessary, place the worst of the present pension plans into bankruptcy.”

Rockford Property Taxes Going Up to Fund Gov. Pensions!

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Rockford, IL – Taxpayer Education Foundation (TEF) today released its updated study on Rockford-area government pensions including the top 200 pensions in the Teachers Retirement System (TRS), Illinois Municipal Retirement Fund (IMRF), and the State University Retirement System (SURS). Based on the TEF pension study, Taxpayers United of America (TUA) issued the following statement:

“IMRF pensions, largely kept afloat by property taxes of homeowners and businesses, hit Rockford taxpayers particularly hard. Rockford is right up there with New York and New Jersey. With the fourth highest property taxes in the entire country, Rockford is especially burdened by an effective tax rate of 2.83%,” said Jim Tobin, president of TUA.

“For many homeowners, this means that their property taxes meet or exceed their actual mortgage payment, although this is financially detrimental to every property owner in Rockford.”

“We have passed the point where the government bureaucrats who made these outrageous promises can tax their way out of the problem, although they will try their damndest. This is why Springfield Democrats have put on the 2020 statewide ballot the Income Tax Increase Amendment.

Cook County machine Democrat, Gov. Jay Robert “J. B.” Pritzker and his buddy, Chicago Machine Boss, Michael J. Madigan, Democrat Speaker of the Illinois House, are hoping to keep propping up the pension system by increasing the income tax under the guise of a ‘more fair’ graduated state income tax.”

“I guarantee that the middle class will be hit the hardest by the Income Tax Increase Amendment, as well as all of the new and higher taxes they are implementing.”

  • Click here to see the top 200 Rockford TRS pensions
  • Click here to see the top 200 Rockford and Winnebago County IMRF pensions
  • Click here to see the top Rockford SURS pensions

“Rockford taxpayers, because of their comparatively high property tax rate, will be hit harder by the Pritzker Income Tax Increase Amendment than most Illinoisans.”

“When you look at what the individual government retirees are actually collecting in taxpayer funded pensions, you can get a better idea of why this theft of taxpayer wealth is so egregious. Keep in mind that the average taxpayer will collect only about $17,500 a year from Social Security, and that IMRF pensioners are also eligible for a Social Security pension.”

Paul A. Logil retired from the Winnebago County government and collects an annual pension of $168,424. He retired at the age of 55 and paid $224,614 into the IMRF. His estimated lifetime pension payout is approximately $4,329,741. Paul is also eligible for a social security pension.

Alan S. Brown retired from Rockford SD205 at the age of 55. His current annual pension is $183,329. He paid only $175,892 into TRS and his estimated lifetime payout is $5,321,315.

Karl Jacobs retired from Rock Valley College. His current annual pension of $179,592 is more than the $159,281 he paid into SURS. His estimated lifetime pension payout is $2,833,620.

“What is most troubling about the pension crisis is that none of the elected bureaucrats are willing to do anything to fix the problem. Speaker Madigan obviously is hoping to prop this system up just long enough for him to retire, and escape all responsibility for the financial demise of Illinois.

“All Illinois government new hires should be placed in a 401(k) style retirement savings account beginning immediately, and the retirement age should be increased to 65. These measures would at least slow the bleeding until comprehensive pension reform can be enacted,” said Tobin.

13th Annual Illinois Pension Report

Pension Release

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Report Overview

Retired Government Employees Receiving $100,000+ Annually

Chicago — Taxpayer Education Foundation (TEF) today released the results of its 13th annual Illinois state pensions report. This new report analyzes government-retiree pensions of Illinois’ General Assembly Retirement System (GARS), Judges’ Retirement System (JRS), Teachers’ Retirement System (TRS), State Universities Retirement System (SURS), state employees’ retirement system (SERS), and the Illinois Municipal Retirement Fund (IMRF). The report demonstrates that the Pritzker administration has allowed the Illinois pension crisis to worsen.

The unfunded government pension liabilities Springfield politicians placed on the shoulders of Illinois taxpayers have grown. The amount liabilities grew was over $2.1 billion, bringing the new total to $143,593,104,031 for 2019. Keep in mind that these are the numbers the state of Illinois has issued. Moody’s estimates the Illinois pension liabilities to be roughly $100 billion higher.

One look at these gargantuan pensions illustrates why the situation is deteriorating. Leslie Heffez retired from the university of Illinois at Chicago (UIC) at the age of 55. His current annual pension is a mind-boggling $616,624. This former government employee is the first person in the six major Illinois pension funds to rake in over $600,000 a year. Heffez is on track to receive $21,093,181 by the time he is 85, thanks to a 3 percent compounded cost of living adjustment (COLA) Illinois Gov. Jay Robert “J. B.” Pritzker declines to do anything about.

The compounded cola is the most dangerous part of the Illinois pension scam. The three percent cola can double a single government pension in 24 years. This happens often because the average Illinois government employee retires at 61. The IRS estimates that for a person 65 years of age, his estimated life expectancy is 85. We can expect many government pensions to double by that age.

A central figure responsible for the pension crisis is former Illinois governor James R. Thompson (R), one of the worst tax-raisers in Illinois history. Thompson also retired at age 55 and currently receives an annual pension of $161,152. Thompson was one of the key members of the state government who started the pension crisis. If not for his 3 percent compounded cost of living increase for retired Illinois government employees, the crisis would not be as bad as it is.

An example of the crisis worsening is how the number of millionaire government retirees is growing. There are now 2,572 more government retirees receiving over $100,000 compared to last year. This brings the new total to 22,053 retired government employees receiving over $100,000 a year.

Additionally, there are now 111,809 Illinois government pensioners collecting more than $50,000 in taxpayer funded payments yearly. This is an increase of 4,717 from last year, that total being 107,092. The average annual social security pension for taxpayers in 2019 is $17,532.

The taxes to support these outrageous Illinois government pensions are driving taxpayers out of Illinois. Almost all of the last $5 billion-dollar income tax increase was used to prop up the state pension funds. This is why Illinois governor Pritzker wants to pass the graduated income tax increase amendment, a huge income tax increase for Illinois taxpayers. Instead of seeking pension reform, Pritzker wants another massive income tax hike.

There is no reason to believe this amendment will only affect the “rich.” Pritzker passed a multibillion-dollar regressive tax increase including the recent 19 cent Illinois gasoline tax hike. It is estimated that Pritzker’s gasoline tax will extract from Illinois taxpayers $1.2 billion dollars more a year. These taxes affect Illinois’ most struggling residents disproportionately. There is every reason to believe that future tax hikes planned by Springfield politicians will affect the state’s middle class, and will be used to further prop up the state’s lavish, gold-plated pensions for retired government employees. 

Rather than placing more taxes on the backs of the state’s most vulnerable citizens, and plotting to increase taxes on the state’s middle class, Pritzker should explore significant reforms for the state’s bankrupt pension plans for retired government employees.

Click for top SERS 2019 Pension Grid

Click for top GARS 2019 Pension Grid

Click for top IMRF 2019 Pension Grid

Click for top JRS 2019 Pension Grid

Click for top SURS 2019 Pension Grid

Click for top TRS 2019 Pension Grid

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DISCLAIMER

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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