American Legislative Exchange Council| The Williams Report: A look at fiscal headlines from statehouses nationwide

By on July 20, 2016   /   Illinois Press, Latest, Pension Reform, Press  

Taxpayers United of America’s Executive Director, Jared Labell, was quoted by American Legislative Exchange Council about pension reform.

State Budgets

Illinois: Governor Signs Stopgap Budget — But Relief from Stalemate Proves Temporary
A deal cut by Illinois lawmakers and Governor Bruce Rauner will keep state government running for another six months. Just minutes after the spending measure was signed, the two sides resumed trading barbs.
Massachusetts: Baker ‘Rightsizes’ the State Budget
Governor Baker signed a $38.92 billion state budget last week, after cutting $256 million from the original bill. The savings resulted from roughly 300 line items and 500 earmarks vetoed.
North Carolina: Governor Signs State Budget
Governor Pat McCrory signed a $22.3 billion state budget into law on Thursday. The budget includes raises for teachers and state workers, as well as a middle class tax cut.
Pennsylvania: Vape Shops Hit Especially Hard by New Taxes in State Budget
In the aftermath of product-specific tax hikes, “vape shops” across Pennsylvania are struggling to remain afloat. Vaporized nicotine is often used by those looking to quit smoking, and yet it is treated the same as cigarettes under the new law. Even nicotine-free vapor products are now heavily taxed.
Texas: Budget Dance Begins
It’s time for the “Texas Budget Two-Step,” according Watchdog.org’s Mark Lasheron. The dance began with a joint letter from the Governor, Lieutenant Governor and Speaker of the House to every government agency, calling for 4 percent reductions in their spending requests. Various interests groups have already responded with panic.

Pension Reform

National: The Funding of State and Local Pensions: 2015-2020
A new study from the Center for Retirement Research at Boston College finds the funded status of state pension plans further declined in 2015 under new GASB rules. The study authors warn that, if markets fail to recover this year, “funding will drift lower.”
California: CalSTRS Tanking Teachers Pensions to be Politically Correct
The California State Teachers’ Retirement System has pledged to invest heavily in “low-carbon strategies” both at home and abroad. “The losers will be the retirees and the taxpayers,” writes the California Political Review. “CalSTRS, the teachers’ pension system does not even pretend to be investing for the betterment of the retirees.”
Illinois: State Pension Reform Needed to Avoid ‘Catastrophic’ Fate
A new report from Taxpayers United of America (TUA) confirms the unsustainability of public pensions in Illinois. Jared Labell, TUA’s executive director, specifically faults Article XIII, Section 5 of the state constitution, which “unfairly chains generations of taxpayers to an uncontrolled financial burden created by the disastrous decisions of politicians in Springfield.”
New Jersey: Pension Reform at a Crossroads in the Garden State
Erica Jedynak asks her fellow New Jerseyans: “Do we have the courage to reform a broken pension system that’s driving us towards insolvency?”
Rhode Island: Worried About Risk, Pension Fund Managers Mull Conservative Investment Approach
General Treasurer Seth Magaziner stressed the need to be “a little more risk-averse,” but did not say projected returns should be lowered accordingly.

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Government Pensions Gobbling Up Tax Dollars in Henry County

By on July 12, 2016   /   Illinois, Latest, Pension Reform  

View as PDF Geneseo, IL – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Henry County government retirees, as well as Geneseo and Kewanee municipal, local school, and police retirees.
“There are more than 240 retired government teachers in Henry County collecting pensions that will accrue to seven-figure estimated lifetime payouts. Unlike the private sector, these government school retirees will become multimillionaires by not working and retiring on average at 57,” 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.
The median household income across Henry County is only $52,518 and the poverty rate is 11.3%.
“On average, these government pensioners will have contributed only about 9.8% to their own lifetime retirement payout. Taxpayers are on the hook for every penny of any shortfall in pension funding, whether funding the system through state income taxes or property taxes for IMRF, and the last decade has been disastrous. Forcing taxpayers to pay such a heavy portion of someone else’s retirement is criminal,” said Tobin.
“In the private sector, employees are forced to pay into Social Security for every dollar they earn, receiving an average annual pension of only $16,000 from Uncle Sam! That total pales in comparison to the amount of tax dollars siphoned away by government retirees every year.”
“More than five hundred Henry County government retirees are former IMRF employees in a county of barely fifty thousand residents. This should serve as a warning to taxpayers who are concerned about their rising property taxes, as cities like Geneseo and Kewanee in Henry 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.”
“Jack B. Schlindwein, who retired in 2013 at age 54 from Geneseo CUSD 228, is set to receive the highest estimated lifetime pension payout in this study. His current annual pension is $116,882, and he contributed a total of $168,380 to his own pension, easily recouping his total contributions within two years of retirement. He has already collected $302,595. His taxpayer-funded pension payout will accumulate to more than $5.3 million! And his personal investment in that payout is a mere 3.2%.”
“Harold E. Ford also retired from Geneseo CUSD 228, but in 2003, and at the age of 55. He currently receives the largest annual pension in the study, collecting $140,577 a year in retirement. The total contributions made to his own pension while employed, $138,952, were less than what he collects during a single year of retirement. His annual pension payments, with compounded annual cost of living adjustments, will accumulate to more than $4.4 million! His personal investment was only about 3.1%.”
Click to view the complete list of the following:

“The financial situation in Illinois is dire. Concerned residents and taxpayers must demand reforms from their local politicians and state legislators. Resolving the crisis is possible, but it won’t be an easy road, considering how many current and former government employees are entrenched in the system,” said Tobin.
“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.

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Woodstock Seeks to Reach Further Into Taxpayers’ Pockets

By on May 12, 2016   /   Illinois, Latest, Pension Reform  

View as PDF Woodstock—Taxpayers United of America (TUA) today released the results of their updated analysis of salaries and pensions for Woodstock municipal government employees.
“Woodstock government bureaucrats are trying to seize the opportunity to steal even more of taxpayers’ hard-earned cash by adopting Home Rule for its greedy empire building,” stated Jim Tobin, TUA president.
“There are currently more than 300 full and part-time employees for a population of less 25,000! Fourteen of those employees make more than $100,000 a year and 157 of those jobs are pension eligible.”
“At least fourteen of the current Woodstock pensioners will collect more than $1 million in largely taxpayer-funded pensions, while the average Social Security (SS) beneficiary will be lucky to see about $400,000 in lifetime payments.”
“Home Rule will give the Woodstock bureaucrats the power to tax and regulate, virtually without limit, anything they want without the approval of voters through a referendum. If a measure is good for the constituents, it should stand up to a referendum. This is one of the most important controls that voters have over their local government and there is no good reason to give it up and hand that power over to bureaucrats,” urged Tobin.
“Never forget that 80% of municipal taxes, including property taxes, go to pay government employee salaries, pensions, and benefits and that number is climbing as the state continues to make necessary cuts.”
“Woodstock city officials state it would be ‘irresponsible of them to not take advantage of getting the extra $151 in shared state revenue per person’ for the city, and that the city has a history of keeping taxes low for residents by not taking the property tax extension limitation law. Just where do these officials think that ‘state revenue’ comes from? The sky? All revenue comes from us, the taxpayers.”
“To help the average taxpayer understand the problem, we list the names of the pensioners and the amounts they collect in retirement,” added Tobin. “It really hits home when people see the names of their local ‘civil servants’, people in their community that they know at least by name, and the stunning amounts they collect from taxpayers.”
“Timothy J. Clifton, retired from the Woodstock Municipal Government, tops our Woodstock list and ranks 230 in the state of Illinois with a very comfortable $112,998 annual pension! The accumulation of those payments, over a normal lifetime, will reach about $2.9 million. His contribution to that gold-plated pension was only $342,341.”
“Roscoe Stelford, III tops the list for our highest current Woodstock salary. This poor ‘civil servant’ takes in about $155,000 in salary alone! This doesn’t include the gold-plated pension and other benefits he gets!”
Click the links below to view the following data:

“We need constitutional reforms that change the Home Rule statute to leave taxing power with the taxpayers’ approval and reforms that eliminate the political pensioners as a protected, elite class,” said Tobin.
“The era of smoke and mirrors to siphon wealth from the hardest-working middle class is over. We need to send a loud and clear message that their pattern of reckless empire building is no longer acceptable. Illinois is in a financial meltdown and if we allow local officials to pick up where the state has left off, there will be few choices left for taxpayers but to revolt or vote with their feet,” concluded Tobin.

*Lifetime estimated pension payout includes 3% COLA (simple interest) and assumes life expectancy of 85 (IRS Form 590). Nearly all IMRF pensioners also receive Social Security benefits in addition to their IMRF pension. Any blank spaces in the data are intentional and due to government redactions or withheld data points in response to Freedom of Information Act requests.

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