Pension Reform

Pension Problems Hit Madison and St. Claire Counties

View as PDF  East St. Louis, IL – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Madison and St. Claire County government schools and county governments; Belleville, Collinsville, Alton, and Edwardsville municipal governments; and Southwestern Illinois College and Southern Illinois University Edwardsville.
“These government pensions explain why bureaucrats seek to increase taxes,” said TUA’s director of operations, Jared Labell.
“There are about 300 area government retirees collecting pensions of at least $100,000 annually, while 17.6% of St. Claire County residents live below the poverty level, along with 14% of Madison County residents.”
“Across 6 state pension funds, there are 12,154 government pensioners collecting six-figure pensions and 85,893 pensioners collecting more than $50,000 annually, where the state debt per capita is $24,959.”
“On average, these government pensioners contribute only about 5.5% to their own retirement payout. Taxpayers are forced to contribute $4 for every $1 that the government employees pay toward their own retirement. In the private sector, employees pay 15% of every dollar they earn into Social Security for an average pension of only $15,000!”
“Illinois’ state pension systems total nearly $200 billion in unfunded liabilities and the whole racket is inevitably unsustainable. The politicians have shown for years that they cannot be trusted to manage other peoples’ money, let alone their savings for retirement, nor should this be the role of government,” said Labell. “Each day that passes without transitioning new government employees from the current defined benefit plans to 401(k)-styled defined contribution plans is another lost opportunity to manage this ever-growing economic catastrophe. Not only would this change shield taxpayers from great financial risk, but it enables government employees to better manage their finances for their retirement needs and allows portability as they save for their own retirement.”
“Alton Police and Firefighters have some of the largest unfunded pension liabilities according to a 2013 report of the Commission on Government Forecasting and Accountability. The police funding ratio is only 29.3% and the firefighters fund is only 30.23%.”
“Taxpayers are on the hook for every penny of the shortfall in pension funding. Forcing taxpayers to pay such a heavy portion of someone else’s retirement is criminal,” said Labell.
“It is time to protect the future of taxpayers who have been scammed by politicians and union thugs into going along with a system that creates and constitutionally protects a special class of government elite.”
“It’s also time for union leadership to have a frank discussion with the rank and file, educating them on the inevitable collapse of an unsustainable crony system designed to siphon money from taxpayers for the benefit of the few. The unions should use those dues forced from members to bail out the pension system rather than use those funds to elect political cronies who keep them in power.”
“Take a look at the pension of Michael D. Gray who retired from East Alton SD 13. He gets $148,809 in annual pension payments. Retiring at only 54, his taxpayer funded pension payout will accumulate to more than $5.7 million! And his personal investment in that payout? A mere 3.7%.”
“Then there is Russell L. Clover’s pension. Retired from O’Fallon THSD 203, he gets $180,063 in annual pension payments. Those payments with compounded annual cost of living adjustments will accumulate to $4.5 million! His personal investment was only about 4.7%.”
Click to view pensions for

 
“This government pension system is the single cause of Illinois’ critical financial situation and it is mathematically impossible to tax our way out of this situation. 80% of local taxes go to fund government employee pay, pensions, and benefits.”
“The Illinois government has failed us; local governments have failed us. It is in everyone’s best interest to solve the pension problem before the system completely collapses. It is no longer a matter of ‘if’ it will collapse, but when.”
“Our solution is to immediately place all new hires into 401(k) style retirement savings accounts, increase member contributions to their retirement fund, increase retirement age for full benefits, and increase member contributions to 50% of health care premiums. Anything short of these reforms will do nothing to permanently solve the problem. If it takes a Constitutional Amendment, then we need to get that on the ballot in 2016.”

Illinois Budget Impasse Preferable to Business as Usual

View as PDF  Chicago—Taxpayers United of America (TUA) released five analyses of the ongoing Illinois budget dispute over the past two weeks, outlining various ways the Illinois General Assembly and Governor Bruce Rauner (R) could implement reforms to pass the state’s first balanced budget since 2001.
“Taxpayers need Illinois’ political class to properly address the current budget impasse by enacting meaningful reforms,” said Jared Labell, TUA’s director of operations. “But if the bureaucrats in Springfield insist on upholding the status quo, which has brought the state to financial ruin, then a continued budget deadlock is preferable to higher taxes, new state income and sales taxes, more debt, and increased spending.”
“Illinois’ state pension systems total nearly $200 billion in unfunded liabilities and the whole racket is inevitably unsustainable, as we discuss in Part I of TUA’s budget analyses. The politicians have shown for years that they cannot be trusted to manage other peoples’ money, let alone their savings for retirement, nor should this be the role of government,” said Labell. “Each day that passes without transitioning new government employees from the current defined benefit plans to 401(k)-styled defined contribution plans is another lost opportunity to manage this ever-growing economic catastrophe. Not only would this change shield taxpayers from great financial risk, but it enables government employees to better manage their finances for their retirement needs and allows portability as they save for their own retirement.”
“Spending reform must be made a priority, as is clear in Part II of TUA’s budget series,” continued Labell. “The proposed level of appropriations for all state funds in fiscal year 2016 tops $60 billion. As TUA president Jim Tobin put it, “The political class and some media outlets frame the budget crisis as an issue of revenue, but that’s just not the case. The problem with Illinois’ budget is the result of years of profligate spending by the General Assembly and a series of governors who encouraged it.”
“The budget appropriations game is one that is played by both members of the Illinois General Assembly and the governor,” said Labell. “Even though Gov. Rauner has put forth a serious effort to make cuts to the bloated Illinois budget, in the Part III of TUA’s budget analyses, we point out that more than $15 billion in spending remains constant from fiscal year 2015’s actual appropriation totals compared to Gov. Rauner’s 2016 proposed appropriations. The time has come for more budget cuts.”
“The Illinois State Police are the Praetorian Guard for the political class and are inessential,” said Labell. “Sweeping cuts to the superfluous Illinois State Police force would save taxpayers untold billions in expected salaries, benefits, and pension costs, as outlined in Part IV of TUA’s budget series.”
“Although there appears to be a growing bipartisan consensus in Springfield to cut loose the Illinois Department of Commerce and Economic Development (DCEO) from the clutches of the state government, it’s hard for politicians to give up on old habits,” said Labell. “So they are only proposing to turn some of its functions into ‘public-private partnerships,’ instead of abolishing the agency altogether. Part V of TUA’s budget overview encourages the complete privatization of this department’s operations, rightfully leaving the economic prosperity of Illinois and its businesses to the market, not the whims of bureaucrats. The government should not be in the business of doling out corporate welfare or subsidizing politically connected firms with our tax dollars as Illinois faces such grave financial difficulties.”
“The state of Illinois has been without an operating budget for nearly a month, and the sky has not fallen. The members of the Illinois General Assembly and Gov. Rauner can work together to protect taxpayers from further economic calamity, or the political gridlock should persist. The government cannot expect Illinoisans to continue to send their tax dollars to Springfield if the political class is intent on fiddling while Rome burns, all the while using taxpayers’ hard-earned money as kindling,” concluded Labell.

Easy Budget Relief – Abolish Illinois Dept. of Commerce

View as PDF Chicago—The president of Taxpayers United of America (TUA) today urged the Illinois General Assembly to abolish the Illinois Department of Commerce and Economic Opportunity (DCEO), rather than adopt ineffectual measures that would only perpetuate what he called “a corporate welfare institution of monstrous proportions.”
“While the Ill. House of Representatives passed House Bill 574 on June 23, 2015, and sent it to the Illinois Senate, which would allow the Illinois Department of Commerce and Economic Opportunity to turn some of its functions into a ‘public-private partnership,’ such a move is inadequate and will not make a dent in Illinois’ fiscal emergency,” said Jim Tobin, TUA president.
“The State of Illinois is broke; it is going down the drain, and it’s time to put entire bureaucratic state programs on the chopping block,” said Tobin.
“House Speaker Mike Madigan, Senate President John Cullerton and their caucuses passed a budget for the 2016 fiscal year beginning July 1 that is at least $4 billion in the hole. The upcoming budget deficit would be more than double that of last year.”
“The DCEO is responsible mainly for disbursing funds to local businesses and local governments. In addition to $528 million in state funds, the DCEO also disburses about $1.25 billion in federal funds.”
“These are nothing but welfare payments to politically connected business firms. All corporate welfare should be immediately ended. But if the members of the Illinois General Assembly insist on handing the federal loot to their corporate friends, the federal funds should be collected and disbursed by the Illinois Department of Public Aid as welfare checks. That would at least be honest.”

BLOG POSTS

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.

ADDRESS

Chicago, IL 60606 205 W. Randolph Street, Suite 1305
Phone: (312) 427-5128
Fax: (312) 427-5139
Website: https://taxpayersunitedofamerica.org
Email: info@taxpayersunited.org

Donate