Pension Reform

CHICAGO FED PROPOSAL TO HELP ILLINOIS: NEW STATEWIDE PROPERTY TAX!

View as PDF
CHICAGO—The president of Taxpayers United of America (TUA) today condemned the recommendation released May 13 under the letterhead of the Federal Reserve Bank of Chicago to introduce a statewide 1% property tax to bail out the floundering government-employee pension plans in the state.
“This recommendation is not only astounding, it’s irresponsible,” said Jim Tobin, TUA president, economist and former Federal Reserve auditor.
“Illinois taxpayers already are heavily subsidizing the lavish, gold-plated pension plans of retired government employees. The $5 billion generated by the latest state income tax increase is being poured into the black hole of the state pension funds, and still the funds are essentially insolvent.”
“It’s impossible for the state to tax its way out of this mess, but tax thieves still propose new and higher taxes for Illinois taxpayers. More taxpayers have fled Illinois than any other state, but this doesn’t seem to register with tax-and-spend politicians.”
“The reasons given for this recommendation are pathetic. Because homeowners purportedly have benefited most from government ‘services,’ say the three authors of this proposal, they should pay a larger share of the costs of bailing out the state pension plans. In other words, they say the most successful people in the private sector should pay more to support these extravagant pension plans.”
“Illinois is bankrupt in fact, if not in name, and the only way to keep the state from going under is to place a state constitutional amendment on the statewide ballot to allow reductions in these pension benefits. All new government hires should be put into their own 401(k) accounts, and current retirees must greatly increase their contributions to their pension plans.”
“A statewide 1% property tax would devastate the already-feeble Illinois economy, and accelerate the departure of the middle class from Illinois.”

Illinois Government Pension Rip-off


View as PDF
Chicago – Taxpayer Education Foundation (TEF) today released its annual report of the State Employees’ Retirement System (SERS). Each year TEF obtains updated information on SERS retiree pension payments through the Freedom of Information Act (FOIA) requests directly from the SERS administrators. That data combined with information from the SERS annual report and the Illinois statutes governing the pension system provide the information necessary to calculate estimated lifetime pension payouts for current pensioners. Expected lifetimes are based on IRS form 590 actuarial tables. All statements and analyses are based on these data.
“SERS is another example of the state’s inability to live up to the pension promises made to the current 72,005 SERS payees in the third largest statewide fund,” said Jim Tobin, TEF president.”
“Like all of the government-employee pension funds in the state, SERS is bound by law to keep unrealistic promises made to government employees, but it is taxpayers who are forced to fund them. For every $1.00 that SERS members deposited into their own pension funds last year, taxpayers were forced to deposit $7.15.”
By contrast, private sector employees are required by law to deposit a combined 15% of their earnings and employer profits into Social Security for an average annual Social Security pension of about $17,000 if they work at least 32 years and retire at 66 while the SERS counterparts average $34,381 annually for only 24 years of eligible employment and the average age of retirement is 59. SERS pensioners are guaranteed an annual 3% compounded cost of living adjustment (COLA) regardless of market conditions. Social Security COLA is always limited to the consumer price index. The 2018 SS COLA is 2%.
“Illinois is functionally bankrupt. Yes, ‘bankrupt’ is the generally accepted term for the financial state of not having the capacity to meet one’s financial obligations. Across the state, services are being cut because Illinois statute requires pensions to be paid before other obligations and we can’t afford both. Illinois is bankrupt and bloated government pensions are the cause.”
“Here are just the top 5 pensions from SERS.

Name Current Annual Pension Age at Retirement *Estimated Lifetime Pension Payout Employee Contribution % of Lifetime Payout
PARWATIKAR, SADASHIV D $220,267 64 $3,799,680 3.2%
MODIR, KAMAL $199,087 60 $4,091,811 2.5%
VALLABHANENI, NAGESWARARAO $169,830 61 $3,326,371 4.8%
BAIG, MIRZA S $166,605 56 $4,812,251 2.6%
KADKHODAIAN, HOOSHMAND $162,843 61 $3,306,561 5.4%

Click here to see the top 200 SERS pensions
“It is mathematically impossible for Illinois to tax its way out of the pension promises corrupt politicians traded for votes, but that won’t stop the greedy Springfield thieves from trying. Moves are already under way to get a graduated income tax on the ballot, and basic services will be held hostage to ensure they get the votes needed to pass it.”
“Illinois has the highest out-migration in the country right now and we are on pace to lose another congressional district when the 2020 census is concluded. We are bleeding productive taxpayers, which only worsens our problems because there are fewer of us to carry the burden of higher taxes and higher interest on borrowing.”

Democrat Hack Zalewski Prevents TUA Spokesman Zimnicki From Testifying At Committee Hearing

View as PDF
CHICAGO—The Chairman of the Illinois Revenue & Finance Committee, Democrat hack and Madigan puppet, Michael J. Zalewski (D-23, Riverside), refused to allow TUA Director of Outreach, Val Zimnicki, to testify against the proposed state Income Tax Increase Amendment at a Chicago hearing on Wednesday, May 2. This bill, HR 1025, filed by Ill. House Speaker and Chicago machine boss Michael J. Madigan (D-22, Chicago) calls for a graduated state income tax increase for Illinois.
Zimnicki was registered to be among those giving oral testimony in opposition to this state tax increase.
Over 2150 witness slips had been filed to present oral testimony, written testimony, or have record of appearance in opposition to this huge state tax increase.
Zalewski allowed only supporters of the bill to testify before the committee. No speakers opposed to the income tax increase were able to testify, and Zimnicki initially was informed that he was not on the list to testify. After further questioning, it was revealed that he was indeed on the list, but was not given a date and time. It was stated that if TUA was to be heard, it would likely be in Springfield, IL, a 200-mile trip from the May 2 meeting in Chicago.
Zalewski also is a chief co-sponsor of HR 1025. This abuse of power occurred with the support of notorious Taxpayer Traitor David Harris (R-53, Mt. Prospect), who was the Republican Spokesperson for the Committee and who voted to raise the Illinois State Income Tax by $5 Billion dollars.
Despite this silencing of Taxpayers, TUA will continue to spread its message of opposition to higher taxes to fund lavish, gold plated pensions for retired government employees. The Director of Outreach’s written statement can be found below.
“Honorable Chair, and members of the Revenue and Finance Committee, I am Val Zimnicki, Director of Outreach for Taxpayers United of America.
As I look down the road toward retirement, I am struck by how unfair the current Illinois pension system is to the middle class.
As someone who works in the private sector, the most retirement income I can look forward to is about $17,000, from Social Security—if I am lucky to get that much.
In contrast, retired government employees receive lavish, gold-plated retirement benefits, and, as an Illinois taxpayer, I am forced to pay for these benefits through the state income tax.
The current, unsustainable state pension system has created many pension millionaires among retired government employees.
Former Illinois Governor Jim Edgar (R), no friend of taxpayers, is rolling in money, thanks to these Illinois government-employee pension plans. Mr. Edgar gets an Illinois General Assembly pension of $166,000 per year, a State University Retirement System pension of $83,000 per year, and is currently hired-back “part-time” by the University of Illinois for another $62,796 per year—pulling in more than $312,000 per year.
Former Governor Edgar is a pension millionaire. Former Governor Quinn (D) is a pension millionaire. Former Governor Thompson (R) is a pension millionaire. These three so-called ‘public servants’ are going to receive a total of $11,388,000 in pension payouts over their expected lifetimes.
I am paying for their extravagant retirements, because most of the money from the recent state income tax increase is being poured into the insolvent state pension funds that send monthly checks to them.
The State of Illinois is functionally bankrupt, and government-employee pensions are to blame.
Illinois taxpayers are voting with their feet. In 2017, the number of people moving from Illinois to states with lower taxes outstripped arrivals by 115,000. And it will get a lot uglier if the proposed state Income Tax Increase Amendment is passed.
If the state income tax, now a flat tax, is converted to a graduated state income tax, the exodus from Illinois by the middle class will become a stampede. The state will literally go under financially.
It is impossible for the state to tax itself out of its current downward spiral. There is not enough money to go around to pay for its current unfunded pension liabilities of more than $130,000 billion.
There is a solution, and it also involves a state constitutional amendment. The current Constitution must be amended to allow for reasonable decreases in pension benefits for retired government employees.
In addition, all new government hires must be placed in 401(k)-style pension plans, so there will be no increases in the current unfunded pension liabilities.
Thank you for your attention.”
 

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