Madison Record|Report: Union employee funding practice costs taxpayers

Taxpayers United of America’s Executive Director, Jared Labell, was quoted by Madison Record about the cost to taxpayers for union fundings.

CHICAGO – A recent report reveals the legal practice of “official time,” under which government agencies pay staff on a full-time basis to work for a labor union rather than for taxpayers, comes with a hefty price tag.
“Although the record keeping isn’t perfect … the estimates of costs to taxpayers range from roughly $1 billion in the last 20 years at the federal level alone, to numbers approaching $1 billion annually when state and local employees are included in the totals,” Jared Labell, executive director of Chicago-based Taxpayers United of America, told the Record.
Labell said the Civil Service Commission instructed government agencies to authorize the practice of official time beginning in 1976. The practice became law in 1978 under the Civil Service Reform Act (CSRA).
He said the fight for transparency is as old as the CSRA itself.
“In recent years, the Bush administration finally required detailed reporting of official time and the activities conducted, but that was just as the administration was preparing to vacate the White House, and the Obama administration’s Office of Personnel Management ceased to report data,” Labell said.
The Americans for Limited Government Foundation produced a summer 2016 report titled “Full-time Official Time: A Special Report Exposing Taxpayer-Funded Union Employees.” The report said that 490 individuals had been disclosed as a result of Freedom of Information Act requests as working full-time for a union using taxpayer dollars.
Specifically, the foundation reported the Federal Aviation Administration (FAA) in the U.S. Department of Transportation is paying 26 full-time official time employees a total of more than $3.6 million, with 24 of those employees earning annual salaries in excess of $100,000.
The foundation reported the U.S. Postal Service disclosed 274 of its employees are on full-time official time status, at a total cost to the agency of $16.5 million; the Department of Agriculture is paying 29 official time employees more than $2.2 million; the Environmental Protection Agency is paying 73 official time employees more than $8 million and the Small Business Administration is paying two official time employees a total of $199,644.
Also, the foundation reported the General Services Administration pays 17 salaried official time employees a total of more than $1.6 million; the Department of Energy pays two official time employees a total of $304,701; the Department of Education pays three official time employees a total of $286,115; the Department of Labor pays 17 official time employees a total of more than $1.6 million and the Department of Commerce pays four official time employees a total of $373,055.
Finally, the foundation reported the Department of Homeland Security pays 39 official time employees more than $2.7 million and the Department of the Interior pays three official time employees $263,873 in total.
The most recent report published by the Office of Personnel Management in 2012 revealed the federal government had spent more than $157 million on salaries of official time employees.
“The figures referenced above are but a small piece of the total cost associated with the practice of federal agencies providing labor unions with free employees,” the foundation said in its report. “This is a large problem.”
Labell said 47 state constitutions currently prohibit using public expenditures to aid private entities and that some lawmakers have proposed legislation that would enact a federal gift clause to prohibit similar issues.
He said the only benefit for agencies that pay employees to perform union work is a political one.
“Taxpayer-funded salaries should not enable government unions to grow their power and influence to further extract tax dollars from the public, yet that’s exactly how the system works,” Labell said.

Madison Record|TUA: Retired state leaders living high off the hog at taxpayers expense

Taxpayers United of America’s Executive Director, Jared Labell, was quoted by Madison Record, IL Senate Republican Press, and Wire Points IL about TUA’s recent release of the 10th Annual Illinois State Pensions Report.

The great promise of financial security in retirement is being threatened amidst an aging population and Congress tapping into and making use of federal Social Security trust funds for other purposes, according to Taxpayers United of America (TUA).



In Illinois, the situation is even more dire because private sector workers and taxpayers must support lavish public sector pension plans, the group says.
A total of 15,661 Illinois state pension plan participants are receiving more than $100,000 a year in retirement payouts, according to TUA’s 10th annual analysis of state public sector pension plans. A total of 92,386 are receiving more than $50,000 a year, analysis shows.
Those figures do not include police and fire department employees, which are funded at the local level.
In a recent press release, the TUA points a finger at former Governor James R. Thompson who raised Illinois personal and corporate income tax rates 20 percent in 1983 and 1989.
The TUA says that as of this year, Thompson is due to receive $147,477 from his state pension plan. A 3 percent cost of living adjustment (COLA) added another $4,424 to that as of July 1.
In stark contrast, those on Social Security will receive a COLA of just 0.2 percent for 2017 – an average annual increase of $24 based on a $1,000 per month payment.
That’s nearly 185 times less than what Thompson receives, TUA director of operations Jared Labell told the Record.
He also said that Thompson isn’t the only state official who helped enact tax policies that ultimately created excessively high-value state pension plans from which he or she benefited.
Labell said that in the near future the TUA will be analyzing the benefits received by other state officers who are responsible for the tax policies that support the benefit plans.
In some instances, he said, state pensioners recoup all the money they plowed into state pension plans during their working years in just one year after retirement.
All this is taking place as the state’s five major public sector pension plans sink under the weight of promised payouts they cannot meet, he said.
The threat of bankruptcy looms as ¨all of them continue to rack up unfunded liabilities,¨ Labell said.
Taxpayers United identifies IMRF (Illinois Municipal Retirement Fund) as the ¨gold standard¨ among Illinois public sector pension plans. Yet, IMRF’s self-disclosed funded to unfunded liability ratio stands at 87.3 percent, which ¨still leaves it billions of dollars in the hole – $4.8 billion,¨ Labell pointed out.
Compounding the problem is that that the returns on investment pension plan managers project are typically around double what they actually turn out to be, he continued. Taxpayers are on the hook and wind up making up any shortfalls.
He said that state revenues are being diverted to meet public sector pension plan payouts. That’s threatening municipalities’ ability to provide basic, essential services in some cases – public lighting, law enforcement and education, LaBell said.
Illinois ¨has the worst funded pension plans in the U.S.,” Labell said. “The number thrown around is that they [the state’s largest pension plans] have at least $111 billion of unfunded liabilities.¨
An estimate by Chicago-based Truth in Accounting pegs the figure at close to $200 billion, he added.
What’s been happening amounts to a systematic redistribution of income and wealth in favor of state elected officials and public sector employees at the expense of all those who work in the private sector, he said.
¨State pension and salary increases are far outpacing those in the private sector…What we see is a widening gap in the distribution of income and wealth. Only a fraction of the workforce are receiving increases while the mass of the workforce is paying for their lavish retirements,¨ Labell commented.
What should, and can, be done?
Labell said that a good first step would be to improve public transparency, public pension accounting rules and standards, and how estimates of future returns on investment are derived and calculated.
¨Most of the time ROIs are placed in the 8 or 9 percent range, but in reality they are closer to 3 or 4 percent,¨ he said.
Furthermore, pubic sector pension funds need to adjust to the realities of today’s aging demographics, and they need to catch up with changes private-sector pension funds made decades ago, he said.
That includes shifting from defined benefit to defined contribution plans, such as corporate 401K plans, LaBell continued.
¨We don’t necessarily fault public sector employees for taking jobs that promise lucrative pensions in retirement,” he said.
“We certainly understand, and can appreciate, that point. But there’s no talk of making changes for new hires, or at least offering the option of 401K plans. And that’s potentially disastrous for taxpayers and future retirees, who may not see pension payouts in future years.¨
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Madison Record|Two SIU retirees among top 400 pensioners in the state, report says

Taxpayers United of America’s Executive Director, Jared Labell,was quoted by Madison Record about the recent release of TUA’s 10th Annual Report of Illinois State Pensions.

Two Edwardsville pensioners, whose combined annual pension is almost $476,000, made the top 400 in Tax Payers United of America‘s 10th Annual Report of Illinois State Pensions.
More than 15,000 state pensioners in Illinois each collect more than $100,000 a year while more than 92,000 annually collect more than $50,000, according to the report issued June 23.
“Nearly 75 percent of these top government pensioners are collecting more than $200,000 a year in taxpayer-funded pensions,” Taxpayers United of America Executive Director Jared Labell said in the press release that announced the report. “These government pensions accumulate to multi-million dollar payouts over a natural lifetime, and for many government retirees, they will collect more than their total contributions to their pension fund while employed within two years of retirement.”
Taxpayers United of America is a Chicago-based tax watchdog group that was founded 40 years ago this month.
The report analyzes data from 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).
Taxpayers United of America is not the only group pointing to pensions as a contributing factor in the state’s present financial crisis. Southern Illinois University Paul Simon Public Policy Institute Director David Yepsen told the Madison – St. Clair Record earlier this month he predicted it taking several years of bringing pension deficits into balance.
There also has been an analysis of how much taxpayers in Madison County would have to pay if they were to fund existing pension debt. Tax bills would at least double, that analysis showed.
The Taxpayers United of America report lists actual pension amounts, particularly those paid to the top 400 pensioners in the state.
Labell said that it is difficult to break all those figures down by county and determine how much Madison County taxpayers contribute toward the pensions of those 400 and more.
“Unfortunately, the six pension funds (five state funds, plus IMRF) did not provide sufficient data to accurately breakdown all of the pensioners by county,” Labell said. “However, our research shows that there are about 300 government retirees in the Madison and St. Clair area collecting pensions of at least $100,000 annually. While those are staggering numbers, the six-figure threshold isn’t enough to be included on our list of Top 400 pensions. Nearly our entire list contains pensions in excess of $200,000.”
Among those 400 are David Werner and Morris Cooper, both retired from Southern Illinois University in Edwardsville, who are No. 76 and 156 respectively on that list and who draw their pensions via the State Universities Retirement System.
Werner, chancellor of Southern Illinois University from 1998 to 2004, receives an annual pension of $252,704, more than the $246,018 he contributed to the fund, according to the report. Cooper, who remains professor emeritus in the University’s Medical Microbiology, Immunology and Cell Biology department, receives an annual pension of $223,187, slightly less than the $226,656 he contributed to the fund, according to the report.
“Nearly 90 cents of every income tax dollar sent to Springfield during the 2011-2015 67 percent income tax hike went to funding the state pensions,” Labell said. “So taxpayers in the Madison County area are losing out with the rest of the state.
Taxpayers United of America also suggests some solutions in the report, including short-term and long-term policy changes.
“Firstly, the defined benefit pension system is always a financial risk, so defined contribution 401(k)-style plans are preferable, and new hires should be transitioned immediately,” Labell said. “Current employees should also be allowed to transition to these new plans. Decreased cost-of-living-adjustments are necessary, as well as increased retirement ages and contribution totals to their own government pensions.”
Long-term solutions must include amending or repealing the pension-protection clause, Article XIII, Section 5, of the Illinois Constitution to make substantive changes to the government pensions in the state, Labell said.
“Allowing municipalities, school districts, and other taxing districts to reorganize through Chapter 9 bankruptcy is another option to protect taxpayers and restructure unfunded liabilities,” he said. “Federal legislation to expand the US bankruptcy code would preempt state level prohibitions to making necessary reforms and override the Illinois Constitution’s pension-protection clause. This is the most difficult but systemic reform of Illinois’ unfunded government liabilities.”



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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