Press

Wirepoints|The Illinois Municipal Retirement Fund’s Shameful Bragging Tour – WP Original

Taxpayers United of America was quoted about the IMRF pensions by Wirepoints.


“Gall: Brazen boldness coupled with impudent assurance and insolence.”
–  Merriam-Webster Dictionary
By: Mark Glennon*
IMRF, the Illinois Municipal Retirement Fund, went on a “statewide informational tour” last week. It was basically a brag fest. Illinois taxpayers should be appalled.
IMRF is the second largest pension fund in the state. It covers 100,000 employees and retirees of 3,000 Illinois municipalities who are not policemen, firefighters and those covered by state pensions. Among its boasts is that it will be reducing contributions made by municipal employers from 11.73% of payroll to 11.34%. Also, it’s “well funded,” in its words — about 87 % funded — far higher than most state and municipal pensions in Illinois.
Here’s why taxpayers should find IMRF’s grandstanding galling:

  •   If you’ve been wondering why Illinois has the highest property taxes in the nation, often exceeding a suicidal four percent, count IMRF as one reason. IMRF is unique among Illinois state and municipal pensions because it’s empowered to force municipalities to raise property taxes to keep its funding up. That crowds out money for libraries, roads, schools, you name it. Taxpayers pay $2.50 for every $1.00 that IMRF member pay into their pensions, far higher than is typical in the private sector. Most IMRF retirees get Social Security, too, into which both they and municipalities contribute. For IMRF, municipalities around the state don’t face the impossible choice of either underfunding or raising taxes to cover contributions — as they do with police and fire pensions. IMRF just sends a bill for whatever it takes, which goes into property taxes.
  •  Even with its comparatively high funding level, IMRF is still short about $5 billion, which taxpayers will be on the hook for. Dropping employer contribution rates means little with taxpayers in hock for that $5 billion plus whatever else accrues.
  • IMRF offers its members, in addition to their pension, a “guarantied” 7.5% annual return savings account, effectively at taxpayer expense. As any saver today knows, guarantied long term rates are far lower than that (under 2.7%). Guess who guaranties the difference? Property tax payers. As with the pension obligations, IMRF can force automatic property tax increases as necessary to cover that savings account. We wrote in detail about those 7.5% accounts earlier.
  • IMRF members also get a “13th payment,” notorious in the pension world. That’s a sort of bonus check once a year in addition to their monthly pension payments, paid entirely by taxpayers, according to IMRF’s site.  It cost $42 million last year. A coalition of public unions gloated two years ago about killing a bill that might have ended it.•  IMRF’s accrued pension benefits have been growing at the pace of 7.2 percent a year since 2000, according to the Illinois Policy Institute, far faster than the 2.3 percent rate of inflation and beyond what city taxpayers can afford.
  • IMRF attributes its supposed success largely to the Tier 2 pension reforms, which it praises. They should be embarrassed if that’s what’s helping them look good. The Tier 2 pension reforms of 2010 are a disaster. They were “bulldozed through” the legislature by House Speaker Michael Madigan with no understanding of the consequences. Tier 2 employees — those hired after 2010 — pay in the same portion of their paychecks even though the cost of their benefits is 40% less than Tier 1 employees because Tier 2 benefits are far less than Tier 1’s. We’ve written in detail about the myriad problems in the Tier 2 “reforms,” linked here, here and here. The General Assembly has a legislative task force trying to figure out how to fix Tier 2 problems. We haven’t heard a peep on that, probably because they are stumped.
  • IMRF continues to peddle numbers about its positive economic benefit, but it looks at only one side of the equation. Eighty-five percent of its retirees remain in Illinois after they retire, supporting the the creation of nearly 16,000 jobs and $600 million in additional salaries, it gloats. Yeah, well, 100% of that money would have been spent in Illinois had municipalities been able to spend it on other services and there’s no reason to think that any fewer jobs would have been supported had the money been left with taxpayers to spend as they choose. IMRF measures only one side of the issue.
  • Why did IMRF, alone, get the right to force funding to keep it relatively healthy while cops and firefighters in many towns an cities face the certainty of having their pensions go broke? Who knows, but maybe it had something to do with mayors, county board members and other top brass politicos being in IMRF.
  • “Spiking” — jacking up end-of-career pay in order to artificially jack up the pension — is a recurring problem with IMRF members. The General Assembly is now considering special legislation to try to control it.
  • Members are supposed to work a minimum number of hours per year to get a pension, but questions persist about how well that’s enforced. As reported last week, some members of one county board weren’t even aware of that requirement.

The press is routinely suckered by IMRF’s propaganda. WTTW’s Chicago Tonight show has featured, at least twice, IMRF representatives showboating as a model as a successful pension, and they go unchallenged. The Rockford Register Star last week praised IMRF, saying it puts other pensions to shame. (They also repeated the absurd myth that 80% funding is healthy for a pension.)
IMRF is no model pension. It is, as Taxpayers United of America put  it, “the gold standard in taxpayer abuse.”
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.
 
 

Northwest Herald|Voter advocacy groups to host home rule event in Woodstock

Taxpayers United of America’s President, Jim Tobin, was quoted by the Northwest Herald about his speech on May 11th about “Home Rule is Home Ruin”


WOODSTOCK – In response to a special census that could result in Woodstock’s recognized population growing above 25,000 and giving the city home-rule status, a taxpayer advocacy group will give a presentation about the effect home rule could have on the community.
Taxpayers United of America President Jim Tobin will present “Home Rule is Home Ruin” at 7 p.m. May 11 at the Woodstock Public Library, 414 W. Judd St. The presentation will examine what changes home rule brings and how they affect local taxpayers.
The home rule designation gives local government more control over matters ranging from taxation to licensing to regulating the protection of the public health, according to the Illinois Constitution.
Voters in Action requested Tobin’s presentation, said Joe Tirio, founder and Republican candidate for McHenry County recorder. The group has become a vocal critic of home rule based on its effect on the city’s ability to create and raise taxes.
“Given that dramatic change, we felt it was important to bring this to the residents,” Tirio said.
Woodstock city officials have responded to concerns by saying 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.

Madison Record|No exit strategy from Illinois budget standoff

Director of Operations for Taxpayers United of America’s, Jared Labell, had his letter to the editor about Illinois’ budget featured by Madison Record.


To the Editor:
Eight members of Illinois’ General Assembly met on Monday at a forum to discuss the state’s prolonged budget impasse. Although the legislators agreed in general that reforms are necessary to break Illinois’ budget gridlock – now in its 10th month – there was no indication that the Illinois General Assembly, or these officials in particular, had formed a clear exit strategy.

The Illinois Budget: Defining & Funding the Essential Priorities, organized by The Illinois Campaign for Political Reform and Truth in Accounting, featured Representatives Bellock (R), Crespo (D), Davis (D), Harris (D), Morrison (R), and Pritchard (R), as well as Senators Murphy (R) and Steans (D).
Sen. Murphy and Rep. Morrison both called for amending the Illinois Constitution’s government-employee pension protection clause to solve the state’s towering unfunded government pension liabilities, which was the best measure offered at the forum, although also the one with the greatest difficulty to pass. The most worrying proposals for taxpayers were only abstract, and the suggestions varied, including increasing sales taxes or expanding the sales tax base, a graduated state income tax, hiking the state income tax, and imposing a new income tax on retirement benefits.
Tax hikes, however, will only worsen Illinois’ economic standing at a time when there is an opportunity for systemic reform of the state government.
It’s commendable for these members of the Illinois General Assembly to voice their concerns over the broken budgeting process in Springfield and speak out against their leadership. But words cannot compare to the very concerning numbers facing Illinois taxpayers, like a $10 billion deficit by summer, Illinois recording its 14th straight budget deficit, and the lowest credit ratings and the worst-funded government pension system in the country.
As related by the legislators, the degeneration of politics in Springfield is alarming, yet unsurprising; like a low-intensity conflict of news conferences, press statements and canceled meetings since Governor Pat Quinn (D) was thrown out of office by Illinoisans in favor of Bruce Rauner. The two entrenched sides, Speaker of the Illinois House Michael Madigan (D) and Governor Bruce Rauner (R), are both steadfast in their opposition to the other.
“I think this has been portrayed largely as a battle of wills between the governor and the speaker,” said Sen. Murphy. “And the reason for that is because it largely is,” drawing laughs from the crowd.
Madigan is protective of the political machine he has built while pillaging Illinois taxpayers for the last half-century, so he is willing to play hostage-taker over the budget with the constituency groups he has fostered, from teachers and colleges to government employees and social services organizations. But Rauner is willing to play the long-game, too, and seems quite ready to stake his governorship on reversing decades of cronyism and mismanagement throughout Illinois’ state government.
Taxpayers must be vigilant in holding members of the Illinois General Assembly accountable, especially at this unprecedented time without a state budget and as we approach the new fiscal year. Now is the time that legislators could propose the most dangerous solutions to the state’s financial crises, including hiking the state income tax or imposing a new, devastating income tax on retirement benefits.
If this forum was any indication of what’s currently happening – or not – in Springfield, then Illinois taxpayers should be distressed. There is no consensus developing to solve the budget impasse. The FY2016 gridlock could possibly be prolonged past the November elections and well into the FY2017 budget battle. All sides are at a standoff and there is no exit strategy, so taxpayers must make their voices heard and the politicians in Springfield react.
Jared Labell
Taxpayer Education Foundation

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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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