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Effingham and Jefferson County Gov. Pensions Consuming Taxpayers’ Dollars

By temp-admin on December 15, 2015 / Illinois, Latest, Pension Reform, Taxpayer Alert

View as PDF Effingham, IL—Taxpayers United of America (TUA) today released the results of their study of the government pensions for Effingham and Jefferson Counties, as well as Effingham and Mt. Vernon municipal and local government schools.
“Well over 500 government retirees in Effingham and Jefferson counties will receive multi-million dollar pension payouts over the course of their lifetime. Thirteen government retirees currently collect pensions in excess of $100,000 annually and 341 receive annual payouts greater than $50,000,” stated Jim Tobin, TUA president. “The pensioners’ average personal investment is only about 5.4% of the lifetime pension payouts.”
“While taxpayers work well beyond retirement age to keep their families afloat, these government pensioners enjoy lavish, gold-plated retirements beginning, on average, at the age of 58. In fact, according to our data, more than 500 of the government retirees in Effingham and Jefferson counties retired in their fifties, and in some cases, decades before average taxpayers can consider retirement.”
“The sheer number of government pensioners in Illinois, not to mention the amount of taxpayers’ dollars they collect, is staggering,” said Tobin. “Consider that the taxpayers who fund these government pensions receive Social Security benefits of only about $15,000 a year on average. This year, nearly a third of Illinois’ 100,689 retired government teachers collected pensions higher than their average highest pay while employed. Their pensions averaged $9,674 above the final average salaries of those retirees, totaling nearly $294 million.”
“House Speaker Mike Madigan (D) is once again calling for hiking Illinois’ personal and corporate income tax rates in an attempt to solve the state’s financial woes he created, but he and his aligned cronies won’t tell the truth about how your tax dollars are spent. Madigan and his partisans won’t tell you that their last 67% income tax increase was a complete failure. The 2011 income tax hike collected nearly $32 billion for the Illinois state government, but almost 90% of those funds went into the government pensions and the crisis is nowhere near averted. And to make matters worse, local governments are continuously seeking to raise property taxes – and it’s not ‘for the children!’ as we are incessantly told. In reality, nearly 80% of local taxes go to fund salaries and benefits of government employees. Between the state and local government revenue schemes, taxpayers have much to worry about financially.”
“There are now well over 12,154 Illinois government pensioners collecting more than $100,000 annually and 85,893 government pensioners collecting more than $50,000 annually! And these numbers only pertain to the state pension funds and don’t include any of the hundreds of local police and fire pension funds, so the financial trouble Illinois is facing is even more shocking.”
“Retired Mt. Vernon School District 80 government employee, Kevin L. Settle enjoys an annual taxpayer funded pension of $126,133. Over a normal lifetime, he will get about $4.8 million in pension payments. His personal investment in this rich pension is about 4.3% or $207,616.”
“Gary D. Duncan retired from the Jefferson County government and his current annual pension is $131,953. He will collect about $3.5 million while he only put in $177,218 of his own money, slightly more than one year’s pension payout. That’s a 5% investment in his own multi-million dollar retirement payout!”
Click to view our complete government pension data for:

“The best solution for government pension reform in Illinois, although difficult, would be the repeal of the Illinois Constitution’s pension provision protecting them from being ‘diminished or impaired.’ In the meantime, the Illinois General Assembly should increase individual government employee contributions to their own gold-plated pensions by 10 percentage points. This would save taxpayers about $150 billion over the next 35 years, or about $4.3 billion a year, and save Illinois from financial ruin.”
“Right now, most government school teachers don’t pay the 9.4% required contribution to their own pension, and taxpayers in those school districts pay a portion or all of the teachers’ pension contribution through higher property taxes. Having employees make the required contribution would save taxpayers roughly $500 million in property taxes annually. And if all else fails, there is always the option of moving forward with legislation to begin the process of allowing municipalities and government schools to file for Chapter 9. Taxpayers must pursue these paths forward and any other options that reverse the course toward disastrously higher taxes in the immediate future,” said Tobin.
“Rather than finding ways to perpetuate this horrible system that places copious amounts of cash in the hands of bureaucratic hacks, rank and file government pensioners should be calling for the complete reform and conversion to 401(k) style defined contribution pension funds that place employees in control of their own futures. How many times will we trust politicians to ‘do the right thing’ with the tax money collected for pensions?”
“The choice is clear: without sweeping, meaningful pension reform, residents of Effingham and Jefferson counties, and nearly every other part of Illinois, will have to choose between fully funding the pension systems to pay for past services rendered, or pay for the services we need today,” concluded Tobin.
*Lifetime estimated pension payout includes 3% compounded COLA and assumes life expectancy of 85 (IRS Form 590).

Busting Tax Schemes for Decades

By temp-admin on December 10, 2015 / Items of Interest, Latest, Taxpayer Alert

View as PDF Chicago—Taxpayers United of America (TUA) have fought against higher taxes, reckless spending, and government largesse for nearly forty years. As we look back at our decades of activism and education of taxpayers, TUA is releasing some footage from our archives featuring our president and founder, Jim Tobin.

In April of 1991, Illinois State Senator Richard Luft (D-Pekin) sponsored a 20% increase to the Illinois state income tax. The bill aimed to raise $1 billion in state income taxes, and as is now commonplace in Illinois, the legislation was sold to the media and the public as the solution to the state’s financial problems. But Jim Tobin, TUA president and founder, knew better.
Tobin created a campaign called the Luftbusters to travel around the state and encourage taxpayers to fight back against Illinois’ largest tax increase, State Senator Richard Luft’s 20% state income tax hike. The legislation included the elimination of some property tax deductions and making the temporary state income tax surcharge permanent.
Government unions and teachers argued that schools would not survive without the state income tax hike. But Tobin saw this claim as just another way for the government schools to expropriate more taxpayers’ dollars.
“That is the best remedy for the educational problem we have here in Illinois: tuition tax credits and vouchers. And let people use their own money to put their children in the school of their choice,” said Tobin. “There is no correlation between spending per student and academic performance.”
The 20% state income tax hike was supported by the Taxpayers Federation of Illinois, Civic Federation, Chicago Mayor Richard Daley, Illinois Chamber of Commerce, Illinois Manufacturers Association, Illinois Retail Merchants Association, Chicago Association of Commerce & Industry, Illinois Farm Bureau, Illinois Education Association, and the Illinois Municipal League.
Despite the best efforts of Luftbusters and taxpayers around the state, the state income tax increase was eventually signed into law by Gov. Jim Edgar (R). The $1 billion in new state income taxes did nothing to solve Illinois’ financial problems.
After dutifully aiding the passage of the state income tax hike, and rather than facing angry taxpayers at the polls, State Senator Luft accepted an appointment as state banking commissioner by Gov. Edgar in 1993. Business as usual for Illinois politics, unfortunately, but it doesn’t have to be this way.
Real reform was needed in 1991 – and real reform is still needed today.
Taxpayers United of America is here to fight for you.

Chicago Teachers Union Threatens Strike: For the children or the tax dollars?

By temp-admin on November 4, 2015 / Illinois, Items of Interest, Latest, News Releases, Pension Reform, Taxpayer Alert

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CHICAGO — Chicago Teachers Union (CTU) President, Karen Lewis, and Vice President, Jesse Sharkey, warned CTU members this past Monday to begin saving at least twenty-five percent of their pay “to weather what could be a protracted strike.” This Thursday, November 5, CTU will conduct “an official ‘practice’ strike vote and contract poll in all CPS school buildings,” further setting the stage for an actual strike in the coming months.
Taxpayers United of America’s (TUA) director of operations, Jared Labell, calls CTU’s brazen threat to strike both wildly misdirected and counterproductive for solving the financial fiasco in the Chicago Public Schools, Illinois’ most beleaguered school district.
“Karen Lewis led CTU’s last strike in 2012, declaring it a victory for teachers and students. But even by CTU’s standards, it’s difficult to see how they consider thousands of laid-off teachers and employees, plus dozens of shuttered schools in the interim three years a success, and that’s all prior to the newly proposed cuts by CPS CEO Forrest Claypool, which would take place in early 2016,” said Labell.
CTU has prepared for a possible strike since their contract expired June 30.
Revived talk of a teacher walkout comes mere days after the Chicago City Council approved Mayor Rahm Emanuel’s historic three-quarters of a billion dollars tax increase, which included an unprecedented property tax hike totaling $588 million dollars to fund the Chicago police and firefighter pensions, and pay school construction costs. But even with the historic property tax hike and other fee and tax increases, the infusion of taxpayer dollars will not approach the billions of dollars needed to correct Chicago’s financial footing.
Yesterday, the Chicago Tribune reported that nearly three dozen Chicago high schools are less than half full, which represents an extremely costly problem for CPS in terms of property holdings, maintenance, and administration, but it is simply business as usual for the government unions and their fellow travelers. Every once in a while, however, even they will admit that the system is unsustainable when held to the same standards as found in the free market:

“You have to administer a building, whether a school has 20 kids or 2,000 kids, you got to have a principal. School districts have a lot of fixed costs,” Charles Burbridge, executive director of the Chicago Teachers’ Pension Fund, said during a recent meeting of the Tribune’s editorial board.

“It’s like, I often say, look at school districts, and essentially they’re like a hotel chain. If you’re not running 80 percent capacity and utilization of your hotels, you’re going out of business,” he said. “Well, CPS is not running 80 percent capacity in its hotel, and it can’t go out of business.”

“The fact is, CTU leadership have been awful stewards of the Chicago Public Schools and their students. The union bosses continue to push for raises and lax performance evaluations in the face of abysmal academic progress for students, ballooning debt, and profligate spending, all the while resisting reforms to their bureaucratic fiefdom and their lavish taxpayer-funded pensions,” said Labell. “And I don’t think CTU will win over many parents of students by approaching the situation as they have. The Chicago Public Schools are basically a government monopoly, top-heavy with exorbitant salaries, gold-plated pensions, and redundant bureaucracy, but they don’t seem to reconcile that with the financial reality average students and families are facing.”
Chicago teachers receive an average salary of about $70,000 annually for nine months of employment, while the per capita income for Chicagoans is less than half of that, and nearly a quarter of the city is below the poverty level.
“My heart goes out to the least affluent families in Chicago, who have little choice in competing educational alternatives. These families are forced to hand over their hard-earned money in the form of property taxes to fund the vast government-education empire housing Chicago’s children like prisoners,” said Labell.
“Perhaps taxpayers should counter CTU’s threat of a teacher strike with a taxpayer strike. If CTU and CPS are not onboard to enact significant structural changes to the heavily indebted and liability-laden district, then Chicagoans should stop enabling them with taxpayer dollars, like one would stop funneling whiskey to a drunk. The question is how badly Chicagoans will feel once the party is over and the well is dry, because either way, the hangover is coming. It’s only a matter of when,” concluded Labell.

Taxpayer Alert

Effingham and Jefferson County Gov. Pensions Consuming Taxpayers’ Dollars

Busting Tax Schemes for Decades

Chicago Teachers Union Threatens Strike: For the children or the tax dollars?

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