A measure to nearly double the state income tax is on the table in Springfield.
Gov. Quinn has reportedly reached a deal with leaders in the General assembly to raise the rate on individuals from 3% to 5.25%. The measure could be on the House floor as early as today (Jan. 7).
Anybody going to call their state reps?
Call your state reps.. or pay up
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Sorry, I am in the wrong thread.
Please click on the following link to see an actuarial analysis of the Teacher's pension (TRS)
http://trs.illinois.gov/subsections/pubs/cafr/fy10/actuarial.pdf
if you can wade through it, it is pretty scary.
Skipping pension payments did not cause the problem.
Overly optimistic assumptions caused the problem. Missed payments contributed the to problem, but are just a small piece.
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So, you see the State skipping years of pension payments as compliance? I would agree that it's not against the law, but it's not compliance. My argument is that, at that point in time, the State should have changed the system, but they didn't. I would have had no problem throwing more contributions in, or stopping the current system 10 years ago, and starting a 401k type plan. But that did not happen. The contract is, repeat is, that we work, yes actually work weedhopper, and we were promised a pension. Also, very few people get $100k pensions, so don't pull that.
Let me throw a couple of other things in... I heard that two of our illustrious City Councilmen have defined benefit pesion benefits. So Furstenau and Boyajian, who bitterly complain about pensions actually benefit from the same type of pensions that we are talking about. Are they talking less so that their shareholders can prosper? Probably not.
Let me ask, is it fair that we work all our lives for a pension, planning on a certain amount, then all of the sudden, the State, who wants to spend money on their little pet programs, decides to not fund the pensions, in hopes that investments will rise to cover their mess, the pensions become underfunded and pensioners get their promised pensions cut? What happens to them? They lose their houses? That's fair? Because it heppened to you?
Is it sustainable? No, I agree with you. But I agrue that people knew that. Fix it going foward, but the'll have to eat the mistakes of the past. Now, it's in vogue to complain about it. Policitians caused the problem, now it's a surprise. Back to Econ 101. If you skip pension payments, and the market is a cyclical spiral, then you will eventually have problems.
BTW, your windfall analogy doesn't work. My pension is not unexpected and it is not a profit. It is a pension. I suppose you're saying that we don't work, like the private sector. Can't argue there, all the smart people work in the private sector and the dummies work in the public sector. We all laugh about that at our two hour lunches.
I'm curious, how would you propose to move my pension over to a 401k? I put money in, my employer put money in, there are interest earnings. What would you do with people that are already getting pensions?
Uh, tortise ------ I was just "channeling" your childish post [see tortise replied to comment from channelsurfer | January 12, 2011 9:23 PM | Reply], where you found it necessary to debase the discussion to the level of name calling.
In other words, it certainly seemed like using the 3rd grade playground approach was what you felt most comfortable with, so I was willing to oblige. Perhaps the spittle you see is actually that which was left on your face after your littlse 3rd grade tirade? Yes?
Of course the pension situation is caused by the State, but not for the reason you suggest. The simple fact is that the State is in compliance with all pension laws. The State DID cause it by allowing outrageously rich pensions, whether it be in union negotiations or otherwise, to those receiving the pensions.
Now, as I explained ad nauseum in the earlier post [channelsurfer | January 13, 2011 3:46 PM | Reply], we are at the point of Econ 102. Those who don’t understand this are just a little slow, yes? Anyone who actually believes the taxpayers can continue to fund pensions that pay out30-45 years of pensions per individual at rates beginning at over $100k per year and accelerating each year, in many case along with uber-rich medical programs (see Teachers for an example) has little to no grasp on reality. Using simple compounding to look at the “numbers just a few short years ahead (say, 25 years), one can see that the taxes collected would not even cover the incremental costs of these programs alone!
I will repeat, and stand by, the windfall comment. From the “Cultural Dictionary”, a windfall definition: “An unexpected profit from a business or other source. The term connotes gaining huge profits without working for them”
I would say that an intelligent person looking at this definition would agree with me. I will add that the pensions are so rich that one could not possibly have worked/earned them, and that anyone with even a rudimentary understanding of Econ would not expect such returns.
Will the State fix it? I agree with you that those charged with fixing it also benefit from it, so one should not hold their breath in normal times.
These are not normal times ---- we have already seen headway in the move to change future employees.
The eventual answer/prediction?
The pols will, as you allude, never have the gumption to really fix it by themselves. So, like Utah, any successful State (Illini might not be successful, right?) will have to begin a transfer of pensions over to 401k-type vehicles. Additionally, many of the States that are too late in this move WILL have to enter into a form of bankruptcy where, at a minimum, contracts will be renegotiated so holders can maintian some of their advantage OR a true bankruptcy where everyone goes back to GO and does not collect $200 (or, in the case of many of the pensions, three to four MILLION dollars!).
C S er,
Wow, I can almost see the spit coming out of your mouth as you typed your civil reply. You're not teaching anyone anything. Talk about misguided, the pension situation was caused by the State by not consitently funding them. I have to believe that some smart private sector economist that took more than econ 101 could have seen that underfunding the pensions would have a negative impact in the future. In other words, they knew this would happen. They should have instilled a two-tiered system 10 years ago,
For all of you that think that the State is going to cut pension payments for current pensioners, or those that are under the old plan, you've got to be kidding. They very legisators that would have to try and do that get pensions. It will never pass. Even if they tried the lawsuit would be so massive they'd quit. Or, we could go before judges that get pensions as well. It would all be a big show for the public,
BTW, pensions are not a "windfall." They are planned-windfalls are not-weedhopper. Oh, please pass the gravy.
Well now that he has done this to "pay all his bills" then gee it should not be a problem to cover the new officers (etc) pay raises & bring those layed off officers back!
Please note... as the Anonymous who posted above, I did state at the end
"However, that does not mean that all future public employees should get a pension."
I stated in a later post
"I will agree however, that things have changed considerably for teachers entering the system now. some for the better, some not.
The starting salaries for teachers are far more competitive with the private sector now than they were 20 years ago. Benefits are better. Compensation is better. In that way, things are better."
I realize that things are not the same now as they were 20 - 30 years ago.
I am not advocating in any way that things should stay exactly the same. Things have changed. And as a result, changes need to occur in teacher's contracts too.
Let's also be clear that conditions in 203 are not the standard for all teachers. (Although as a whole, benefits and compensation have improved everywhere.) But many changes do need to be looked at on a district level. The years I spent teaching were in East Aurora, not 203. In fact I used to get frustrated by friends complaining about their jobs in 203 and 204 when they had no real clue what teaching was like anywhere else.They would complain about their computers not being the most recent. I was lucky if I was assigned to a school with any computer at the time. I had first graders who came to school without breakfast and with no one reading to them at home on a regular basis. And honestly at the time, I never complained because every single day I felt I was doing something worthwhile in this world. I loved my little students dearly. And I know that their time in school was the highlight of their day then.
All you pension lovers can whine and complain all you want about how you deserve your great pension, blah, blah, blah. The simple FACT of the matter is, the clock is ticking, the pension bomb is going to go off sooner than later. Start saving your money now because the numbers DO NOT WORK and your pensions will be severely reduced because the tax payers will refuse to continue to pay for it either by fleeing the state or electing reps. that will FINALLY do the right thing. Save now and save hard because the day is coming when the gravy train will cease.
Reply to tortise January 12, 2011 9:23 PM | Reply
Uh, you’re a narcissistic jerk. There, I said it, and I’m glad I said it.
Now, don’t we all feel better? RU proud that you have engaged in the very same level of hateful attack/debate that our President talked to a little last night?
On a more civil discourse, my post addressed NOT “tortoise” (ie you) as an individual ---- it was directed at all (ie a group) who seem to be going down the track that teachers are underpaid, etc. In fact, IF I was addressing an individual post, it would most likely have been those by Anonymous and not yours at all.
However, you preferred to take exception as an individual to a post I made to the collective, and to complicate it further you misread it!
You forgot to read (or absorb) the all-important words “,,,,money IS in the public sector right now” and “….the public sector is now better paid (on average)”.
As you can now read, I am speaking to the PRESENT! I am not caught up in the past (that which was, was!)
Now, read closely here, weedhopper: the current issue is one of basic economics: the dike has broken and we, the people, cannot afford the lucrative (read “rich”) benefits that our elected idiots have laid upon you. It actually is a simple issue of econ 101. The states (Illinois in particular) is broke. We can fix it intelligently now, or at sometime in the future it will break in a way that is very hurtful to those with a state pension (ie you).
Your animosity in addressing those of us NOT in the public sector as somehow having been treated so much better than you in the public sector over the years is not only hateful and misguided, it is actually wrong on the facts. We did not “lose” so much as you have had an unbelievable windfall.
The Dept of Labor has teaching as the highest paid job in the U.S. Why? Well, the D of L puts it into hourly return.
Can we compare what is happening now with 30 years ago? Of course we can. The data is there. Unftunatley, I wass not addressing 30 years ago ---- that was then, this is now. As I said, it is broken and if we don’t fix it correctly, YOU and others in the public sector will be crushed by bankruptcy by the state or something similar.
Believe it or not, me and others like me do NOT want to see you crushed (it sounds like you are in or cl9ose to retirement). I WOULD like to see a lapsing schedule of changes (say, 7 year increments?) that puts the public sector into the same basic playing field as the rest of us: Social Security plus 401k-type retirements.
Simply put, the defined benefit pension is not only dead, it is headed toward bankruptcy and the resulting nothing for the recipients.
For the most part private sector pay, benefits, and retirement are all subject to change based upon "corporate policy" and economic times.
From a basic perspective of fairness, equity, and just to be competitive all public sector pay, benefits, and retirement should be subject to the same economic pressures.
There should be no perception of "entitlement" by public employees.
With the growing deficit and unfunded pensions what is going to have to happen to government is the same thing that happened to private sector businesses that were saddled with horrific union pension. Every level of local and state government and every department of these levels of government are going to be cleared out through contracted services, outsourcing, and insourcing. The only actual employees that will remain will be those who for whatever reason can not be shed to the private sector... and those are few and far between.
It will take time and it will be a slow and orderly transition, but it is coming because there is no alternative to resolve the unfunded pension debacle. The only way to fix it is to permanently shed employees and the sooner they can be shed before they "earn" any vested interest in retirement the better off we all will be.
The benefits of existing employees still need to be addressed and reformed so that pension benefits are adequate not gold plated. Further reform will still be needed to address those government employees hired in the future.
It's kind of a bitter sweet situation... the existing legions of government workers have ruined it for all future generations of government workers because of their greed and sense of entitlement. At the same time we will learn that we didn't need any where near as many government workers as we thought we did AND we will come to learn that it will cost us far less to get the same work done through the competitiveness of the private sector while making a profit... mostly because the private sector will only be willing to pay true market rates and benefits and employees doing this work will have to produce at a reasonable level of productivity or face the consequences.
Thousands of government workers across this state should be very nervous about their once cushy and secure future and they only have to look to themselves for reasons why.
Tortise wrote: Some of you gambled, and lost. Some of us lucked out-because we thought about serving the public not ourselves. Now you're all crying.
xxxxx
While "some" public servants chose their career route in order to truly serve the public, a vast majority chose the public sector route in order to get a job, meet obligations, and have a guaranteed job and pension. There are many reasons other than financial for choosing a career path. You make it seem like someone chooses either to serve the public OR serve themselves? Good vs. Selfish.
Your comment on private sector people "crying" over the current situation falls on deaf ears. The public sector is rife with complainers and criers. We see it any time someone dares try to hold public servants accountable.
There was a time when private sector jobs paid more than public which is why we see disparity. For someone (female) wishing to raise a family after graduation they would most likely be drawn to a profession like teaching that allows them summers off, holidays, etc. It also allows for leaves of absences without a dramatic sacrifice to one's career. The private sector is not like this. Ask any of your friends at Arthur Andersen what their career would have been like if they took 10 years off to raise their kids!
Uh, you're an idiot. My point is that there was definetly a time when the private sector paid more than the public sector. Look at the data. That private sector benefits and retirement were better. Look at the data. Some of you gambled, and lost. Some of us lucked out-because we thought about serving the public not ourselves. Now you're all crying.
Could I have worked in the private sector? Of course. I have an engineering degree and an MBA. I chose not to. I'll have a $100k/year pension and the city I worked for paid for my MBA. Not unlike many private sector jobs back in the day.
You can't compare what is happening now with 30 years ago.
For the people who are getting close to collecting on their pensions, the big money at the time they started out was in the private sector.
As a former teacher (who will not collect a pension since I did not stay in the career long enough) my starting salary was $10,000/year. My husband's starting salary in the private sector at the time was over two and a half times that. After 20 years in business, his earnings are still more than double what I would be earning if I had stayed in education. (That would have been at step 20 + a Masters degree.)
I will agree however, that things have changed considerably for teachers entering the system now. some for the better, some not.
The starting salaries for teachers are far more competitive with the private sector now than they were 20 years ago. Benefits are better. Compensation is better. In that way, things are better.
The job itself? I think it is far more stressful now for teachers than it was when I started.
Why do many keep referring to "going for the big money" route in the private sector?
The implication appears to be that the public sector is not big money.
Uh, can you read? Do you research data? If you can and do, then you realixe that the big money IS in the public sector right now!
Getting back to teachers, do you have ANY idea what the average salary is here in 203 for a partial year? Do you know what the pension is for someone retiring at the end of this year at age 55 with 30 years in?
The bottmline is that the public sector is now better paid (on average) than the private sector, has RICH pensions and medical benefits that the private sector does not get, and have created an abuse to our economic system that cannot be maintained.
Many people in the public sector could "cut it" just fine in the private sector, but their priorities took them a different route.
And many people in the private sector chose to take the big money route, and now are complaining about the things they didn't get as a result. (Pensions, job security, etc.)
Let's face it... it is all about choices. And each choice has its different advantages and disadvantages. But when the choice is made, the things that were part of those choices should continue. So those who were promised pensions and have paid into their pensions systems should reap the benefits.
However, that does not mean that all future public employees should get a pension.
Tortise,
So why couldn't YOU get a job at some place like Arthur Anderson and make the huge money too?
There are a huge number of people in government who couldn't cut in the private sector and for some insane reason they thing they deserve more.
(call your state reps...thread)
Higgins isn't the only one misunderstanding savings......from the Trib.
Yeah...we already got a tax cut.
Quinn is great!
Gave us the Chocolate cake! (sorry, Mr. Cosby)
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Funny, a lot of you know seem to know more about my pension than I do. I remember when I started in government 30 years ago, I asked, what's IMRF? I never thought much about it. My friends were working at places like Arthur Anderson, making huge money compared to me. Now you're all writing in this blog about how bad public pensions are.
The best state government we had that I can remember in recent years was when Jim Edgar was Governor (Sorry, Jim Thompson was no saint either.). Why? Because he was from central Illinois, so him and Mayor Daley/Mike Madigan did not "get along". When Edgar left, the state had just over a one billion dollar surplus.
Fast forward through the last two governors (Ryan was a RINO) and Illinois today is a cesspool of corruption and a socialist crud-hole (you can use your imagination to replace the word "crud"). If it was easy, I would leave this state as fast as I could. Basically, the private sector works for the public sector and it is getting worse. Go ahead and raise that corporate tax rate and make Illinois even more hostile to business. Great Job!
I hope people are happy that Bill Brady lost because of his "extremist views". Please. Do you think any governor, including Brady, would have had time for his "views" with state in the financial mess it is in? The finances and day-to-day running of the state is all anyone would have time to do for years to come.
http://money.cnn.com/2011/01/10/news/economy/california_budget_Jerry_brown/
Why can't IL do this? Start at the state level, then cut at the city and school level too.
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So, if I understand you correctly, you want to tax tax-deferred retirement benefits; e.g., traditional IRA's, traditional 401k's, and pensions (no matter who the employer).
I can see that as a method of supporting state government. It's fair. It's universal. It's a rational classification. It might be a good idea.
The reason we keep electing these idiots is because so many citizens are on the publicl dole in one form or another that they will NEVER vote Republican. No real point calling your Naperville elected officials, they won't vote for this anyway. Instead I called Quinn, Madigan, and Cullerton and gave them my opinion.
(Call your state reps.... thread)
By the way, I am NOT advocating taxing pensions.
I AM advocating taxing pensions if the nutjobs in Springfield feel it is necessary to raise the income tax and corporate tax rate in Illinois.
In that circumstance, I am advocating taxing pensions consistent with states around us.
Many states exempt military and SS (or have a high cutoff). SS is taxed on the way in so not taxing it on the way out is not crazy. Illinois State pensions are not taxed on either end. I would see as fair NOT taxing pension payments which are taxed on the way in, but DO tax pension payments which are not taxed on the way in.
If there is true belief that we need to close a massive budget hole, taxing pensions needs to be on the table.
I know some mealy-mouth politicians will claim that State Pensions cannot be reduced or harmed, but the pension is not being reduced or harmed. It is fully there. It is now being seen as what it is in most other states-- income.
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Just so that there is no misunderstanding, are you advocating taxing:
- All retirement payments received from all sources (social security, IRA's, 401k's, private pensions, public pensions, etc.)
- All pension payments received no matter who the employer was.
- Only government pensions
We are putting our home on the market and getting out of this worthless state as fast as we can. Can't afford the cost of living with the criminals running Illinois.
"Political suicide for anyone who votes for this!"
What a joke. The majority of voters in Illinois have shown that they will keep electing Democrats. Don't know if Republicans would do any better, but I wouldn't mind seeing them get a chance. Seems that the last fiscally responsible governor was a Republican that inherited a mess and cleaned it up. Hope it happens again, but we'll have to wait four years to see if it is possible. By then, too much damage will have been done by our liberal tax and spend friends.
When Quinn was running for re-election didn't he promise to veto anything above 4%?
My take on this is the Dems deliberately spread talk about a 5.25% tax rate and then muddy the water about it being temporary and let everyone get all riled up over it.
Then the Dems will come back after all of the talking heads eat their lunch over the tax hike with a new number which will be the original 4% Quinn wanted in the first place and all of the jerks will be so relieved that it isn't 5.25% that they will think it is a great deal...
Only that the 4% will slide through as a permanent tax hike instead.
Wait and see.
It will not pass.
They will argue, bicker, wring their hands, and agree to "help the little guy" by keeping the increase to "only" 4%.
Thanks, jerks!
Now, for those that read the WSJ, there was a great article on Tuesday ("The Blue Men Group") that addressed the dismal state of disarray of California, Illinois, and NY.
The only things that made Illinois a better place than Cali or NY for business was the lower personal income tax and corporate tax.
The solution by the idiot known as Quinn?
Why, raise both the personal income tax and the corporate tax! Brilliant!
Quinn will NOT BE OUTDONE BY EITHER CALIFORNIA OR NEW YORK! WE WILL BE #1 IN SOMETHING (even if it is "dismality")
How in God's name were we stupid enugh to actually elect this dull-thinking idiot? Anyone?
Political suicide for anyone who votes for this!
(Call your state reps.... thread)
http://www.cga.ct.gov/2010/rpt/2010-R-0119.htm
This is a nice summary of what other states do for pensions. While I am not a fan of increased taxes, especially without a legitimate plan for decreased spending, I am going to use the link above to request that Pensions above a certain amount be taxed at some rate at least during this (hahahaha) temporary increase being suggested. SS is taxed on the way in, so not taxing SS benfits could make some sense.
For this not even to be on the table for the Dems is embarrassing.
-1 -- who will try to use the thread name or acronym at the start of my posts.
TAX PENSIONS FAIRLY
Anybody going to call their state reps?
yes.
I know we don't need yet another pension thread, but if the state is going to jack up income tax rates to 5.25%, "temporarily", then it should impose the same tax on pension benefits "temporarily".
If not the full 5.25%, maybe just a 2.25% income tax on pension benefits for the next 4 years.
That's fair.
Aren't pensioners going to benefit from the other provisions of the tax hike like property tax relief? If so, then they are getting a complete handout by not having to pony up income tax.
The only way for the new tax hike to be sunsetted is to tie it into the groups who have the numbers to complain the loudest.
Lacking such an amendment, Quinn and the Ds are frauds. Maybe the Rs can suggest this as an add-on.
Or they can introduce this in the next session.
(note: I am clearly against the 5.25% income tax, but I am also pragmatic and realize it will pass, so we might as well try to make it less unfair.)
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