Illinois

[Alaska Darin]

I was reading an article about the current governor wanting to raise income taxes 50% (from 3% to 4.5%) because the state is running out of money and is going to have to cut teachers, police, and fire. They aren't offering to cut political staffs or perks for the elected (of course). So I did ONE Google search to see how big a problem government worker pensions were in the great state of Illinois. Enjoy.

 

Business Week

 

Take Illinois. The fifth-wealthiest state in total income, Illinois nevertheless has a 30-year history of shirking its pension promises. According to an analysis by the Civic Federation, a Chicago research group sponsored by the business community, since 1970 Illinois has not once paid its annual pension bill in full. Over the next 40 years the state will have to contribute $275.1 billion if it is to reach its goal of 90% funding -- and that's presuming no benefit changes are made. Through bull markets, bear markets, and sideways markets, the state has consistently lagged, and over time those delays have become more and more expensive. The culprit: reverse compounding. A pension plan's obligations are determined in part by the expected investment return on its assets. In the case of Illinois, that is 8%. So for every dollar not added to assets in time, the state is effectively borrowing from the pension plan at 8% interest. That's a high price in today's market, where municipal bonds typically pay closer to 6%. Illinois Governor Rod R. Blagojevich says that if the state follows its current spending plan, it will have paid $220 billion in interest before it fills the hole.

 

After 30 years of the state's procrastination, the pension burden has grown backbreaking. Illinois' five pension funds are $35 billion in the red, a serious shortfall for a state with a general operating budget of $43 billion this year. Illinois owes $2.6 billion this year, and within five years that will reach $4 billion annually. By comparison the state will spend $5.9 billion total on kindergarten through 12th-grade education next year. "If we were a business we wouldn't be in Chapter 11, we'd be in Chapter 13," says Ralph M. Martire, executive director of the Center for Tax & Budget Accountability, a Chicago-based nonprofit think tank. "We'd have to liquidate." Illinois is not a fast-growing state that can hope that future population and tax growth will bail it out. D'Arcy of the University of Illinois calculates that Illinois should be 97%-funded based on the rate of its income growth. Instead, retirement funds are 62%-funded.

 

The challenge to fixing the state's pension mess is, again, politics. Right now the halls of the state legislature in Springfield are a lobbying battleground between proponents of a plan proposed by the governor to cut benefits for new workers and union-led forces opposed to such a two-tier system. In many ways, the union argument is quite persuasive: State workers in Illinois have perks that are generally in line with or even a bit below those of other state's civil servants. Workers have consistently made their contributions to the pensions -- it's the state that has failed to pay its share. And Illinois has an antiquated tax system that probably is holding revenue down.

 

Over the years, even as the state failed to pay for existing pension promises, the Springfield politicians HAVE ADDED MORE. In the past 10 years benefit sweeteners have added $5.8 billion in new benefits, largely through early retirement inducements. And there has been a general creep up in the level of promises made. Today, one-third of Illinois state employees get hazard rates of pension payments originally intended only for state police, according to the governor.

 

Elected officials are hesitant to ask the rest of their voters to pay for these promises through higher taxes. One primary reason: Outside of government workers, very few employees have these kinds of deals anymore. "Our people at 55 years of age can get 75% to 80% of their salary [as pension], and it's a pretty nice salary," says Illinois State Representative Robert S. Molaro, a member of a commission convened by the governor to make recommendations for fixing the pension system. "It will be hard for us to go to the taxpayers and ask them to pay for our pensions with benefits you in the private sector couldn't even dream of."

 

Since this article was written 5 years ago, I did another internet search to see how much worse it's gotten since. The pension fund deficit has grown nearly 50%. From $35 BILLION to $85 BILLION. BTW, this is the kind of thing that happens when you use government math projections for budgeting. Welcome to the real "Clinton Economy".

 

C'mon liberals. Make excuses for this garbage. Then tell me how we're going to be able to put the government in charge of health care and save money.

 

In the time it's taken you to read this (assuming you've gotten this far), the state of Illinois has fallen about $15,000 further in debt.

[John Adams]

I'll pile on by resubmitting this gem.

 

http://www.usatoday.com/news/washington/20...-salaries_N.htm

 

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

 

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

 

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

 

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

 

This is why I keep advocating a wholesale incumbent dump. Government is BROKEN.

[VABills]

Save the carp.

[ExiledInIllinois]

Save the carp.

 

Bump.

 

You forgot to add:

 

"...Feed the world!"

 

God, guys.. Thanks, I need the love!

 

I wish I got paid by the state and not the DoD!

[ExiledInIllinois]

I'll pile on by resubmitting this gem.

 

http://www.usatoday.com/news/washington/20...-salaries_N.htm

 

 

 

This is why I keep advocating a wholesale incumbent dump. Government is BROKEN.

 

Would those jobs be done by pencil necks looking to catch the carp?

 

150k?? I get paid by the DoD... Where can I find one of those jobs... Oh, wait... Those must be the "Golden Tier" executive jobs... What is that GS 15 or something?

 

I am just a simple working slob hourly wage grade (not GS) employee... I gotta find me one of those DoD jobs!

[KD in CA]

Go Government Employee Unions!!

 

 

In many ways, the union argument is quite persuasive: State workers in Illinois have perks that are generally in line with or even a bit below those of other state's civil servants.

 

This is a persuasive argument? That a group of mostly-useless bureaucrats should be given even more money while the state is going bankrupt because some other group of mostly useless bureaucrats is even more grossly overcompensated?

 

Welcome to 21st Century logic in America.

[ExiledInIllinois]

Go Government Employee Unions!!

 

 

 

 

This is a persuasive argument? That a group of mostly-useless bureaucrats should be given even more money while the state is going bankrupt because some other group of mostly useless bureaucrats is even more grossly overcompensated?

 

Welcome to 21st Century logic in America.

 

I agree. If most of the bureaucrats had to get a real job... Actually had to do some work for a living... They would be helpless. You should see the **** that goes on among the pencil pushers at the gov't level... Why in the !@#$ would an office worker need a union? Or get paid overtime? I know where I work, management (can't be in the union) gets overtime... WTF is up with that? Shouldn't they be salary and get comp time if anything?