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HomeIllinois NewsHundreds of public pension millionaires live in southwest Illinois, new report says

Hundreds of public pension millionaires live in southwest Illinois, new report says

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MADISON COUNTY – As if the Chicago area's pension situation isn't dire enough, hundreds of public pension millionaires are living in Illinois' southwest section, a new report by Illinois Policy Institute says. These pensioners paid a fraction of their salaries towards what they are accumulating in retirement. State taxpayers' incomes and properties are being taxed more and more to keep up with the demands now growing exponentially.

Illinois Policy Institute's Brad Wiesenstein writes:

Southwest Illinois’ 492 six-figure pensioners have received $612.5 million in pension benefits combined. Meanwhile, those retirees contributed a combined $74.3 million to the pension systems – just 12 percent of their total retirement benefits. The rest of their benefits come from taxpayers and investment returns.

That might be a great deal for these retirees, but taxpayers can’t afford to shoulder the costs. Excessive pension benefits are simply unsustainable in a state carrying between $133.7 billion and $250 billion in unfunded pension debt. Pension and health care costs for government workers now eat 25 percent of the state’s general fund revenues. At the local level, the growth in pension costs is driving municipalities– such as Peoria and Harvey– to lay off municipal workers, including police and firefighters, and to hike property taxes.

In a state with nearly 7,000 units of local government, it should come as little surprise that there are 667 government pension systems in Illinois. Even the smaller pension systems subject taxpayers to tax hikes. In 2017, for example, the city of Belleville’s police and fire pension obligations drove the city to increase its property tax levy by $1.2 million.

He makes the following recommendations to at the very least begin to stop the bleeding: 

Illinoisans’ tax burden will only increase as pension costs continue crowding funds out of municipal budgets. To deliver tax relief, and restore retirement security for government workers, state lawmakers must amend the Illinois Constitution to allow for the following reforms:

  • Increase the retirement age for younger workers.
  • Cap maximum pensionable salaries.
  • Replace permanent compounding benefit increases with true cost-of-living adjustments, or COLAs.
  • Implement periodic COLA holidays to allow inflation to catch up to past benefit increases.
  • Enroll all newly hired employees into 401(k)-style retirement plans, similar to what’s available to state university employees, which would ensure government worker retirements are predictable and sustainable going forward.

More HERE.

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10 COMMENTS

  1. All those suggestions are good, but as it’s been proven in the past, the Illinois Supreme Court won’t allow anything in the current pension agreement to be changed.
    How does that get fixed? I don’t know… A state Constitutional Convention comes to mind, but considering the current stranglehold the Democratic party has on state and local government, I can only see things getting worse.

  2. Jack Roeser – proprietor of his South Elgin manufacturing firm, and of the very useful Family Taxpayers Network (before his “libertarian” son and heir, pulled the plug on it) used to point out, that in some Downstate towns, the wealthiest person is a retired public school superintendent, with a pension, sometimes reaching $300k a year.
    But, in fairness to these public schoolteacher grifters, at least they remain in Illinois.
    Most of the others, take their pension boodle, and hotfoot it out of Illinois, so that they don’t have to pay the exorbitant Illinois taxes – that support their very AFT union pension con-game.

  3. Most new state employees are not getting it.
    However, I don’t know about legislators, judges and police and how much, if any, the pensions for new employees have been reduced.
    If anyone knows what they are talking about on this issue, let the rest of us know.

  4. The solution is to privatize the now public sector jobs. Those vested will get accrued benefits but the benefit package will no longer grow. There is o reason the vast majority of positions cannot be privatized.

  5. It does not take a constitutional convention to amend the constitution. All it takes is for the legislature to place an amendment on the next statewide ballot and then let the people vote on it. The Supreme Court is not disallowing the constitution to be changed. Rather it is disallowing any legislation that is in conflict with the current constitution. If it was constitutional to add the pension amendment in the first place it is constitutional to change or even remove it.

  6. What about teachers, legislators and judges exchanging public sector benefits for federal benefits (Social Security, hence Medicare eligibility) The amount of Illinois pension benefits unloaded on the federal government is an issue that is being swept under the Illinois pension fraud rug.

  7. The obvious first step is a phase out of new people in the pension scam.
    I have recommended for years all new public sector Illinois employees including cops, firefighters, teachers, administrators, state employees, municipal employees, legislators, judges etc go to IRAs or 401ks or FICA. That means no new employees in the scam.
    This is first step.
    Next step is pensions need to be paid from local budgets especially teachers. These school board set salaries which effect pensions but they do not take financial responsibility.
    Problem is unions won’t go for it
    You cannot but votes with out promising these “deferred wages.”
    Yes DEFERRED WAGES.
    that’s promising money from future budgets and tax payers with no plan to fund or pay for it.
    1st step, eliminate all new pensions.