Illinois State budget—we’re #1!
I’ve decided to continue this series on the Illinois budget. When finished, I plan a post or two on Arizona and its new law concerning illegal immigration within the State. Then, I’ll return to previously planned posts.
UPDATE
I received another comment last Saturday from “Anonymous” who then signed at the end of his comment as “Morton Secular Progressive.” I do plan to respond but not until I’ve finished with the Illinois budget and the Arizona law against illegal immigration.
I had computer problems during my last post and only posted a map of the United States showing the % of funding for State pensions. The map is from http://www.illinoisisbroke.com/. According to that map, the State of Illinois can proudly declare “We’re # 1!” Of all the fifty States (Yes, there are only fifty States—not 57!), Illinois has the claim to fame of underfunding its State pension fund more than any other State. According to the map, Illinois in fiscal year 2008 only funded its pension account at 54% of what it should have been. “We’re number one!” “We’re number one!” “We’re number one!”
I’m not very familiar with the State pension system in Illinois but according to the map only 4 States have their pension program funded at 100% or more. Thus, this underfunding is a problem in the vast majority of the States. Of course, according to the map, no State is as underfunded as is the State of Illinois.
(When I was a teacher in Illinois, I contributed to a pension fund controlled by the State. However, when I moved from Illinois to Arizona, I withdrew my contribution from the fund. At that time, I was not allowed to receive the matching fund put into my account from the 2+ school districts that I had worked for while teaching. I also received no interest for the years that my money was in the fund.)
According to a news story published in the Peoria Journal Star on April 10, 2010, page A9, the pension problems in States including Illinois will likely continue into the future.
Some of the information provided includes the following:
“The struggle to fund public pension plans is dogging most states in the country and probably will continue for years before it eases, a new study concludes.
The Center for State and Local Government Excellence (PLEASE don’t study Illinois government!—my addition) said in releasing its report Thursday that the recession and resulting stock market declines hurt the assets of public pension plans while squeezing tax revenues needed to keep up with funding pension obligations.”
“The study looked at both state and local public pension plans in the 50 states. In 2008, those plans collectively had an 84 percent funding ratio, although Illinois notably trailed the field with a ration below 60 percent. (Somewhat of an understatement considering that according to the information from http://www.illinoisisbroke.com/ Illinois is #1 in underfunded pension plans for all fifty States at 54%!—my addition)
A year later, because of the nation’s economic crisis, the ratio of assets to liabilities nationally dropped to 78 percent. (Which no doubt means that Illinois’ percentage also dropped since the State in fiscal year 2009 did next to nothing to lessen the underfunding in the State’s pension program—my addition.) And the study concluded that ratio will continue to drop, even if the economy recovers to some degree.
‘Under the most likely scenario, we see the funding ratio deteriorating to 72 percent in 2013,’ Munnell said.”
“One important thing governments can do to keep from falling further behind, Munnell said, is to pay the full ‘annual required contribution’ into their pension systems determined by actuaries. A major cause (Let’s repeat this beginning—A MAJOR CAUSE—my addition) of Illinois’ pension funding problems is that the state did not always make that full contribution.” (That’s putting it mildly!—my addition)
An earlier column entitled “Let’s cut to the heart of pension reform” published by the Peoria Journal Star on March 28, 2010 page B1 contains the following information:
“To paraphrase Radogno (Republican State Senate Minority Leader Christine Radogno—my addition), many Illinoisans don’t have a retirement plan to look forward to that’s anywhere close to those available to people covered by state plans. Radogno said it becomes a tough sell to convince the public they need to pay more to sustain retirement plans that aren’t available to them and at the same time are better than theirs.” (Do you think!—my addition)
“A public pension does have security. (Does it ever!—my addition) That’s becoming a scarcer commodity for private sector employees. As defined benefit plans (the State pension program—my addition), the state plans make pension payments whether you live one year as a retiree or 40 or more.
For many in the private sector, retirement income will come from a 401(k) or other defined contribution plan. Once the money in them runs out, well, too bad. There’s no guaranteed lifetime income with those. Add to that the fact those plans have taken a beating in the recession, and there’s plenty of resentment over public pensions that look a whole lot better than the private sector ones right now. (And on into the future!—my addition)
Here’s the kicker. The people who were to receive such pensions from the State knew how difficult it is for State governments (especially Illinois State government) to wisely handle money. Consequently, when the State Constitution was rewritten in 1970, State pension protection was written right into the Constitution!
Article XIII—General Provisions, Section 5. Pension and Retirement Rights:
“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
In other words, if the State actually follows the Constitution (which has been known to be a problem), once a pension program is established for the covered workers it can never be less although it can be more for those specific covered workers!
Remember that the State of Illinois is the number one employer in the State. Now do you understand why State workers are demanding that the State increase taxes so that State programs are not reduced? If workers get dismissed, they may have to get a private sector job and lose not only their current paycheck but also a very sweet pension plan. Who wouldn’t want to continue working for the State? Now do you understand why State unions continually demand more and more State programs? Once a program starts, it’s difficult, if not impossible, to end the program and that means a lifetime of employment for their members and sweet pensions at retirement. No wonder the State is the number one employer in the State. It’s a sweet deal for those involved. And the rest of us get to finance it! IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
I’ve decided to continue this series on the Illinois budget. When finished, I plan a post or two on Arizona and its new law concerning illegal immigration within the State. Then, I’ll return to previously planned posts.
UPDATE
I received another comment last Saturday from “Anonymous” who then signed at the end of his comment as “Morton Secular Progressive.” I do plan to respond but not until I’ve finished with the Illinois budget and the Arizona law against illegal immigration.
I had computer problems during my last post and only posted a map of the United States showing the % of funding for State pensions. The map is from http://www.illinoisisbroke.com/. According to that map, the State of Illinois can proudly declare “We’re # 1!” Of all the fifty States (Yes, there are only fifty States—not 57!), Illinois has the claim to fame of underfunding its State pension fund more than any other State. According to the map, Illinois in fiscal year 2008 only funded its pension account at 54% of what it should have been. “We’re number one!” “We’re number one!” “We’re number one!”
I’m not very familiar with the State pension system in Illinois but according to the map only 4 States have their pension program funded at 100% or more. Thus, this underfunding is a problem in the vast majority of the States. Of course, according to the map, no State is as underfunded as is the State of Illinois.
(When I was a teacher in Illinois, I contributed to a pension fund controlled by the State. However, when I moved from Illinois to Arizona, I withdrew my contribution from the fund. At that time, I was not allowed to receive the matching fund put into my account from the 2+ school districts that I had worked for while teaching. I also received no interest for the years that my money was in the fund.)
According to a news story published in the Peoria Journal Star on April 10, 2010, page A9, the pension problems in States including Illinois will likely continue into the future.
Some of the information provided includes the following:
“The struggle to fund public pension plans is dogging most states in the country and probably will continue for years before it eases, a new study concludes.
The Center for State and Local Government Excellence (PLEASE don’t study Illinois government!—my addition) said in releasing its report Thursday that the recession and resulting stock market declines hurt the assets of public pension plans while squeezing tax revenues needed to keep up with funding pension obligations.”
“The study looked at both state and local public pension plans in the 50 states. In 2008, those plans collectively had an 84 percent funding ratio, although Illinois notably trailed the field with a ration below 60 percent. (Somewhat of an understatement considering that according to the information from http://www.illinoisisbroke.com/ Illinois is #1 in underfunded pension plans for all fifty States at 54%!—my addition)
A year later, because of the nation’s economic crisis, the ratio of assets to liabilities nationally dropped to 78 percent. (Which no doubt means that Illinois’ percentage also dropped since the State in fiscal year 2009 did next to nothing to lessen the underfunding in the State’s pension program—my addition.) And the study concluded that ratio will continue to drop, even if the economy recovers to some degree.
‘Under the most likely scenario, we see the funding ratio deteriorating to 72 percent in 2013,’ Munnell said.”
“One important thing governments can do to keep from falling further behind, Munnell said, is to pay the full ‘annual required contribution’ into their pension systems determined by actuaries. A major cause (Let’s repeat this beginning—A MAJOR CAUSE—my addition) of Illinois’ pension funding problems is that the state did not always make that full contribution.” (That’s putting it mildly!—my addition)
An earlier column entitled “Let’s cut to the heart of pension reform” published by the Peoria Journal Star on March 28, 2010 page B1 contains the following information:
“To paraphrase Radogno (Republican State Senate Minority Leader Christine Radogno—my addition), many Illinoisans don’t have a retirement plan to look forward to that’s anywhere close to those available to people covered by state plans. Radogno said it becomes a tough sell to convince the public they need to pay more to sustain retirement plans that aren’t available to them and at the same time are better than theirs.” (Do you think!—my addition)
“A public pension does have security. (Does it ever!—my addition) That’s becoming a scarcer commodity for private sector employees. As defined benefit plans (the State pension program—my addition), the state plans make pension payments whether you live one year as a retiree or 40 or more.
For many in the private sector, retirement income will come from a 401(k) or other defined contribution plan. Once the money in them runs out, well, too bad. There’s no guaranteed lifetime income with those. Add to that the fact those plans have taken a beating in the recession, and there’s plenty of resentment over public pensions that look a whole lot better than the private sector ones right now. (And on into the future!—my addition)
Here’s the kicker. The people who were to receive such pensions from the State knew how difficult it is for State governments (especially Illinois State government) to wisely handle money. Consequently, when the State Constitution was rewritten in 1970, State pension protection was written right into the Constitution!
Article XIII—General Provisions, Section 5. Pension and Retirement Rights:
“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
In other words, if the State actually follows the Constitution (which has been known to be a problem), once a pension program is established for the covered workers it can never be less although it can be more for those specific covered workers!
Remember that the State of Illinois is the number one employer in the State. Now do you understand why State workers are demanding that the State increase taxes so that State programs are not reduced? If workers get dismissed, they may have to get a private sector job and lose not only their current paycheck but also a very sweet pension plan. Who wouldn’t want to continue working for the State? Now do you understand why State unions continually demand more and more State programs? Once a program starts, it’s difficult, if not impossible, to end the program and that means a lifetime of employment for their members and sweet pensions at retirement. No wonder the State is the number one employer in the State. It’s a sweet deal for those involved. And the rest of us get to finance it! IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
IT’S EASY TO SPEND OTHER PEOPLE’S MONEY!!!
posted by Christian Gunslinger at 5:23 AM
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