Even the Democrats in Springfield are seeing that there is little hope for an easy solution to the over $80B pension shortfall, considering the pension calculations are based on a return on investment that is greater than any currently available.
Unions can shout all they want, according to Scott Reeder of the Illinois Policy Institute, in his guest column in the Rockford Register Star, but the unions are partially responsible and played a role in creation of the deficit by agreeing to increases that couldn’t possibly be paid for without large increases in state income taxes.
Scott writes that the pension shortfall was caused by political pandering to the unions with both sides knowing there was no way to pay for the promises made. Even the 67% income tax increase this year wasn’t enough, with most of the increase going to the pensions.
I know few people able to retire in their 50s at three-fourths of their final salary — other than government workers. And that pension grows, compounding on itself each year.
For example, a worker who retired in 1993 earning $53,333 today can expect to collect $72,244 today in pension benefits. And that number continues to grow.
Less than one-fifth of private sector workers receive pensions. Most people rely on 401ks, IRAs or similar plans. No one guarantees us a certain level of retirement income. We are on our own.
Since Obama says the private sector is doing Ok, the taxpayers are the ones who are being forced to make good on the promises of the politicians, even though less than 20% of the private sector employees have a defined pension benefit.
Illinois voters are partially to blame for the broken promises. The voters are after all, the ones who keep voting for Chicago politicians for the statewide offices.
The unions complain that “We faithfully contributed toward out retirement – every paycheck. The legislators didn’t pay their part. It’s their fault and shouldn’t be resolved on the backs of the state employees.”
After all, taxpayers can say the same thing: “We faithfully paid our taxes — every paycheck. It was the state Legislature that skipped pension payments — not us. It’s not our responsibility to solve this problem either.”
The president of the Illinois Education Association, Cinda Klickna, also wrote a guest column in Register Star and writes that a guarantee that the state would pay it’s portion of the pensions is required – a tax increase wasn’t mentioned - but would be necessary.
In all the surveys quoted in the column, the IEA apparently forgot to ask the voters if they would mind another 67% increase in their state income tax to pay for public pensions that the private sector doesn’t even have.
She also believes that closing the tax loopholes on corporations, no pension cuts on current retirees and additional contributions on the part of the employees would raise enough money to reduce pension debt.
That remains to be seen, because government pensions are currently being dumped on the backs of the taxpayers, and just like Social Security, the politicians used the money for other things and placed all our pensions in jeporady. The taxpayers remain the solution for that pension as well.