Illinois Public Pensions, Municipal Bankruptcy and Illinois taxes

The unfunded liabilities facing government pension plans have gained increased public scrutiny during the past year. Governing entities and taxpayers are beginning to recognize the potential consequences of public pension liabilities. Headlines have exposed municipal bankruptcies, such as Detroit and numerous cities in California. In some extreme cases, pension liabilities have been one of the key drivers for municipal bankruptcy filings and reduced pensions could wind up as the solution for the budget shortfall. Current data indicates that...

read more

Illinois public unions will sue regardless of pension plan chosen

James McNamee, President of the Illinois Public Pension Fund Association, wrote in response to Scott Reeder’s column, Don’t worry about pension lawsuits; worry about savings, that “An unconstitutional reform is no reform at all. It might feel good to all those who have been advocating that public employees are the problem. Not the fact that not paying what you were supposed into the retirement system.” It’s not that public employees are the problem; it’s that the legislature over the years has voted for pensions that are...

read more

Illinois, like the U.S. government has spending problem

A recent post discussed the perennial debate between those who advocate for smaller government and those who advocate for bigger government. The debate usually centers on the question, “Does the government have a spending (debt) problem or a revenue (income tax) problem?” The U.S. government has seen its revenues increase in the last five years from $2.015T to $2.9T, an increase of almost 38% or 7.5% per year, while federal government spending increased over 8% on top of the revenue increase, for a total increase in spending of...

read more

The case for choosing Social Security benefits at age 62

Many Social Security experts opine that if you don’t need the money now, and you are in good health, then their advice is to wait at least until you are 66 years old, or 70 years old if you can, to receive higher benefits. The experts say that by waiting, you earn a higher monthly benefit, and that benefit, like all Social Security retirement benefits, is indexed for inflation. So waiting helps ensure you have more money in your later years. But these experts also stipulate that government studies show that retirees, on average, receive...

read more

HB2375 makes Illinois 67% income tax increase permanent

Illinois temporarily raised its income tax from 3 to 5 percent in 2011 and has put nearly all of our new tax dollars into its failing pension system. Next year the state will spend almost as much on its five pension systems as it does on education. HB2375 was introduced February 20th in the General Assembly in Springfield by Representative Lou Lang, D-Skokie, to make that income tax increase permanent. The tax was scheduled to be reduced in 2015. Workers would be required to pay 3% more of their salaries toward their pensions and their...

read more