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I voted no, but if the federal government is going to bail out IL and CA, then they should lose their electoral votes until every penny is repaid. Bailouts of IL and CA are probably inevitably given their bloated pension systems and who's in charge there. The voters don't seem to care either, as they keep mindlessly returning Democrat supermajorities to the legislature.
The Federal Government would have to put in place a body to make all financial decisions for Illinois as well as to oversee the day to day operations of the state. They do this with cities like Atlantic City when they go bankrupt. The Governor and state legislature would answer to this group.
Goodnight - how did PA address their pension problem?
Informed Consent - yowser, your tax bill sucks. Thanks for posting it as it's interesting to see exactly where the funds go.
They went to a hybrid plan for defined benefit/contributions for most employees.
Quote:
Pennsylvania state lawmakers Thursday passed a pension reform bill that will save about $5 billion by incorporating features of both defined benefit and defined contribution plans.
I believe that Rhode Island did the same but some states don't have the latitude because of their consitution.
Members of the state’s House of Representatives followed the Senate by passing the bill, 143-53. Most state employees and all school employees hired after Jan. 1, 2019, will get half their pension benefits from the existing defined-benefit plan and half from a new 401(a) defined-contribution benefit plan, according to Pensions & Investments. Employees in high-risk jobs like police and corrections officers will be able to retain their defined-benefit plan.
Actuarial projections, especially ROI, have missed the mark for serious decades.
The state Constitutiin compels a flat tax. Illinois is one of a handful of states with a flat versus progressive tax rate.
It's my understanding how state pensions have been calculated has had a greater impact than the what. Endless historical games have been played to goose pensions that are not found elsewhere.
Public pensions and unions have an inherent interest in mismanaging pensions.
#1 They expect a rate of return that is higher than can be expected. This is because they want to prop up unrealistic pension payouts versus what is actually being put in. "Put in a little, promise a lot" is a great short term philosophy. Long term, like in Michigan they just assume that they will get bailed out.
#2 Politicians will look the other way as the pension is required to invest in local bonds so that they can keep deficit spending easier with lower interest rates (increase in demand means bond rates fall) and the union gives kick backs to the politicians for looking the other way come campaign donation season.
#3 The Unions that get to help manage these charge high management fees.
#4 You win more votes as a Union leader or to the management of the pension by making unrealistic promises of benefits.
Actually the mechanism appears to be maintaining too low a tax system for decades. So it is low taxes that has damaged Illinois. The pensions do not appear to be excessive.
Are you in favor or opposed to taxing sufficiently to meet obligatlions?
Reform was attempted.
Taxes were increased. Intention was to trim accrued pensions. Politicians who raise taxes tend not to get reelected. The state Supreme Court ruled against touching accred pensions. Both the current governor
( Republican) and mayor of Chicago ( Democrat) were devastated by the ruling.
Had people been taxed sufficiently all along, its likely pensions would not have been so generous. That actuarial projections were so off, for so long, added further challenge.
You cannot change the past.
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