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To get the Illinois pension back up to par for state employees every person in Illinois would need to chip in $11,000. So a family of 5 would need to chip in $55,000.
Adding to the problem is that the stock market is at near highs and for several years now have had historically high p/e rations suggesting the stock market might be overvalued and due for a crash, which would make the Illinois pension on worse footing.
Illinois' state constitution says that benefits can't be lowered, so unless a difficult amendment happens, there needs to be a dramatic escalation in taxes...
One possible solution floated is that a 1% annual increase in state property taxes to prop up the pension needs to be implemented for 30 years, which would then secure the pension. So someone with a $250,000 would then owe an additional $2,500 every year for 30 years to secure the pension. Foolishly assuming that the home wouldn't increase in value, a $250,000 home owner would end up paying $75,000 to secure the pension over the course of 30 years. The problem with this plan is that Illinois already has the highest property tax average of all states and it might tempt some businesses to leave the state.
This solution would only fix the Illinois state pension and NOT the 650 local pensions in Illinois that are struggling too.
To get the Illinois pension back up to par for state employees every person in Illinois would need to chip in $11,000. So a family of 5 would need to chip in $55,000.
Adding to the problem is that the stock market is at near highs and for several years now have had historically high p/e rations suggesting the stock market might be overvalued and due for a crash, which would make the Illinois pension on worse footing.
Illinois' state constitution says that benefits can't be lowered, so borrowing a difficult amendment, there needs to be a dramatic escalation in taxes...
One possible solution floated is that a 1% annual increase in state property taxes to prop up the pension needs to be implemented for 30 years, which would then secure the pension. So someone with a $250,000 would then owe an additional $2,500 every year for 30 years to secure the pension. Foolishly assuming that the home wouldn't increase in value, a $250,000 home owner would end up paying $75,000 to secure the pension over the course of 30 years. The problem with this plan is that Illinois already has the highest property tax average of all states and it might tempt some businesses to leave the state.
This solution would only fix the Illinois state pension and NOT the 650 local pensions in Illinois that are struggling too.
People in Illinois can always leave, and I suspect some will.
The median home value in Illinois is only $173,165. There are 5,326,970 housing units in Illinois, with 66% being owner-occupied, so assuming the owner-occupied are homes, that amounts to 3,515,800 which would generate about $60.8 Billion in taxes, while at the same time, sucking $60.8 Billion out of the economy.
Of course, such a law would have to be written in a way that prevents the Illinois State government from using that money for something else, and they would, if the law didn't prevent them.
Illinois may be the poster child but it's far wider problem across a lot of the country for local, county and state governments. Most of these problems go back to the early 2000's where a lot of these workers were getting some really good benefits and salaries added.
Understandably the people that have been given these great retirement benefits should be upset when someone wants to take them away, people have made long term plans based on what was promised to them. There really is no good solution for the immediate issues but at some point something has to give.
People in Illinois can always leave, and I suspect some will.
The median home value in Illinois is only $173,165. There are 5,326,970 housing units in Illinois, with 66% being owner-occupied, so assuming the owner-occupied are homes, that amounts to 3,515,800 which would generate about $60.8 Billion in taxes, while at the same time, sucking $60.8 Billion out of the economy.
Of course, such a law would have to be written in a way that prevents the Illinois State government from using that money for something else, and they would, if the law didn't prevent them.
Don't forget, landlords would raise rent if property taxes went up a large amount - passing off much or even all of the cost onto renters and they are looking at raising commercial properties to cover the pension problem too.
Illinois may be the poster child but it's far wider problem across a lot of the country for local, county and state governments. Most of these problems go back to the early 2000's where a lot of these workers were getting some really good benefits and salaries added.
Understandably the people that have been given these great retirement benefits should be upset when someone wants to take them away, people have made long term plans based on what was promised to them. There really is no good solution for the immediate issues but at some point something has to give.
Yes the pension funding crisis is a nationwide issue from the local level to the state level and even up to the national level.
The federal employees have pensions that are way underfunded...and oh yeah social security.
No new taxes, slash services, sell assets and end the pension scheme for new hires. Too bad the politicians that set up these ponzis cant be gone after.
I’m sure the politicians have been robbing that fund for years to pay for other programs for worthless leeches while these state workers did their part thinking there would be a retirement in the end for them. They better start hunting down the guilty parties and putting them in prison.
They will elect Democrat leadership in Washington who will bail ILL out with taxpayer money from the states who elect responsible governance.
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