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It seems like it would make the most sense to implement a progressive tax on pensions. Not sure if the Illinois constitution would prevent that or not.
A progressive tax paid by whom? The general state tax payers? As another Illinois resident said earlier in this thread, most Illinois residents already have an exit plan. Those with money have the best motivations and means to GTFO of Illinois. Illinois is already near the top of the pile with combined state income and SALT in the nation as it is.
Pension and salary reform for new hires, and assessing need for existing positions moving forward is the first baby steps. They cannot even get that done, much less ask the Illinois citizens to pay even more.
I don't know how they are going to end up, but I know I will be watching congress closely (other than the 18 from Illinois)for any "bailout" measures. If we have to bailout Illinois, then all the other badly managed states will be clamoring for their "fair share". The pension deficits in California alone are huge.
If you live in Illinois you should be gathering up your family and belongings and bailing out of the state. It's going to get real ugly there in the not to distance future.
A couple of points that are critically important in this discussion.
1. States cannot legally declare bankruptcy as noted in other posts.
2. You can change the retirement rules for new hires and maybe modify somewhat the retirement package for current employees who were hire under the old system for that part of their service after a law change but you can’t retroactively change benefits for someone who has already retired.
When states were making their required contributions there wasn’t that much of a problem, but when the stock portfolios of the retirement systems were looking solid in the 1990’s governors started purposely underfunding retirement accounts so they could minimize taxes. Once one governor did it, his successors generally follow suit. When the markets fell, so did the viability of the retirement funds. Once they really fell behind, some were lured into highly speculative types of investments that promised big payoffs, but didn’t deliver and just exacerbated the problem.
Now many states have underfunded pension liabilities that they can’t legally shed, and would have difficulty paying without cutting infrastructure or schools drastically.
"but you can’t retroactively change benefits for someone who has already retired."
And if the state chooses to do so, who is going to stop them? It is a STATE issue so going to the feds won't help.
But I am responsible for sending you Corona-Money. Go figure.
Like I said, Trump's bail out is massive, and there has never been a bailout of this magnitude (it's not even close), so of course everyone will ask for some. Most don't even have to ask, they'll just receive a check whether or not their situation has changes.
My household is a net payer in of income taxes so...you personally didn't send me a Coronavirus check.
Covid-19 is a national pandemic and the national government is choosing to send it to the nation as a whole.
Illinois' pension is created by people in Illinois for people who work in Illinois through the Illinois economy.
You honestly don't see the difference?
Or the conflict of interest in if states can be idiotic for decades with their money and the nation is on the hook for it - it sets up and encourages more idiocy from state governments.
I saw the list of biggest pensions in Illinois a few months ago, here on this site. There were hundreds of people whose pensions were more than the Illinois governors salary of $177,000. That is crazy.
I put a link to the last Illinois Pensions thread posted by lovescrowds on Jan 26th. This is where you saw it.
In that thread, I read that every taxpayer in Ilinois would have to pay $78,000/ea. to keep all the Illinois underwater pensions afloat.
Pensioners are going to get burned big time, & Illinois is just the first in a long line of States who have pension issues. Illinois is by far the worst though. Illinois is 24% funded, whereas most experts say pensions should be funded at the 80%-85% level. Very few gov't pensions are at this level.
This is going to become a huge issue in the U.S. real soon when the checks cannot go out.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.
2) The word "funding" with regards to pensions means setting aside money ahead of time as the liability is accrued.
The funded ratio for the five state retirement systems improved slightly to 40.3% in fiscal 2019 versus 40.2% in fiscal 2018.
Private pensions have required funding levels that if you fall below require additional contributions.
Most govt. pensions do not have specified funding levels and are some combination of funding and pay-go from current revenues.
So while the govt. has to PAY them, they absolutely do not have to FUND them like the private ones under ERISA.
Bottom Line: Illinois owes a ton of money because they have not set aside sufficient money to pay pensions accrued in the past. They have not properly funded their pensions and are not a part of ERISA.
I'm so pleased to see that most of us feel the same way. Unfrtunately, in the end, pensioners will get shafted, and those responsible will walk.
Illinois already tried to shaft pensioners and it was found to be unconstitutional. (5-10 years ago roughly?)
So, specific to that situation they're going to have to increase state taxes which they already did once but it sunset after 3-5 years (I forget the exact length of time).
I have 2 relatives currently drawing from an IL govt. pension fund and a handful of others that are current workers. They greatly curtailed the pensions of future beneficiaries but the current recipients have gold plated pensions.
Lastly, a number of pensions have had abuse by the workers where they were based on the last year of income and so "Pete the Chicago Police officer" in his last year of work would do all kinds of overtime, work holidays and so forth to make a ton of money their last year. This results in pensions equal to or even greater than their normal last year of salary. This was done all over the country and most places have closed those loopholes.
The state senate president asked for $15 billion in direct cash or a low interest loan to help with the pension crisis.
A state cannot bankrupt because it has the ongoing ability to cut costs/ raise taxes.
The current governor, the one who preceded him and the one who preceded him are not responsible for the mess.
Illinois is one of 7 states with a constitution that guarantee accrued pensions.
Our current flat rate income tax is one of the lowest in the country among the 43 states that impose an income tax. The real kicker is that public and private pensions are not taxable income.
I live in Illinois and do not think it appropriate for the Federal Government to bail out any state.
I applaud your opinion on this. The fixes are:
-raise taxes
-eliminate all future pensions...is Illinois still promising pensions to new hires?
-offer cash lump sum buyouts to as many as possible to slow the bleeding
-city, counties go bankrupt, and lower the payouts to affordable levels
Look, I'm no conservative, but we should no be bailing out IL. It sets very dangerous precedent, and as a resident of a different state, I can't even vote in IL's elections to have any say in how they run their pensions. It is unfathomable that taxpayers have to pay hundreds, if not thousands of retirees in IL six figure pensions every year for decades. It is not sustainable. IL will go insolvent. People will be trapped there because they won't be able to sell their homes, which will crash in value. The only way to escape the crushing taxes will be to eat a 100% loss on your property and move. But that'll make a lot of people very poor.
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here goes Beach again 
with anotehr one of his pension rants.
