Skip to comments.Illinois Legislature Approves Benefit Cuts in Troubled Pension System
Posted on 12/03/2013 3:51:53 PM PST by Oldeconomybuyer
The Illinois legislature on Tuesday ended a day of emotional debate and fierce back-room arm-twisting by passing a deal to shore up the states debt-engulfed pension system by trimming retiree benefits and increasing state contributions.
With the most-broken state employee pension system in the nation some $100 billion in arrears Illinois has been the focus of intense attention across the country as states and municipalities struggle to come to grips with their own public pension problems. The compromise reached in Illinois, a staunchly blue state with a strong labor movement that had successfully resisted previous efforts to trim pensions, could provide a template for agreements elsewhere.
(Excerpt) Read more at nytimes.com ...
They cut nothing.
“increasing state contributions”
Higher taxes on the eeeeeevil rich, no doubt.
I think I see the problem here.
Well now we know a City can file for bankruptcy.
What happens when a State files for bankruptcy?
We will bail out the “pensioners” as they say in the old country, and once again there will be no consequences to bad behavior.
This is probably window dressing; expect it to be restored piecemeal over the next several years.
Of course Detroit is down to about two-thirds of a million people, so on a per-capita basis, they are basically hopeless—$30,000/person. Of course, we all owe more per person on the federal level.
"The savings were to come from curtailing cost-of-living increases for retirees, offering an optional 401(k) plan for those willing to leave the pension system, capping the salary level used to calculate pension benefits and raising the retirement age for younger workers, in some cases by five years. In exchange, workers were to see their pension contributions drop by 1 percent."
"...agreed on a plan that they said would save $160 billion and erase the states pension debt by 2044."
Every bit of the "savings" will no doubt be incurred in the very late out years.
The whole thing is a sham.
I have predicted where this is going.
The vital Democrat electoral states of Cal, Ill, and NY are gonna get federally guaranteed state bonds.
“No such beast exists...State bankruptcy is not allowed under the Constitution.”
Bankruptcy is where you run out of money... The constitution has nothing to do with it.
State bankruptcy is not allowed under the Constitution.
See Tue WSJ editorial; this is LESS then a fig leaf.
Far off topic:
Armed robbery at the pizza hut Roselle,IL.(Lake st.)
Have heard ZERO? Only a case number at the crime site listed by village hall.
No need for bankruptcy.
Cali, Ill, and NY are all in big trouble, and will be bailed out by the fedgov.
They are the cornerstones of Democrat electoral strategy.
The bailout will be in the form of federally guaranteed state bonds.
Hawaii’s solution to their problem, as bad as any state, is to fund pension and benefits FIRST, starting in 2020.....when our current crook will be termed out of office - he’s already bought his next election by lavish state union increases. Not much about this in the slavish press. I guess, starting in 2020, we eat cake.
State bankruptcy is not allowed
Broke is broke, whether you allow it or not.
Haven’t heard about it either and I don’t love very far from there.
“What happens when a State files for bankruptcy?”
I’ll tell you what ought to happen-—since the other states have to shoulder the extra burden, the bankrupt state should lose its franchise to federal representation in DC, including the electoral college.
I had a conversation with a teacher who crowed that her pension is “guaranteed under the Illinois Constitution.” I replied “So when the state has no more money why don’t you take your copy of the Illinois Constitution down to the bank and try to cash it.”
That shut her up.
I would add that in our life time time a major world power went out of business, that was the USSR. Not having rules didn’t stop it from happening.
We woke up one morning and poof, no more USSR.
“Not true, it is just that there are no rules for it............”
Yeah, when a given state runs out of money, no matter what the Constitution says (or fails to say), that state is bankrupt. We’ve already flirted with this situation here in California when a couple of years ago, the state held onto people’s state income tax refunds and issued warrants to some of their vendors.
This will happen again, not only here but in other deep blue states. Maybe when the vendor who supplies the toilet paper to the government refuses to send them any more on the pad, they will finally figure it out. Maybe Iowa will ship corn cobs as a cheap substitute.
Yes, I recall from the thread on the comic book dealer.
? Question ? Are you by chance the proud owner of the nice large NO TO CHINA sign in 60172?
I drive that road on occasion; it’s very nice.
They can't; they have to roll up their sleeves and make the hard choices. States can't print money.
No, that isn’t me. But I know where you are talking about.
On the one hand, a state can't file for bankruptcy.
On the other hand, a state doesn't need to file for bankruptcy, because it has sovereign immunity, and thus cannot be sued unless they choose to allow it.
As far as I know, it can just declare "Sorry, not going to pay our state bonds. Sucks to be you."
In the case of toilet paper shortages...you always have DIM campaign literature available.
“Illinois, a staunchly blue state”
Look at any map of Illinois voters and you will see we are a RED state, but Chicago and Cook county cancel out the whole rest of the state. Well, and Springfield, which has about 200,000 Gub’mint workers (exaggeration).
Of course you are correct. It is even written in the Illinois Constitution, that benefits cannot be reduced or reconciled.
This will be overturned by a court here.
It is all posturing.