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 state’s 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.
Indeed:
"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 state’s 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.
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