As Illinois continues to lose population (we are now the sixth largest state, not the fifth), our politicians in both parties continue to run up debt and unfunded liabilities.

Here is Meaghan Kilroy writing at Pensions & Investments (www.pionline.com):

Illinois has the highest pension burden among all 50 states, said Fitch Ratings’ 2017 state pension report released Tuesday.

According to the report, Illinois’ unfunded pension liabilities amounted to 22.8% of residents’ personal income at the end of fiscal year 2016, compared to a median 3.1% for all states and 1% for Florida, the least burdened state.

Since it is the Christmas season, I chose not to title this article “The Dumbest People in America.” But how else do you describe a state that has 25 percent of its budget going to pay government employee pensions and its voters who continue electing the same people who won’t do a thing about it? And “[u]nder Fitch’s calculations, Illinois’ net pension liabilities totaled $151.5 billion at the end of fiscal year 2016.” Please know that other sources calculate that number as substantially higher.

The Wall Street Journal recently featured a related article titled “Illinois Drives People Away: The taxpayer migration continues from the Land of Ever Higher Taxes.”

Makes you proud, doesn’t it?

From the Journal article:

The Prairie State lost a record $4.75 billion in adjusted gross income to other states in the 2015 tax year, according to recently IRS released data. That’s up from $3.4 billion in the prior year. Many of the migrants were retirees who often flock to balmier climes. But millennials accounted for more than a third of the net outflow in tax returns.

. . .

Too much for us to distill in one editorial, but suffice to say that exorbitant property and business taxes have retarded economic growth. Illinois’s corporate tax rate is 9.5%, and pass-through business owners pay 6.45%. Though Illinois’s flat 4.95% income tax rate is relatively low compared to its neighbors, Democrats have found other ways to clobber their citizens.

You can let your eyes glaze over at these numbers if you want, but understand that you will be paying more every year if you do.

To paraphrase one radio talk show philosopher — we should all be able to tie half of our brain behind our back and still realize something is amiss.

This helps explain why Illinois’s economy has been stagnant, growing a meager 0.9% on an inflation-adjusted annual basis since 2012—the slowest in the Great Lakes and half as fast as the U.S. overall. This year nearly 100,000 individuals have left the Illinois labor force. The University of Illinois Flash Economic Index, which measures corporate earnings and investment as well as personal income, hit a five-year low in October.

Merry Christmas! Feeling poor yet? Well, at least we know our retired government employees will be enjoying the holidays.

In a recent op ed, Illinois policy experts Ted Dabrowski and John Klingner put it rather simply when referring to what Illinois politicians are increasingly good at: “they offer government worker retirement benefits that are no longer affordable to the residents that pay for them.”

Illinois News Network recently quoted State Sen. Dan McConchie, R-Hawthorn Woods:

Whether it’s through their property taxes or because of the recent income tax increase, they just can’t afford to [stay here].… This day of reckoning is fast approaching us. I don’t think we want to wait until the absolute last minute to try and do everything we can to really right the ship.

Allow me to define reckoning: It is time to stop talking about “reforming” the government employee pension systems in Illinois. You cannot reform what is purposefully corrupt and completely insolvent.

The Illinois Constitution’s line prohibiting the lowering of government employee benefits should be ignored if it’s not repealed. No clause in a constitution can make this math work. The systems should be cut off from the taxpayers and sent into bankruptcy.

Any candidate suggesting that the pension systems can be reformed is not telling you the truth.

Happy New Year!

End-of-Year Challenge

As you may know, IFI has a year-end matching challenge to raise $160,000. That’s right, a great group of IFI supporters are colluding with us to provide an $80,000 matching challenge to help support IFI’s ongoing work to educate, motivate and activate Illinois’ Christian community.

Please consider helping us reach this goal!  Your donation will help us stand strong in 2018!  To make a credit card donation over the phone, please call the IFI office at (708) 781-9328.  You can also send a gift to:

Illinois Family Institute
P.O. Box 876
Tinley Park, Illinois 60477

Last time when we focused on the writings of government employee compensation expert Bill Zettler, I failed to mention that Bill had some great lines over the years, such as:

“Economics always wins.”

Despite the wishes and dreams of people on both the political left and political right, the day of accounting always comes. We are at that day right now as taxpayers face hundreds of billions of dollars in unfunded pension liability. (Read this if you think that under-funding is due to a failure on the part of taxpayers. It’s not.)

“If something is impossible,” Bill also said, “it’s not going to happen.” There is no way all the state pensions will be paid. In fact, those government employees who are already retired and collecting their generous pensions are stealing from future pensioners.

Were you aware of the fact that twenty-five percent of our state’s budget currently goes to fund government employee pensions? In other states the number is about four percent.

The math doesn’t work and cannot be made to work. If you want to learn more about just how bad the pension system currently is, I would encourage you to check out the annual pension study conducted by Taxpayers United of America. One of the best resources they provide is the list of retired government employees whose pensions are over $100,000.

Are you ready for this? There are currently 17,000 of them — and the number goes up every year.

Here are the leaders from each of the top five levels — $500k, $400k, $300k, $200k, and $100k:

Leslie Heffez’s current annual pension is $581,227. Leslie paid in $768,611, and can expect to get out $21,945,104 in lifetime benefits based upon life expectancy averages.

Das Gupta’s current annual pension is $494,773. It took only one year for Das to recoup everything he paid into the system, which was $475,331. He could receive $5,290,301 before the grim reaper comes calling.

Herand Acarian gets $392,682 every year. Not bad for having paid in only $628,987, and with a good long life, Herand could get back $6,843,239 or more.

Eddie Williams wins the $200k column, bringing in six times the annual average Illinois household income (which is approximately $50k) at $299,991. Eddie coughed up a whole $277,792 to invest into the system, and has already received $842,452 in benefits.  (Please read those numbers again.) If he stays healthy, he could cash in for as much as $5,527,649 over his lifetime.

After flipping through over four full pages of pensions exceeding $200,000, Rick Taylor tops off the $100-k’ers at an annual pension of $199,909. For the record, Ricky paid in $229,400, has already received $1,162,854 (he retired at age 56), and life expectancy charts could gift him $7,267,441 or more if he eats right and gets enough exercise.

Hello?

For the most up to date information about where the state’s pension systems stand now the place to go is the Illinois Policy Institute’s website. For several years now, their researchers have been firing off warning flares about the dangers ahead. How Republican and conservative state legislators, let alone our Republican governor, have failed to notice, is a mystery.

If they had noticed, the problem would constitute a big part of their message to their constituents and the hard working families around the state.

There are proposed reform bills, but they all fall way short. To be honest, it’s as if the authors are not reading the works of Bill Zettler or the Illinois Policy Institute.

As for Governor Bruce Rauner, he boasts continually about wanting to spend more money on the K-12 system.

Where does he think a lot of that money is going?

I’ll give you one guess. That level of ignorance is almost incalculable. More money for the worst run level of government in the state?

The solution is a push for universal school choice where the money follows the student. That is where the savings will come, as Illinois families will be freed from the government school monopoly, and move to more economical and effective education options. Short of that, Rauner will never fulfill his constitutional duty to propose a balanced budget.

If Republican leaders had truly noticed those IPI and Bill Zettler warning flares, they would have spent the past many years making sure that enough Illinois taxpayers would be informed and thus demanding that the problem be fixed.

Read Part 1 — There is No Excuse for the Failure of Reform

Up next: More about the Illinois pension scam.

A bold voice for pro-family values in Illinois!

Click HERE to learn about supporting IFI on a monthly basis.

It’s a sad tale of two cities.

The news out of Washington, D.C. this spring is that President Donald Trump and the Republican majorities in Congress plan on cutting taxes. The unsurprising news out of Springfield, Illinois is that General Assembly Democrats are planning to raise taxes.

Also not surprising is that there is a hot debate about whether the GOP tax cut efforts in D.C. can succeed. There is no debate, however, about Illinois Democrats’ accomplishing their mission. Especially when Republicans, including Governor Bruce Rauner, appear poised to help the Democrats.

What is also not debatable is whether raising taxes in Illinois will be enough to make ends meet in a state where spending continues to be out of control. It won’t be.

Sometimes a trip to dictionary.com is helpful even when we all know the definitions. The first word for today is “insatiable”:

• incapable of being satisfied or appeased
• not able to be satisfied or satiated; greedy or unappeasable

As in an insatiable hunger for more of your tax dollars.

Here are three synonyms:

• voracious, unquenchable, bottomless

No one will ever provide the liberal Democrats in Illinois enough money to make them happy. I offer as proof the Illinois government employee pension systems. If Republicans would just use some of that Bruce Rauner/Ken Griffin money to get the word out about how corrupt those systems are, maybe Republicans would start to win more elections here.

Here is the title of an article from the Illinois News Network earlier this week: Study: Illinois’ public pensions are worse off than state claims. From the article (and notice the use of the word “bottomless“):

Illinois has on hand only 29 percent of the funds needed to meet the promises made to current and future retirees. That’s the worst record of any state, and [Hoover Institution Senior Fellow Joshua] Rauh concludes that for the state to stop sinking further into debt, it would have to contribute more than twice what it contributes now.

Illinois now devotes nearly 25 percent of its state budget to the state worker pensions, so doubling that figure means close to half of the state’s revenues would have to go to pensions to avoid accumulating further debt.

“I think people increasingly understand that they’re throwing tax dollars into a bottomless pit,” Mark Glennon, the founder of the WirePoints website and a former venture capitalist and financial adviser, told Illinois News Network.

Putting more money in the current system is futile, according to Glennon.

“The smart ones already know the current situation, but they’re not honest enough to talk about it in public,” he said.

A dozen years ago pension expert Bill Zettler began talking about it — and both political parties ignored his warnings. Bill regularly pointed out the simple truth that if something is impossible — it won’t happen.

That’s our second word for the day: impossible.

In that same Illinois News Network article, Mark Glennon merely confirmed what Bill Zettler had to say many years ago:

The promises that have been made to retirees in Illinois eventually will have to be broken, and the pensions won’t be made in full, according to Glennon.

“Ultimately, I think that’s unavoidable …” he said. “The numbers are far beyond insurmountable already.”

Getting back to the word “impossible” — as I wrote nine years ago, we have two competing impossibilities. Right now there isn’t support to make the needed changes, and yet there isn’t enough money to meet the obligations.

How do we get to a solution? Until public support is rallied — solving the pension problem in Illinois is “incapable of being done, undertaken, or experienced.” It is “incapable of occurring or happening.”

The credit rating agencies understand the situation in Illinois clearly. Note this headline from Crain’s Chicago Business: “Illinois’ credit rating slashed to a cut above junk.” Need I define the word “junk”?

IFI depends on the support of readers like you. Donate now

-and, please-