Saturday, May 05, 2012

Quinn pension reform comes up short in Illinois - Crain's Chicago Business

Here comes the big property tax hike across Illinois.

Recent comments from Mr. Quinn and his bipartisan pension committee indicate the real goal here may be a cost shift in which local communities, for the first time, would be forced to pay for large portions of the pension system historically paid by the state. This almost certainly would mean large property tax increases.

The governor and the General Assembly are appropriately embarrassed at the prospect of raising income taxes again. So it appears they plan to force local leaders to raise billions in property taxes instead. This is wrong. Local school boards never made pension promises — Springfield politicians did.

There is now substantial momentum generated by Rhode Island's successful pension reforms in which a 401(k) system and sensible benefit changes have been adopted. Optimism also is warranted given the acknowledgment of the crisis by senior pension officials and the governor himself.

via Quinn pension reform comes up short in Illinois - Government News - Crain's Chicago Business

Here’s the cite from the Illinois Constitution Democrats claim ties their hands on pension reforms,

SECTION 5. PENSION AND RETIREMENT RIGHTS

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

I’d suggest increased life expectancy’s added to the value of a defined benefits plan.  Added more value than the designers of these things ever expected possible.  Converting them into defined contribution plans doesn’t diminish benefits.  It preserves the pension albeit shifting the risks of a long life onto the pensioner.  The greatest threat that’ll diminish and impair pensions: both existing and future, is the status quo.  That’s what’s really unconstitutional.

3 comments:

Anonymous said...

If you dont agree with the Illinois Constitution as it clearly states...why dont you suggest an amendment?

Bill Baar said...
This comment has been removed by the author.
Bill Baar said...

I don't think it's needed. The pension's appreciated considerably. Changing it doesn't diminish or impair it.