The debt must be paid.

V2-160409980

Crain’s graphic.

What does this chart show?  “How much more do Illinois and Chicago owe in pension debt,” says Crain’s Chicago Business.

Understand.

This is not just future debt. It is what is currently owed. Today.

It is a graphic of current liabilities that are owed to the state’s pension funds because payments into it by the City of Chicago and the State of Illinois were not paid.

Not paid for decades. “We didn’t steal it,” State Representative Elaine Nekritz once told me. “We didn’t have to. We never paid it in the first place.”

Those numbers will get higher and larger so long as payments are not made and the payment schedule is not changed.

No plan under discussion by Rahm Emanuel, John Cullerton or Governor Rauner will make those numbers disappear.

Debts must be paid.

Proposals by smart folks like Ralph Martire would help over time. Raise taxes. Tax income based on ability to pay. Reamortize the debt. A sales tax on products and services used by those who are more wealthy.

But the debt must be paid.

22 thoughts on “The debt must be paid.

  1. A graduated income tax would help past off the debt and that could include retirement income that falls into a high bracket.

    Sent from my iPhone

  2. There is a word for someone who takes your work and doesn’t pay you what your contract calls for. That word is “thief”.

  3. Quinn, bad as he was, at least made the full payments due to the pension systems each year he was in office. Rauner has already skipped payments in violation of the law. This was only his first year! Rauner’s proposed K-12 budget for next year skips the TRS payments entirely! Let’s NOT let Rauner get away with this!

    • The governor does not make or not make payments. That is the work of the legislature. Rauner cannot skip state pension contributions without the agreement of the GA.

      • Munger, (a Rauner puppet) skipped a payment back around November. As far as I know, the missed payment has not been made up yet. She has claimed she doesn’t have enough money to pay the state’s bills. We must not let her get away without bringing this years payments up to date by July 1!
        Rauner/Munger can not “not pay” court ordered payments, but state payments into our pension systems are not included in court ordered payments. Someone reported Rauner will propose another “pension holiday” for next year, and will amend/line veto the payments into the 5 state systems to “balance” the budget. Rauner is using the budget problems HE HIMSELF has created as cover for him to use the lie “pensions are taking the money for higher education, social (safety net) programs, child care, seniors energy assistance, and other state program cuts”. I hope you are right Fred, and Rauner/Munger will follow the law. Rauner’s attitude so far has been “little care I for the law, and anyone but the top 1%.”

  4. Doesn’t this just highlight that pensions are unsustainable promises. That teachers need to get paid and save in a 401k like the private sector. Clearly with the solutions proposed, more taxes, teachers just assume because they get irrational promises from government that the public at large needs to be taxed to cover those promises. If I were the teachers union I would negotiate to get as much money as I could upfront. Not leave it as a burden down the road for tax payers that can’t pay it. Money paid upfront is then in your control and these problems don’t come up.

    • Dear trevogre,
      The problem is the state and city did not put in the required employer contribution for decades, and instead used that money to do other things, thus keeping taxes artificially low. No other reason.
      Anon

      • I assume there is a process for raising taxes. They usually don’t get collected based upon contracts the government makes that they can’t afford. So not paying the contribution didn’t keep taxes low. Not passing new taxes kept taxes low. You have to accept the possibility that the government makes contracts that they do not have tax revenue to support. Which ends in broken promises. In the private sector you can also contract to pay money you don’t have but when you go bankrupt you just don’t pay it. The assumption that people should be taxed more because of unsustainable pension contracts makes teachers a special class of citizen, where no unfortunate financial circumstance is allowed to cause them harm to the detriment of the public at large. That opinion is offensive. Government safety nets, if they exist, should exist for every citizen equally. That is why I think we shouldn’t be using a broken mechanism of pension and instead should pay teachers as they work. So they don’t end up offsetting payments until the society can’t afford them.

      • You are arguing a theoretical and philosophical position, but not one connected to the reality of the current situation in which the courts have decided our pension must be paid. Any other position is a bar room conversation. Think what you want. It doesn’t matter.
        If the pension obligation must be paid by order of the court, it will be paid. The longer the discussion of revenue gets delayed the more will be owed, making the banks a lot of money.
        But as long as we are having a theoretical and philosophical conversations, here is my contribution:
        I think it is crazy that in the wealthiest nation in the world, people my age and older should not have a guaranteed income or worry about their health care. Or how their food, rent or mortgage will be paid.
        We are alone in the industrial world where that is true.
        Yes. Public employees are guaranteed a pension that others are not. The question shouldn’t be why we get it while others don’t. The question should be why do get it and others don’t.
        When I was in the Netherlands this past summer I told friends there that I was lucky because Anne and I had health insurance that only cost us $1,000 a month. A $1,000 a month including my Medicare payment.
        They were amazed. In all the rest of the industrialized world peoples’ health care is considered a social responsibility, paid for by all through taxes. High taxes on those who can most afford it. And lower taxes on those who can least afford it.
        But we talk past each other. Because how you conceptualize what is a humane and decent society is different than mine. Since you think the way you do and I think the way I do, we will, of course, never agree.
        So, instead we will rely on the courts. Which so far have said we will be paid.

      • What is humane is irrelevant. You can go to Church and pray to God for miracles, or you can demand miracles from government. If what you want is not possible it is still an irrational expectation. The fact that a few countries with relatively small populations have stabilized their economies to the point where they can be fully socialized is irrelevant. At scale system become harder to support and break down. The difference of opinion is not that anyone wants people to not have what they need. Its that some acknowledge that just because we wish something to be so doesn’t mean it will be so.

        So a Judge ordered the pensions to be paid. If it were that easy they would have paid them all along. I have no knowledge that they won’t find a way, but clearly at some point, some number, it will be impossible to catch up. The federal government backs up its nonsensical promises by just printing money. Maybe that’s what will happen for these pensions. Who knows.

        Regardless if I were a teacher I wouldn’t want a pension in light of how they are being treated. I would want my money up front and be able to walk away and be self reliant. Added bonus, then everyone would be on the same playing field and we don’t push the responsibility on our children for paying for what we are doing today without their vote.

      • Nope. Not a teacher, but I am a tax payer, and a citizen.

        Hope it works out for you. Just generally tired of government making decisions that cannibalize the finances of future generations.

      • Your opinion is no more sound or based in reality because you are a taxpayer. Teachers are taxpayers too. “Because I’m a taxpayer,” is the last refuge of the failed argument.

      • Really. You asked me if I was a teacher, in order to call out that I was not as if somehow that makes my opinion irrelevant. I pointed out that my opinion is relevant because I’m a person that doesn’t deserve to be marginalized. Because I’m a citizen and a tax payer. A part of the community that has to carry the burden of pensions. My argument didn’t fail anything and doesn’t require any refuge. The discussion over pensions regardless of the crisis is one that we all need to participate in.

        Teachers love power. That is the crux of the problem. They love to say “I’m a teacher” and have that confer some exclusivity and superiority. Moral and otherwise. When the fact is they are government employees that utilize unions to negotiate that power abandoning any moral high ground they might believe they have because of their lofty personal mission to teach children. They abandon it in the search of personal security at the expense of quality education and the finances of the communities they serve. They want tenure and pensions and all manner of guarantees and autonomy, and they reject performance metrics in favor of demanding life long employment.

        The noble self sacrificing person that they may have started out to be is lost or buried in the mire of socialistic education, red tape, and their own self interest.

        Being a teacher confers you no moral or intellectual superiority and often the inverse is true because teachers tend to have no real world experience at all to draw from to teach students about what actually happens when you aren’t effectively an adult ward of the state.

      • Here is my moral authority: I say what I say in public. I don’t hide my accusations behind some anonymous pen name. Your anger at teachers reveals much. I called you out because you hide behind the label “taxpayer” as if that gives you some right to bully people who serve the community. I have met up with that nonsense my entire adult life, even when I spent the first half working in the private sector. You bet that teaching teaching provides a moral high ground.
        By the way, no more anonymous trolling by you here. We are done with this conversation. You will need to find another place to accuse teachers of being “mired in socialistic education, red tape and self-interest.”

    • To anon above, the pension contributions will be made, in full, unless the GA votes and Rauner enacts legislation to change current law. The Comptroller will have to find the cash to make the missed payment, as has happened a couple times in the past years. Pension Contributions are an annual continuing appropriation for which specific annual appropriation authority is not required. These payments may not be line item vetoed or otherwise unilaterally reduced by a Governor. In short, Fred is right.

  5. The concept is simple. Steal actively or passively (Nekritz style) and break the bank. By intentionally breaking the system, a crisis is created. Police powers or an outside (investment crony) emergency manager will do the dirty work. Lowering bond ratings makes a fortune for investment buddies who are like inside traders with less than zero integrity.
    The bad guys get the money and we are left to die – or revolt. I, personally, refuse to be a willing victim.

    • What treogre fails to understand is that school districts across the state negotiated higher future pension payments to teachers in lieu of raises. It was cost efficient for districts to add to future benefits rather than pay current salary increases which would continue to compound over time. It was lucrative for school districts as 60+ % of district adopted similar pension plans. Teachers, such as those in the CTU lost on both counts: no raises for years in exchange for higher pension payments which were not made by CPS. Daley not only didn’t pay in but also removed the dedicated pension property tax levy which helped fund them. The CTU was against these proposals but had no choice to accept them.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s