Rahm on retirement benefits: “If we can’t steal it one way, steal it another way.”

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Yesterday a bunch of s old guys gathered to celebrate the 4th anniversary of our pension rights win before the Illinois Supreme Court.

As we have done every year for three years in the second week of May a group of retired teachers gathered for lunch at a Greek restaurant in the western suburbs to celebrate a win.

It was just four years ago that the Illinois Supreme Court ruled that the pension protection clause of Article XIII Section 5 meant exactly what it said.

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.

To be clear, the five of us were not alone in this fight. Thousands of teachers and other public employees around the state, retirees especially, made their voices heard loud and clear.

This was after the state public employee union leadership cut a deal with Illinois Senate Democrats to reduce our benefits. The result of their duplicity would have cost retirees plenty.

In my own case, if I lived long enough, my benefit would have been reduced by a third.

But an organization of retired teachers, the Illinois Retired Teachers Association, refused to go along with this treachery. They promised a law suit against any bill that violated the pension protection clause. In the end the state’s public employee unions were forced to join the law suit. The case landed before the Supreme Court. The eight justices voted unanimously in favor of pension rights.

And so we gather each year in May.

While the five of us were sharing toasts and conversation, the out-going Mayor of Chicago, Rahm Emanuel, was proposing more pension theft.

In an interview in which he discussed the high and low points of his administration—from making difficult decisions on city finances to getting off on the wrong foot with former Chicago Teachers Union President Karen Lewis—Emanuel disclosed that he has begun shopping his new pension idea in Springfield.

“If we can’t change the benefit, tax it,” Emanuel said, referring to the lack of action on his earlier proposal to amend the Illinois Constitution to allow a reduction in the currently required 3 percent annual compounded increase in most city and state pension benefits.

Emanuel said he agrees with outside watchdog groups who contend that the 3 percent increase far exceeds the current rate of inflation, and has become unsustainable for city taxpayers who already are paying hundreds of millions of dollars a year now in  higher property and other taxes for pensions and face another $1 billion in hikes in the next two or three years.

First of all, can’t Rahm just go without leaving Lori Lightfoot with all kinds of suggestions nobody asked him for in the first place?

Although to be honest, Rahm is not the first to suggest taxing retirement income.

But follow his painful logic.

The court says we can’t reduce retirement earnings.

But they didn’t say we couldn’t tax it.

We can have the retirees pay for their own pension out of their own pensions and savings.

This is money the city and state should have paid into the pension plans but diverted it to pay for other things.

Am I against taxing retirement earnings?

Nope.

Like most working people I already pay a larger share of my income in taxes than, say, Jeff Bezos or Ken Griffin.

In fact, I believe I have an obligation to support public schools, libraries, hospitals, and mental health clinics in my neighborhood, like the mental health clinics Rahm shuttered a few years back.

In fact, I just voted in favor of being taxed extra for the public mental health clinic to be re-opened in my neighborhood.

But a tax on our pension is just back door trickery to get around the Supreme Court ruling on the pension protection clause.

Same old Rahm trickery.

 

 

9 thoughts on “Rahm on retirement benefits: “If we can’t steal it one way, steal it another way.”

  1. Just curious, if this idea of taxing pensions ever came to fruition would it only affect one class of government pensioners–state, municipal,fire, police, etc. [TRS, CTPF, SURS, IMRF, etc.] or would the private sector as well like people getting pensions from Caterpillar, John Deere and the like?

  2. Ralph Martire will be on Chicago Tonight to discuss this…tonight (7 PM ). His organization’s e-mail says it’s a tax for “$100,00+” in retirement benefits (which, then, doesn’t affect most of us!).

  3. By this logic, I made a real mistake ever going into teaching. For years, before I went back to teaching, I substituted. Now I get a small pension and an even smaller spousal benefit from SS (reduced by 2/3!). Thank goodness I won’t have to live on it! I’m sure there are retirees out there who won’t be able to make it. So much for public service.

  4. Paying state taxes on retirement income to pay for the pension deficit is pretty ridiculous. I was surprised to hear Ralph Matire support taxing retirement income over $100k. Not only would it open the door to later tax over $75k, then $50k etc, but why should anyone have to pay state tax on retirement income since retirement pensions were partially based on no state tax. Most retirees are not in a position to recoup the cost of a tax burden.

    And a 3% annual increase is the standard average of inflation. No retiree is making out like a bandit here. And since inflation is being controlled by the Feds who are also keeping interest rates low so that savings earns nothing, I’d say it is a somewhat fair swap.

  5. Very few people will realize how much your little restaurant group accomplished. If only we could figure a way to help organize similar restaurant/teacher groups who do what they can when they can, Illinois would be a better place.
    I hope you guys ordered some saganaki and thought of me for a moment. I wish I could hav been there.

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