Madison - St. Clair Record

Wednesday, November 13, 2019

The crazy cartoon world of Illinois public pensions

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By The Madison County Record | Sep 23, 2015


Strange things happen in cartoons – things that could never happen in real life, things that are physically impossible – but cartoon lovers know that and delight in the alternate “reality.” The absurd goings-on are an essential part of animated humor.

Cartoon characters often use shovels or pitchforks to move piles of dirt or hay, but the piles never diminish.

In the real world, however, piles do get smaller when the contents are removed. That is, in the private sector of the real world, they get smaller. In the public sector, the rules of cartoon logic seem to apply.

Actually, it's not that public piles don't get smaller, it's that the politicians responsible for the creation and depletion of public piles refuse to acknowledge the real-world reality that you cannot take out more than you put in.

An online portal recently established by the Illinois Department of Insurance to provide annual statements of public pension funds attests to our legislators' commitment to cartoon logic. Unfortunately, it's not funny.

The portal is unique in that, beyond laying out the aggregate problem Illinois taxpayers face-- unfunded liabilities exceed $144 billion, before considering $50 billion or more in health care benefits-- it finally sheds light on some of the specific “commitments” made to state employees.

Like Edwardsville fireman James A. Anderson, who worked 30 years and contributed $95,511 towards his pension before retiring in Nov. 2008. That’s $3,180 or so per year. He was making $85,794 when he retired.

Today, Anderson’s pension amounts to $76,831, and he’s already been collecting it for nine years-- nearly $700K. Assume he collects for another 16 years (total of 25) and that’s another $1.23 million before figuring in annual cost-of-living increases.

What’s the Illinois pension crisis really about? The answer lies in this typical deal we give state employees-- $2 million in payouts and free healthcare for life if you contribute $95,511 over 30 years.

For private sector retirees to guarantee Anderson’s current pension--$76,831 in income for 25 years-- they would have had to have saved $958,000 at retirement, or $31,000 per year, approximately ten times what he saved.

Put another way-- Anderson didn’t really make $85,794 per year at retirement. He made nearly $118,000, adding the “unsaved savings” he’s now collecting to his salary total. That’s real money taxpayers are spending on him today, and that’s real truth in accounting.

Now, how many people are there in Illinois like James A. Anderson, who saved five percent of what he expects to collect from taxpayers in retirement?

Somewhere north of 440,000 people, and the number is growing fast.

This story began with raw political malfeasance, augmented by financial illiteracy and self-preserving cowardice.

It will end with Illinois’ economy going “splat,” as skyrocketing property taxes drive businesses for our borders while government is effectively seizing huge chunks of our home equity. This isn’t a prediction; it is happening right now.

Alternatively, it ends with privately-employed voters getting out their pitchforks to force the current and future James Andersons to agree to a pension compromise, or else.

The deal they took was too good to be true. The politicians who gave it away misled voters, who never would have accepted these ultra-rich pay and pension packages.

And today, regardless of who did what, we have no plausible means of paying for these pensions, other than letting state government expropriate wide swathes of private property from non-pensioners to pay the bill.

Cartoon logic got us into this mess. Only human common sense will get us out.

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Organizations in this Story

Illinois Governor Bruce RaunerIllinois Department of InsuranceIllinois State SenateIllinois House of Representatives

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