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View Diary: With Friends Like These...Illinois labor faces hostile state government controlled by former allies (24 comments)

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  •  Illinois has the biggest unfunded pension (3+ / 0-)
    Recommended by:
    charliehall2, Justanothernyer, salmo

    liability in the country, don't they?  

    •  Yep... (3+ / 0-)
      Recommended by:
      irate, charliehall2, Justanothernyer
      The state of Illinois faces at least $83 billion in unfunded liability between its five pension systems, and is on track to spend more on its government pensions than on education by 2016, a new study released by Governor Pat Quinn’s office says.
      And this gem....
      Illinois' structural deficit along with its huge unfunded pension liability have led to credit downgrades, with Illinois rated in the low one-letter A grades by Moody's Investors Service, the lowest level among states it rates.
    •  They very well may (7+ / 0-)

      but the problem is a revenue problem not a spending problem. Illinois has been living beyond its means partly by stealing from our pensions primarily by ignoring their portion of the funding. For anyone really interested, check out the Center for Tax and Budget Accountability: Ralph Martire is an incredible resource speaking to truth to power. It truly is not the public employees who are to blame for Illinois fiscal problems.

      If we don't change, we don't grow. If we don't grow, we aren't really living. - Gail Sheehy

      by itisuptous on Sat Dec 29, 2012 at 03:12:26 PM PST

      [ Parent ]

      •  Sounds like they've been overgenerous in the (3+ / 0-)

        past w/ its pensions.

      •  Revenue Problem???????????? (1+ / 0-)
        Recommended by:

        A couple of years ago IL raised the income tax by 66% on every household.  Property taxes have doubled over the past 10 years.

        In CA, Calpers, responsible for pensions of state and local workers, posted a return of 1%.  The hurdle rate is 8%.  Calpers is being "forced" to increase its allocation to private equity funds, like Bain Capital, in hopes that it may attain that 8% return.

        You say that IL has a revenue problem.

        When was the last time that public employees in ANY state or city asked for a tax one wealth.  When was the last time that municipal employees asked for Ken Griffin, resident of IL, to contribute 5% of his net worth each year?

        Instead, many public sector employees ask for property or sales tax hikes, both which are very REGRESSIVE.

        My recommendation?  If you believe that the problem is a revenue one, then ask for a tax on wealth.

        The only thing you're accomplishing by asking the working and middle-class to pick up the tab is to coalesce more support for charter schools, which are significantly cheaper to operate than public schools.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

        by PatriciaVa on Sat Dec 29, 2012 at 03:43:26 PM PST

        [ Parent ]

      •  Illinois also had a very low income tax (4+ / 0-)

        and the politicians caught hell for raising it from 3% to 5% a few years ago.

        •  Another problem with Illinois's tax system (2+ / 0-)
          Recommended by:
          salmo, Odysseus

          The state constitution mandates that Illinois use a flat tax for state income taxes, meaning that a progressive state income tax, which many other states have, is unconstitutional in Illinois.

          Any attempt to raise or lower the state income tax in Illinois, because of the constitutionally-mandated flat tax, is politically toxic. Any tax cut would be perceived as a "tax cut for the wealthy", and any tax hike would be perceived as a "tax hike on the middle class", even though any tax cut or hike would actually effect all income levels.

          It would require an amendment to the Illinois Constitution to be enacted in order for the General Assembly to have the power to enact a progressive state income tax. Since Illinois does not allow for a constitutional amendment to be proposed via initiative, any proposed amendment would require that both houses of the General Assembly refer a proposed constitutional amendment to the people, and then at least 60% of voters would have to approve of the proposed amendment for it to become part of the Illinois Constitution. Given that most Illinois Democrats aren't all that liberal on fiscal issues, and Illinois Republicans are only interested in either eliminating estate taxes (such as Chad Hays) or grandstanding for political gain (such as Mike Bost), it probably would either require a change in attitude by the Democrats or a leftist third party (probably a newly-created Progressive Party) to gain a significant foothold in Illinois politics for that to happen.

          Elizabeth Warren on the Senate Banking Committee is a BFD!

          by DownstateDemocrat on Sat Dec 29, 2012 at 04:36:09 PM PST

          [ Parent ]

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