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View Diary: Austerity in Chicago's public schools: A Greek tragedy of epic proportions (155 comments)

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  •  That's right (0+ / 0-)

    and now, like Detroit they find themselves in a crisis. Perhaps, unlike Detroit, they still have a tax base left to help a little. But the pension liability is something that can't be sustained. For years public pensions have substituted lavish retirement promises (we'll pay you later) for current real gains. That is fool's gold. It is one thing to say, in this diary, that Chicago should pay for schools and state all the benefits of a good early educations. It is quite another to figure out how to pay for it in their current dilemma.

    •  Or not (1+ / 0-)
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      happymisanthropy

      There have been many suggestions for how to fix the real problem - Illinois structural deficit, starting with real reform of the state's outdated flat tax. The state's structural deficit is the real problem - "fixing" anything else will not solve the state's financial issues long or short term.

      Also, earned benefits are not "lavish" as they are not "lavish retirement promises" but deferred compensation that is contractually protected by both the Illinois constitution and US constitution. The majority of those in the system do not get Social Security. This has saved the state billions as the state has not had to make any SS contribution, and could not "skip" such a contribution as they have repeatedly with their pension obligations.

      Moving to a Graduated Income Tax would put Illinois in the majority of states, increase the state's revenue by billions each year and reduce the tax burden for the majority of Illinois families, especially those who need it most - lower and middle income.

      Imagination is more important than knowledge. Albert Einstein

      by michael in chicago on Mon Jul 29, 2013 at 09:20:45 AM PDT

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      •  Like I said a tax increase might (0+ / 0-)

        help, but it will not fix. Certainly a progressive tax formula would help. But tax reformulation will not fix a liability the size of Chicago's and the state's. Those promises were foolish.

        BTW, what do you mean they do not get SS?

        •  They aren't promises (0+ / 0-)

          they're contracts.  After the job is done, you don't get to say you don't feel like paying for it.

          I want to see Snowden get a fair trial, an impartial jury, and the same sentence James Clapper gets for lying to Congress.

          by happymisanthropy on Mon Jul 29, 2013 at 11:44:41 AM PDT

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          •  Maybe (0+ / 0-)

            but 'twas a foolish choice none the less. And contacts can be broken (default, bankruptcy) when there is no money to pay up.

            •  No Money? (0+ / 0-)

              Funny there is no money to fulfill the state's contracts, yet the legislators in Springfield continues to create and allow and not reform TIF districts for wealthy corporations that diverts local tax dollars for things like public schools to a corporation's bottom line. The state continues to provide give aways and "tax incentives" to corporations earning billions in profits. So "no money" is relative.

              Contracts can indeed be broken. It would just be a violation of the Illinois Constitution and the US Constitution's contract clause. What the heck, no biggie.

              And if you think it's foolish to give a grandmother who taught elementary children for 35 years a $38,000 a year pension, well then you must be fine with giving tax breaks to CEOs who earn millions.

              Imagination is more important than knowledge. Albert Einstein

              by michael in chicago on Mon Jul 29, 2013 at 02:48:14 PM PDT

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              •  If that is true (0+ / 0-)

                by all means pay her that small amount. But my understanding is that public pensions in the red by $36 billion? Something is surely amiss there. Not sure hat the rest of your point is? TIF (tax increment funding?). And how do to corps get to diver their taxes from what is owed?  It must be ;gal and again, approved by the ELECTED officials of Chicago.

                •  Something IS surely amiss here. (0+ / 0-)

                  The argument for pension "reform" is that pensions are deep in the red and therefore the modest earned pension benefit of teachers like this grandmother should be reduced, despite the fact that she never missed her contribution and has contractual rights to the benefits she earned.

                  It's a scam. That's my point. There is money to give away when it goes to corporations and their executives who provide large campaign donations, but there is no money when talking about average hard working people like teachers, nurses and first responders.

                  The pension issue is a manufactured "crisis" caused by actuarially misleading statistical manipulation and elected officials who diverted tax dollars owed to the pension funds to keep the corporate give aways going and tax rates artificially low. If this had happened in the private sector, it would have been called theft and people would be facing criminal charges.

                  Imagination is more important than knowledge. Albert Einstein

                  by michael in chicago on Tue Jul 30, 2013 at 07:44:44 AM PDT

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                  •  That would certainly be theft (0+ / 0-)

                    You say "The pension issue is a manufactured "crisis" caused by actuarially misleading statistical manipulation and elected officials who diverted tax dollars owed to the pension funds to keep the corporate give aways going and tax rates artificially low."Can you provide some info on that. Because that does not sound legal.

        •  Like I said (0+ / 0-)

          It's replacing a regressive flat tax with a Graduated Income tax just like the majority of states have and that would REDUCE the taxes of the majority of Illinois residents. It's only a tax increase if framed as such, as the majority of Illinois residents will see their taxes decline.

          Regarding liability, see my comment below. The unfunded liability is an actuarial impossibility being used to gin up the "crisis".

          Regarding Social Security (SS), the majority of people in the five pension systems in Illinois do not pay into nor receive Social Security, even if they qualify for it through work done outside the pension system. This has saved the state of Illinois billions of dollars as the normal cost of pensions (if actually contributed on time) is less than the employer cost to Social Security, and the employer can't take a "Social Security holiday" or just not pay their share as the state has done with its share of pension contributions.

          Workers in the system however contribute each and every paycheck at a rate significantly greater that that of the employee cost for Social Security.

          Imagination is more important than knowledge. Albert Einstein

          by michael in chicago on Mon Jul 29, 2013 at 02:41:46 PM PDT

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          •  Progressive tax structure (0+ / 0-)

            People need to be aware that the only way to do this is to change the state's Constitution.

            If anyone ever wondered why Illinois has such a regressive taxing structure, it's because the current crop of politicos don't have a clear path to adjusting it.

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