This article discusses a Morgan Stanley Wealth Management poll result that 93 percent of high net worth investors in the Chicago area are worried about the state’s financial well-being despite general optimism about the national and global economies. The Civic Federation said these concerns are confirmed by Illinois’ severely underfunded pensions, backlog of unpaid bills and credit rating that is the worst of all 50 states.
On March 21, 2013, the Illinois House passed a bill that would significantly reduce the State’s pension costs by limiting automatic annual benefit increases for retirees and employees. House Bill 1165, approved by a vote of 66 to 50, addresses the largest single factor driving the State’s pension costs. Current retirees and employees hired before January 1, 2011 receive annual compounded increases of 3% in their pension benefits. Although the increase is often referred to as a cost of…
On March 20, 2013, the Illinois Senate rejected a proposal designed to significantly reduce the State's burdensome pension costs but approved a narrower measure that applies only to active teachers outside of the City of Chicago. Senate Bill 35 was defeated by a vote of 23 to 30. The bill, sponsored by Senator Daniel Biss, is the Senate version of House Bill 3411, a measure sponsored by Representative Elaine Nekritz and House Minority Leader Tom Cross that was introduced with bipartisan…
This article discusses securities fraud charges filed by the U.S. Securities and Exchange Commission against the State of Illinois. The charges discuss factors contributing to the State’s pension funding crisis including a 1994 law establishing an inadequate pension funding schedule and a 2005 law allowing the State to further reduce its pension payments for five years. The Civic Federation said the finding affects every Illinois taxpayer and should serve as another wakeup call for legislators.
After the City and leadership of the Chicago Police Sergeants’ union agreed to a tentative contract that included pay raises and significant pension reforms, rank-and-file union members rejected the contract by a vote of 876-134 earlier this week. The contract would have been the first significant implementation of Mayor Emanuel’s outline of pension reforms from last spring and a first step toward reducing the enormous costs of the City’s pension system. The rejected contract included 9…
This article covers a vote by the Chicago police sergeants union to reject a proposed contract agreed on by the City of Chicago and sergeants union representatives. The proposed contract would have increased employee pension contributions and the retirement age while reducing automatic annual pension benefit increases and calling for 90 percent funding of the City’s public safety pension funds by 2040. The Civic Federation’s Status of Local Pension Funding report found that the Chicago Police…
This segment covers the U.S. Securities and Exchange Commission’s charge against Illinois for allegedly misleading investors between 2005 and 2009 about the level of underfunding of its pension systems. The Civic Federation said the charges should serve as another wakeup call for legislators as the State’s unfunded pension liabilities continue to grow.
This article discusses the State of Illinois’ settlement with the U.S. Securities and Exchange Commission (SEC) over charges that it misled investors between 2005 and 2009 about the degree of underfunding in its employee pension funds. The Civic Federation says the State’s $97 billion unfunded pension liability threatens funding to all other priorities in the State budget.
A bipartisan group of Illinois lawmakers has signed onto a new pension reform proposal designed to reduce the State’s massive pension costs. House Bill 3411, co-sponsored by 20 Republican legislators and 11 Democrats, was introduced in the Illinois House on February 26, 2013. Senate Bill 35 was amended a day later to mirror HB3411. HB3411 includes many of the changes proposed in House Bill 6258 in the last General Assembly and is expected to generate similar savings. At a press conference on…
This blog examines some of the long-term obligations of the City of Chicago and its overlapping local governments using a per capita indicator based on bonded debt and unfunded pension liabilities. Rating agencies and other financial analysts commonly monitor overlapping direct debt trends as an affordability indicator when governments consider debt issuance. The indicator reflects the premise that the entire population of a jurisdiction benefits from and bears the cost of infrastructure…
