The city of Springfield’s local pensions are in crisis. But instead of facing this problem head on, Springfield Mayor Mike Houston is quibbling over what he calls “flaws” in a comprehensive report by the Illinois Policy Institute that measures the fiscal health of Illinois’ 114 largest cities. Our report found that Springfield scored worst among...
The city of Springfield owes $216 million in police and firefighter pension debt alone. This 2012 figure is 6.5 times larger than the $33.5 annual payroll for police and firefighters. Just 10 years earlier, the shortfall was two times larger. (A fully funded pension should have no shortfall.) Pension debts are dwarfing the payrolls that...
Our recent comprehensive report, “The crisis hits home: Illinois’ local pension problem,” reviewed the fiscal health of Illinois’ 114 largest cities to measure the impact of pension costs on taxpayers, city services and the security of city-worker pensions. Decatur received one of the lowest scores as a result of out-of-control pension costs. Here’s why: Taxpayers...
The Wall Street Journal’s article “Public Pension Red Alert” foreshadows more municipal bankruptcies countrywide as pension costs continue to spiral out of control. One of the cities facing the most stress nationally is Chicago. The city’s pension payments are set to jump to more than $1 billion as laws that allowed the city to skimp on pension payments...
Moody’s Investors Services recently cut the city of Chicago’s credit rating to Baa1 from A3 – citing pension debt as a key factor in the downgrade. Without real pension reform, a chain of credit downgrades will likely follow for Chicago’s sister governments. The Moody’s report noted that the recent passage of pension reforms for the...
The State Journal Register’s recent editorial critiquing the Illinois Policy Institute’s study, The crisis hits home: Illinois’ local pension problem, was disappointing on many fronts. The city of Springfield performed dismally in the Institute’s statewide audit, which measured ten different metrics to arrive at a comprehensive picture of a city’s fiscal health. Springfield scored worst among the state’s...
In December 2013, a pension reform bill passed out of the Illinois General Assembly. Sponsors of the bill estimated $160 billion in savings over the next 30 years, and supporters touted that the pension problem in Illinois was finally fixed. In fact, most of the dialogue throughout the Capitol was that the state-funded pension systems...
Illinois’ collapsing state pension systems are seen as the poster child of pension crises across the nation. But another pension crisis is taking place even closer to home. There are nearly 650 locally run pension funds in Illinois, which cover retired police officers and firefighters, along with one consolidated fund for municipal retirees. These municipal...
There’s one simple reason why Detroit finally filed for bankruptcy in 2013. When it came time to pay its bills, the Motor City had run out of taxpayers. Taxpayers fled Detroit for decades as the city’s tax bill kept growing and its vital government services, such as public safety, were slashed. Detroit has lost more...
Many of Illinois' local pension funds are nearing insolvency.
Not unlike ObamaCare, a bill Congress had to pass “to find out what’s in it,” Illinois’ General Assembly passed a pension fix in December 2013 without an official scoring of the bill. During floor debates, House Leader Mike Madigan and proponents of Senate Bill 1 promised $160 billion in savings over 30 years. Many opponents...
Illinois has the worst pension crisis in the nation. If real reforms aren’t enacted, retirees will see their pensions slashed, taxpayers will be forced into a massive bailout and younger state workers might not receive a pension at all. The recent pension reform bill that passed is actually a step backward for the state. Only...
You may be hearing about rosy new pension estimates coming out of Springfield, but don’t be too quick to bite. A memo recently released by legislative leadership points to “good news” coming from a new analysis of Senate Bill 1 to be included in Illinois’ upcoming bond offering on Feb. 6, 2014. The memo claims...
In December 2013, Gov. Pat Quinn signed a pension “reform” bill with many serious flaws. For example, it: barely makes a dent in the state’s unfunded pension liability; guarantees pension funding at the expense of taxpayers and all other government services; creates a fake 401(k) plan; doesn’t means test cost-of-living adjustments, or COLAs; still allows state workers to retire much earlier...