In recent weeks, there has been growing sentiment against public sector employees with bloated salaries and gold plated benefits. This post will fan those flames. From ChampionNews.Net:
"How is it possible in this time of want, where the Illinois Department of Human Services is cutting $90 million from services for poor children and the needy elderly, we still feel obligated to take taxpayer dollars and fund public pensions at 200% of a public employee's salary?
We have this false idea that all corruption involves illegal actions. As we know the public pension system in Illinois was constructed in a legal framework of unlikely premises and assumptions that basically had no chance of long-term success. Instead, career politicians used it to reward long-term campaign contributors.
In effect the pension system is a form of money laundering, whereby those who give money to politicians get their investment back many times over in salaries and benefits. That is how $45 million in political contributions by Illinois teachers K-University resulted in a $45 billion TRS pension deficit, 1,000 times the contributions received.
State employees who work a normal 45-year career will retire on more income than when they worked.
State employees are a group we haven't talked much about but on the whole they have the best pension deal in the state. A state employee who works from age 21 to age 66 (like most of us do in the private sector) will retire on take-home pay 20% or greater than when he worked.
That's because he gets 75% of his pay plus Social Security. So if he was making $80,000 and retired after 45 years he would get $60, 000 state pension and about $24,000 in Social Security or $84,000/yr. Additionally upon retirement he does not pay Social Security (7.65%) or pension contribution (4%) or state income tax (3%). Therefore his take-home pay goes from $68,000 to $84,000. Yes his retirement take-home exceeds his working salary.
Notice that by paying only 4% into the state pension he gets $5,000/mo retirement income while paying 6.2% into Social Security he gets $2,000/mo. He pays less and gets more thanks to the generosity of the Illinois taxpayer.
How many private sector employees do you know who will be retiring on more than they made when they worked? Not many I would bet."
Now here's what Gov. Quinn should do, but won't because he's a big government Chicago Democrat:
"The next governor should campaign on the theme "Hit the reset button on pensions."
Let's take all public retirement benefits back to where they were in 1970 when the p1ensions were guaranteed. Get rid of early retirements, get rid of free health care and let's start over from that point.
How could the public employees complain? That is what was guaranteed, so that's what you will get. All the upgrades and increases folded into the plans in exchange for political contributions since then will be reversed.
In February this year (2010) there were two non-binding referendums on funding public pensions.
Here is the exact question asked: "Shall the Illinois General Assembly and the Governor take immediate steps to implement meaningful pension reform which will relieve the unsustainable burden on local taxpayers?"
By overwhelming margins of 87% and 91% voters approved implementing "meaningful pension reform." In November at least 12 more communities will vote on this exact issue. I predict that the outcome will result, once again, in overwhelming approval of "meaningful pension reform."
That should prove beyond a doubt that comprehensive pension reform is supported by a large majority of Illinois taxpayers and any successful politician is going to be out front in implementing this most important of reforms."
If Illinois is to get out of this mess, the public sector must be held in check. That includes tax and spend Chicago Democrats in Springfield.
Background Reading:
ChampionNews.Net: Pension Insanity: $75,000 Salary Turns Into $155,000 Pension for One Kindergarten Teacher
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