Tag: Illinois

IRS: ILLINOIS LOSES $9.9B IN INCOME AS 87,311 RESIDENTS MOVE OUT IN 2022

Mary Pat Campbell

Link: https://www.illinoispolicy.org/irs-illinois-loses-9-9b-in-income-as-87311-residents-move-out-in-2022/

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Excerpt:

New data shows $9.9 billion flowed from Illinois to other states because people moved out in 2022. Most of those leaving earned $100,000 or more.

When Illinoisans move away, they take their money with them: $9.9 billion in 2022, according to new data from the Internal Revenue Service.

Tax returns for 2021 and 2022 show Illinois lost 86,693 individuals and $9.9 billion because of outmigration. Most of them were high-income Illinoisans.

Author(s): Bryce Hill

Publication Date: 1 July 2024

Publication Site: Illinois Policy Institute

No Hope In Sight For Chicago’s Worst-In-The-Nation Pension Plans

Mary Pat Campbell

Link:https://www.forbes.com/sites/ebauer/2023/08/01/no-hope-in-sight-for-chicagos-worst-in-the-nation-pension-plans/?sh=4fd6218f24c2

Excerpt:

Back on July 18, the Equable Institute released the 2023 version of its annual State of Pensions report, which means that, yes, it’s time for another check-in on these infamously-poorly-funded pension plans. Among the wealth of tables is a list of the best and worst-funded of the 58 local pension plans studied, and, yes, you guessed it, the bottom five spots are Chicago plans, with the bottom three at levels far below all others:

  • Municipal employees, 21% funded,
  • Chicago police, 21.8% funded, and
  • Chicago fire, 18.8% funded.

Combined with the Chicago Laborers’ pension fund, with a 41% funded status, the pensions for which the city bears a direct responsibility have a total pension debt on a market value of assets basis of $35 billion. (This data is from the actual reports*, released in May, which doesn’t match the Equable report precisely.) Spot fifth-worst is taken up by the Chicago Teachers, at 42.4% funded, and the first non-Chicago system in their list, Dallas Police & Fire at 45.2%, is twice as well funded, percentage-point-wise, as the Terrible Trio.

…..

What’s more, Ralph Martire and his Center for Tax and Budget Accountability continue to promote what he calls “reamortization” as a solution to the problem, both through an April Chicago Sun Times commentary and through the release of a report, “Understanding – and Resolving Illinois’ Pension Funding Challenges” (which is an update of a prior proposal). This proposal, which is directed at Illinois pensions but is clearly meant based on other comments to be an all-purpose fix, sounds innocuous, as merely a sort of “refinancing” as one might with a mortgage, but it’s really much more as he proposes to

  • Reduce the funded status target from 90% to 80%, based on the claim that the GAO deems this funded status to be the right target for a “healthy” plan (whether he deliberately misleads or not, he is wrong here, the National Association of State Retirement Administrators or NASRA clearly explained more than a decade ago that 100% funding is always the right target and the only significance of an 80% level is that private sector pension law requires plans funded less than 80% to take immediate corrective action rather than have a long-term funding schedule, and the American Academy of Actuaries more explicitly calls this a “myth”);
  • Issue large sums of Pension Obligation Bonds, which were questionable already when they first began promoting this but are now a terrible idea with our current high bond rates, all the more so for a low-credit-rating city such as Chicago; and
  • Move contributions from last day of the fiscal year to the first day, which he argues would be a gain of a year’s investment return while forgetting that it requires the city to have this money on Day 1 and forgo the other uses it would have.

Author(s): Elizabeth Bauer

Publication Date: 1 Aug 2023

Publication Site: Forbes

Chicago Confronts $35B Pension Crisis, Among Nation’s Worst

Mary Pat Campbell

Link: https://www.governing.com/finance/chicago-confronts-35b-pension-crisis-among-nations-worst?utm_campaign=Newsletter%20-%20GOV%20-%20Daily&utm_medium=email&_hsmi=266392609&_hsenc=p2ANqtz-908JiZoECoiHOSFWeUAutUv8VbdD2wEgfZjFzCrsEv6iI9JACAt9QL1zdrKBCqmO35ZPGv3sCgZURy904H11nrX4AQ5RWJg5Ti63o3xBq99exXZg0&utm_content=266392609&utm_source=hs_email

Excerpt:

One of Brandon Johnson’s first moves as Chicago mayor was to buy himself time to address the city’s biggest financial problem: the more than $35 billion owed to its pension funds.

Just days after his May inauguration, Johnson persuaded state lawmakers to shelve legislation that would’ve added billions to the pension debt, while pledging to establish a working group to come up with solutions by October.

Now, the clock is ticking for the progressive Democrat to fix the worst pension crisis among major U.S. cities.

Just as Chicago reels from a spate of shootings and carjackings, inequities exacerbated by the pandemic and high-profile corporate departures, its pension gap creates a financial burden that threatens its recovery and the mayor’s agenda.

The situation makes for a cautionary tale for municipalities across the country facing long-neglected contributions and funding shortfalls. Already, the third-largest U.S. city spends roughly $1 of every $5 on pensions, while more than 80 percent of property-tax dollars go toward retirement payouts.

….

In 2022, for the first time, the city put in an actuarially calculated contribution for all four pensions funds – a step that helped it shed the junk rating.

Author(s): Shruti Date Singh, Bloomberg News, TNS

Publication Date: 14 July 2023

Publication Site: Governing

First We Get the Money…:$12 Billion to Fund a Just Chicago

Mary Pat Campbell

Link: https://www.scribd.com/document/645874607/First-We-Get-the-Money-FINAL-v3#

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Reinstitute the big business head tax: Mayor Johnson should reinstitute the big business head tax to make large corporations pay what they owe for benefiting from the city’s public infrastructure. The head tax existed previously in Chicago, until Mayor Rahm Emanuel eliminated it as a handout to corporations.3 Reinstating the head tax at a level of $33 per employee per year would generate $106 million a year in new revenue.4

….

Institute a city income tax on high earners: Mayor Johnson should lobby Springfield to give the city the authority to institute a municipal income tax on high earners who live or work in the city. A 3.5% tax on household income above $100,000 would bring in an estimated $2.1 billion a year in new revenue, of which $1.6 billion would be from high-earning Chicagoans and $490 million from high-earning commuters.16 By way of comparison, New York and Philadelphia both have municipal income taxes with top rates above 3.7%.17 By exempting the first $100,000 of income from the tax, the city could ensure the tax is progressive without a change in the state constitution.

  Institute a luxury apartment vacancy fee: Mayor Johnson should work withstate officials to implement a vacancy fee on large, luxury apartment buildings with units that sit vacant for more than 12 months at a time. Landlords who own more than 20 units and are asking for a monthly rental price that exceeds the 75th percentile in the city (based on the number of bedrooms) must pay a fee equal to the median rental price in the city on each unit that sits vacant for more than 12 consecutive months, if more than three units in the building sit vacant for more than 12 consecutive months. This would encourage luxury developers to charge more affordable rents that can maintain higher occupancy rates. This policy is designed to encourage landlords to lower rents to avoid having to pay the fee; thus, if it works as intended, we hope that it would eventually not produce any revenue for the city but that it would increase affordable housing options.

Author(s): Saqib Bhatti, Gabriela Noa Betancourt

Publication Date: May 2023

Publication Site: Scribd

Indicted Former Ald. Ed Burke to Start Collecting More Than $96K Annual City Pension, Records Show

Mary Pat Campbell

Link: https://news.wttw.com/2023/06/15/indicted-former-ald-ed-burke-start-collecting-more-96k-annual-city-pension-records-show

Excerpt:

Indicted former Ald. Ed Burke (14th Ward) will collect an annual city taxpayer-funded pension of more than $96,000, even as he awaits trial on federal corruption charges, according to records obtained by WTTW News.

Burke, 79, who did not seek a 15th term on the Chicago City Council, left office after 54 years on May 15.

When he stepped down, Burke was the longest serving member of the City Council, earning more than $120,408 annually.

Burke will start receiving pension payments of $8,027 per month in sometime in August, and they will continue for the rest of his life, according to records obtained by WTTW News from the Municipal Employees’ Annuity and Benefit Fund of Chicago.

….

Burke is set to stand trial on Nov. 6 on 14 counts alleging the powerful politician repeatedly — and brazenly — used his elected office to force those doing business with the city to hire his private law firm. Burke has pleaded not guilty, and used millions of dollars of stockpiled campaign cash to fund his defense.

If Burke is convicted on those charges, he could lose his pension, since his conduct occurred as part of his official duties as an alderperson.

Author(s): Heather Cherone | Jared Rutecki

Publication Date: 15 Jun 2023

Publication Site: WTTW

Car insurance prices soar in Illinois, Rep. Will Guzzardi aiming to crack down on insurers

Mary Pat Campbell

Link: https://www.wbez.org/stories/car-insurance-prices-soar-in-illinois/b46209a7-5606-4bf4-8f15-806689c76e28?utm_source=Wirepoints%20Newsletter&utm_campaign=387e2a5fbc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_895ee9abf9-387e2a5fbc-30506353

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The five biggest auto insurers in Illinois have raised automobile insurance rates a whopping $527 million since January, an analysis by two consumer groups shows.

That follows about $1.1 billion in rate increases last year by the top 10 Illinois car insurers.

The analysis by the nonprofit Illinois Public Interest Research Group and Consumer Federation of America looked at auto insurance rate increases by the five largest companies in Illinois: State Farm, Allstate, Progressive, Geico and Country Financial, which together make up 62% of the Illinois market.

…..

Now, state Rep. Will Guzzardi, D-Chicago, has introduced legislation to address those issues and crack down on insurers. Guzzardi’s bill would:

  • Require automobile insurers to get prior state approval for rate hikes.
  • Ban “excessive” insurance increases.
  • Prohibit using gender, marital status, age, occupation, schooling, home ownership, wealth, credit scores or a customer’s past insurance company relationships in setting car insurance rates.

It’s already illegal to use race, ethnicity and religion in setting rates. That would continue under Guzzardi’s proposal.

Author(s): Stephanie Zimmermann | Chicago Sun-Times

Publication Date: 6 May 2023

Publication Site: WBEZ in Chicago

Heat exposure deaths inspire proposed air conditioning requirements in Illinois

Mary Pat Campbell

Link:https://www.thecentersquare.com/illinois/article_6616e81a-e074-11ed-8a30-8b0b8fc31490.html

Excerpt:

 Two bills in the Illinois legislature this session will require air conditioning, or at least a common room with air conditioning, in buildings housing seniors.

Last May, when a heat wave sent temperatures in Illinois soaring into the high 90s, three older women living in state-subsidized housing died of heat exposure in the Rogers Park neighborhood of Chicago. The three seniors, Delores McNeely, 76, Gwendolyn Osborne, 72, and Janice Reed, 68, were constituents of state Sen. Mike Simmons, D-Chicago. Two separate bills now aim to prevent these types of deaths,

Simmons sponsored a proposal that would require all state-funded affordable housing to have air conditioning. The bill passed the state Senate in March.

….

In March, the National Low Income Housing Coalition and Housing Action Illinois found that Illinois is lacking 300,000 affordable housing units for the 443,746 poorest households in the state. For every 100 extremely low-income renters, there are only 34 affordable and available units, the report found.

The report defines “very low income” in the Chicago area as households that earn less than $31,250 a year for a family of four, and $22,000 a year for a single person. Many seniors on Social Security live on half of that, Palmer said.

Author(s): Zeta Cross

Publication Date: 22 Apr 2023

Publication Site: The Center Square

Illinois Bill Would Give State Treasurer Voting Control On Pension Assets – Wirepoints

Mary Pat Campbell

Link: https://wirepoints.org/illinois-bill-would-give-state-treasurer-voting-control-on-pension-assets-wirepoints/

Excerpt:

Count on the Illinois legislature to find a way to further maim its crippled pension system.

Senate Bill 2152 would strip pension trustees of control over how to vote shareholder matters and vest the power in the state treasurer, currently, Michael Frerichs.

Still worse, the treasurer would then be bound to comply with the Illinois Sustainable Investing Act on how he votes on behalf of stocks owned by the pensions. That law requires officials like the treasurer to include “sustainability” considerations in how public money is invested. It’s basically a progressive policy agenda also known as ESG (Environmental, Social, Governance). It’s often ridiculed as “woke capitalism,” and includes the goals of zero fossil fuels, “equity,” gender and identity politics, and pretty much any other social justice fad in vogue.

….

Shareholders, including pensions, usually have the right to vote on key corporate issues such as board of director elections, rights offerings, mergers and acquisitions. For interests in private investment partnerships, which pensions also hold, voting powers include other major matters. If the bill becomes law, Frerichs, or whoever is treasurer, would hold a proxy for all those votes and execute ballots, voting as he alone decides — a huge concentration of power in one individual.

The bill would eliminate any fiduciary obligation to vote shares in a way that maximizes their value, diluting that goal with progressive’s political agenda. Today, pension managers are fiduciaries for pensioners – a strict, legal standard — but the treasurer would not be if the bill becomes law.

Author(s): Mark Glennon

Publication Date: 17 Mar 2023

Publication Site: Wirepoints

Appeals panel agrees IL police and firefighter pension consolidation doesn’t violate state constitution

Mary Pat Campbell

Link: https://cookcountyrecord.com/stories/639342824-appeals-panel-agrees-il-police-and-firefighter-pension-consolidation-doesn-t-violate-state-constitution?utm_source=Wirepoints+Newsletter&utm_campaign=55b5f7633f-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_895ee9abf9-55b5f7633f-30506353#new_tab

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A state appeals panel has affirmed a ruling that the Illinois state constitution holds no barrier to a law consolidating hundreds of local police and firefighter pension boards into two statewide funds.

In December 2019, Gov. JB Pritzker signed Senate Bill 1000, which amended the Illinois Pension Code to create the Police Officers’ Pension Investment Fund and the Firefighters’ Pension Investment Fund, built through the consolidation of more than 650 otherwise independent downstate and suburban funds.

….

Although some union leaders supported the move, dozens of police and firefighter pension boards and individual members sued the state and the new funds to stop the consolidation. Kane County Circuit Court Judge Robert Villa granted summary judgement to the state, prompting an appeal to the Illinois Second District Appellate Court.

…..

Although the panel agreed the protection clause covers more than just the payment of pension money, it said past Illinois Supreme Court rulings invoking the clause involved benefits that “directly impacted the participants’ eventual pension benefit,” McLaren wrote. But being able to vote for board members, or have a local board control investments, he added, “is not of the same nature and essentiality as the ability to participate in the fund, accumulate credited time, or receive health care, disability and life insurance coverage.”

“Voting for the local board is, at best, ancillary to a participant’s receipt of the pension payment and other assets,” McLaren continued. “The local boards were entrusted with investing the contributions so that payments could be made to participants. However, choosing who invests funds does not guarantee a particular outcome for benefit payments. The local boards also did not have any say in the actual method of funding; contribution requirements were set in the Pension Code.”

Author(s): Scott Holland

Publication Date: 7 Feb 2023

Publication Site: Cook County Record

Chicago Municipal pension fund posts net -11.7% return for 2022

Mary Pat Campbell

Link: https://www.pionline.com/pension-funds/chicago-municipal-pension-fund-posts-net-117-return-2022?utm_source=Wirepoints+Newsletter&utm_campaign=55b5f7633f-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_895ee9abf9-55b5f7633f-30506353#new_tab

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Chicago Municipal Employees’ Annuity & Benefit Fund returned a net -11.7% for the fiscal year ended Dec. 31.

The $3.2 billion pension fund’s return equaled its policy benchmark return of -11.7% for the period, according to an investment report on its website.

For the three, five and 10 years ended Dec. 31, the pension fund returned an annualized net 3.5%, 4.1% and 6.5%, respectively, compared to the respective benchmarks of 3.8%, 4.8% and 6.5%.

Author(s): Rob Kozlowski

Publication Date: 8 Feb 2023

Publication Site: P&I

BIDEN PROMISES NEARLY $36 BILLION FOR NATIONAL PENSION BAILOUTS

Mary Pat Campbell

Link: https://www.illinoispolicy.org/biden-promises-nearly-36-billion-for-national-pension-bailouts/

Excerpt:

The Biden administration promised nearly $36 billion to stabilize pension plans for Teamsters nationwide after forecasts predicted the system’s default by 2026. Union members would have seen their retirement benefits slashed by 60% if the system defaulted.

President Joe Biden announced Dec. 8 the federal government will use nearly $36 billion to stabilize failing Teamsters union pension plans nationwide, preventing severe benefits cuts for more than 350,000 union workers.

….

Illinois is home to more than 20 Teamster’s chapters and the nation’s worst pension debt, estimated at nearly $140 billion by state authorities in 2022. Private investor services projected that debt as high as $313 billion, using more realistic assumptions on returns.

In September these state pension funds had just 47 cents for every dollar in promised pension benefits.

Springfield lawmakers cannot routinely rely on federal authorities to bail out overly generous and underfunded state and local pensions. Illinois public servants deserve to receive the retirements they’ve been promised in full – not the 40% that would remain after default.

Author(s): Patrick Andriesen

Publication Date: 12 Dec 2022

Publication Site: Illinois Policy Institute

ILLINOIS PUBLIC PENSION DEBT GROWS TO $140B

Mary Pat Campbell

Link: https://www.illinoispolicy.org/illinois-public-pension-debt-grows-to-140b/

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Illinois’ five statewide pensions system saw their debt increase by nearly $10 billion to a grand total of $140 billion in fiscal year 2022. Pensions will cost the state nearly $11 billion next year, but that’s still $4.4 billion too little.

Illinois’ state pension debt now stands at $139.7 billion, according to a new report from the Illinois General Assembly’s Commission on Government Forecasting and Accountability.

That is up $9.8 billion from 2021, when state pensions were benefitting from healthy investment returns. After markets cooled substantially, state pension debt in the fiscal year that ended July 1 continued to grow, increasing for the 11th time in 15 years.

Author(s): Bryce Hill

Publication Date: 14 Dec 2022

Publication Site: Illinois Policy Institute