Illinois Gov. JB Pritzker’s 2022 state budget proposal won’t include an income tax hike, but it will seek the elimination of $900 million in business tax credits and aims to hold spending at current levels, the governor’s office said Tuesday.
The Democratic governor will present his budget outline on Feb. 17. It’s Pritzker’s first spending plan since the November defeat of his constitutional amendment to impose a graduated income tax.
The outline he will present to lawmakers for the state fiscal year that begins July 1 includes a $3 billion deficit – less than the $5.5 billion originally forecast.
Increase the public pensions funding target to 100% from 90% in accordance with actuarial best practices. The goal year for 100% funding would remain 2045.
Gradually increase retirement ages for current workers under age 45 by a maximum of five years.
Apply a pensionable salary cap of $100,000 that grows with inflation. Government workers could still earn more than $100,000, but their pensions could not be based on more than the cap. The cap would only apply to employees not currently receiving a retirement check.
Replace Tier 1 retirees’ 3% compounding benefit increase with true cost-of-living adjustments tied to inflation. Annual increases would be simple, not compounding, and rise with the consumer price index for urban consumers, as reported by the U.S. Bureau of Labor Statistics.
Increase Tier 2 COLAs from half of inflation to full inflation. This would end the unfair subsidization of older workers by younger workers and could prevent a potential lawsuit.
Implement COLA holidays to allow inflation to catch up to past benefit increases. If a worker has been retired for eight years or more, they would skip every other year for 16 years for a total of eight adjustment periods at 0%. If a retiree has been receiving benefits for seven years, they would skip one payment every other year for 14 years, and so on.
Enroll all newly hired employees in a defined contribution personal retirement account with a 4% guaranteed employer match. This would ensure the state never gets into pension trouble again. This would also provide state workers with a portable retirement benefit they could take with them from employer to employer, rather than being forced to stay with the state in order to maximize retirement benefits.
Investors on the hunt for yield with few pickings scooped up Chicago Public Schools? junk paper Wednesday driving down the district?s yield penalties paid in the primary market to their lowest in years.
The 10-year in the $560 million sale that marked the Chicago Board of Education?s first COVID-19 era sale settled at a yield of 1.94%, a 117 basis point spread to the Municipal Market Data?s AAA benchmark.
The BBB benchmark was at an 89 basis point spread Thursday. The new-money and refunding bonds carried one investment grade rating and two speculative grade ones and while high yield investors snapped up the paper, Alliance Bernstein?s high impact social fund shunned the transaction. The fund said the district has failed to provide sufficient evidence it?s protecting students from in-school sexual misconduct in the aftermath of a scandal that drew a rebuke from the U.S. Department of Education.
Illinois Gov. J.B. Pritzker tapped incumbent Illinois Sports Facilities Authority board member Leslie Darling to replace outgoing chairman Manuel ?Manny? Sanchez, putting her at the helm of the agency hit hard by the COVID-19 pandemic?s deep wounds to hotel taxes, which are used to repay its debts.
The board governs the agency that owns and operates and issued $150 million of bonds in 1989 for Guaranteed Rate Field where Major League Baseball?s White Sox play and served as the issuer for $400 million of 2001 bonds that financed the renovation of the Chicago Park District-owned Soldier Field ? home of the National Football League?s Chicago Bears. About $430 million of debt is outstanding.
When it comes to politics and government, Chicago is a force unto itself. Its strengths and weaknesses are, mostly, of its own making.
But the city was recently victimized by the General Assembly, and it’s important for the people of Illinois to know why. What happened speaks to a serious problem — a Legislature seemingly untethered to reality.
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Unfortunately, state legislators voted during the recent lame-duck session to increase retirement benefits for 2,200 Chicago firefighters.
Mayor Lori Lightfoot, as a newspaper headline put it, objected “strenuously” to the Legislature’s action.
She correctly described it as a “massive unfunded mandate to the taxpayers of Chicago at a time when there are no funds to cover this new obligation.”
A federal judge ordered Harvey, Illinois, to rehire a consultant and prove the status of management reforms the city agreed to in a 2014 consent judgment that settled charges the Chicago suburb fraudulently used bond proceeds.
After a series of communications over the last year about the status of the impoverished city’s compliance, the Securities and Exchange Commission dragged the city back to court in October.
