MUScoop
MUScoop => The Superbar => Topic started by: Tugg Speedman on July 25, 2017, 02:59:42 PM
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Why Illinois Is In Trouble - 63,000 Public Employees With $100,000+ Salaries Cost Taxpayers $10B
www.forbes.com/sites/adamandrzejewski/2017/07/25/why-illinois-is-in-trouble-63000-public-employees-with-100000-salaries-cost-taxpayers-10b/#13aae7131141
Who makes more than $100k/year?
20,295 teachers and school administrators
10,676 rank-and-file workers and managers in Chicago
9,567 college and university employees
8,640 State of Illinois employees
8,817 small town city and village employees – including 84 municipal managers out-earning every U.S. governor at $180,000.
In total, there is roughly $12 billion in cash compensation flowing to six-figure government workers when counting the 9,031 federal employees based in Illinois. Or, this is one-third of the State's annual budget.
Combined the salaries of these 9,000 employees, the state's Medicaid outlays (to 25% of the state's population), and pension contributions (40% no longer live in Illinois), and these three items total over 75% of the state's $36 billion budget passed earlier this month.
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The value of my home goes down every time you post one of these articles. :-\
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The value of my home goes down every time you post one of these articles. :-\
So does mine :(
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In the meantime, median home sale prices in the Chicago area rose 6 percent last year. better than the national average.
Hate when facts disrupt the narrative.
Speaking of facts, how factual is an article about public employees' salaries when a significant portion of the people they're including here are retired?
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In the meantime, median home sale prices in the Chicago area rose 6 percent last year. better than the national average.
Hate when facts disrupt the narrative.
I sold my home in one of the top school districts in Illinois for 25% less than it was worth in 2006. Maybe there was a 6% bump in the last year but in the last 10 years Illinois has to be at or near the bottom of the heap.
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In the meantime, median home sale prices in the Chicago area rose 6 percent last year. better than the national average.
Hate when facts disrupt the narrative.
Speaking of facts, how factual is an article about public employees' salaries when a significant portion of the people they're including here are retired?
How does that disrupt the narrative? What is the narrative? It isn't a made up story that Illinois is in terrible financial state.
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How does that disrupt the narrative? What is the narrative? It isn't a made up story that Illinois is in terrible financial state.
It's a made up narrative that their property values are falling.
Illinois is in a terrible financial state. Illinois' terrible financial state is not making the Land of Lincoln the wasteland that some here would have you believe, especially for those who aren't poor or disabled (the people who truly are bearing the brunt of the state's fiscal mismanagement).
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I sold my home in one of the top school districts in Illinois for 25% less than it was worth in 2006. Maybe there was a 6% bump in the last year but in the last 10 years Illinois has to be at or near the bottom of the heap.
So you bought an overvalued house near the peak of the housing bubble (no insult intended, nearly all houses were overvalued then) and then sold it and took a loss.
Isn't that a relatively common experience for those who bought when you did and sold when you did, regardless of where?
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So you bought an overvalued house near the peak of the housing bubble (no insult intended, nearly all houses were overvalued then) and then sold it and took a loss.
Isn't that a relatively common experience for those who bought when you did and sold when you did, regardless of where?
Yahtzee. I paid to get out of my bad purchase.
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In the meantime, median home sale prices in the Chicago area rose 6 percent last year. better than the national average.
Hate when facts disrupt the narrative.
Speaking of facts, how factual is an article about public employees' salaries when a significant portion of the people they're including here are retired?
Narrowly selected facts ....
Since the end of the great recession, June 2009. National home prices are up 40%. Chicago area is up 11%
(https://fred.stlouisfed.org/graph/fredgraph.png?g=euNI)
Add to this that Illinois has the highest tax burden in the country
https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/
and the largest population decline in the country
http://www.chicagotribune.com/news/local/breaking/ct-illinois-population-decline-met-20161220-story.html
To suggest that the answer is higher taxes to drive more people out of the state is the exact wrong thing to do, and exactly why the state is spiraling out of control.
Oh, and the fact that the state is paying six figure benefits to retirees in Florida is even worse. At least current employees are producing something now (they work now) and live in the state (and presumably spend most of their grotesque salaries here). Retirees are a pure drag with no current benefit to the state.
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We enjoyed your vacation Heisey!
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We enjoyed your vacation Heisey!
I did too ... and will be on another one next week!
You win twice.
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Interesting chart, but it doesn't disprove what I said, or prove what you said. In fact, it disproves your claim that your home values are falling. They're rising. And last year they likely rose more than the national average.
As for suggesting " that the answer is higher taxes to drive more people out of the state" ... who here suggested that?
As for the out-of-state pensioners ... yep, that sucks. It's also a moot point, given that the Constitution and Supreme Court says nothing can be done about it.
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Interesting chart, but it doesn't disprove what I said, or prove what you said. In fact, it disproves your claim that your home values are falling. They're rising. And last year they likely rose more than the national average.
As for suggesting " that the answer is higher taxes to drive more people out of the state" ... who here suggested that?
As for the out-of-state pensioners ... yep, that sucks. It's also a moot point, given that the Constitution and Supreme Court says nothing can be done about it.
No you're right the state had a better year than nationally, but like I said, it is a narrowly selected fact that means nothing.
One option left ... a constitutional amendment ... 3/5 house, 3/5 senate, and state wide referendum with 60%.
Not saying that is going to happen soon. But when the state is desperate enough, that amendment will take everything away from those retirees as people here will be desperate.
Retirees should agree to a little less now instead of risking it all later.
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No you're right the state had a better year than nationally, but like I said, it is a narrowly selected fact that means nothing.
One option left ... a constitutional amendment ... 3/5 house, 3/5 senate, and state wide referendum with 60%.
Not saying that is going to happen soon. But when the state is desperate enough, that amendment will take everything away from those retirees as people here will be desperate.
Retirees should agree to a little less now instead of risking it all later.
Nope. Not the retirees fault. The taxpayers didn't live up to their obligations earlier. They should do so now.
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No you're right the state had a better year than nationally, but like I said, it is a narrowly selected fact that means nothing.
Well, when you say home values are falling, and the most recent data shows they're rising better than the national average, then they do actually mean something.
If you had claimed home values were lagging over the past eight years, you'd be correct. But you said they were falling.
One option left ... a constitutional amendment ... 3/5 house, 3/5 senate, and state wide referendum with 60%.
That's exceptionally unlikely in a state where more than 40 percent of the population - and roughly the same percent of the legislature - lives in Cook County.
The real solution that doesn't get talked about is re-amortizing the debt. Won't solve everything but it would go a long way. And, unlike the other "solutions," it's feasible and constitutional.
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Nope. Not the retirees fault. The taxpayers didn't live up to their obligations earlier. They should do so now.
I'd agree if they were the same taxpayers. Unfortunately the previous two generations of voters elected individuals that could not make the hard choices. Now or in the near future when the hard choices have to be made your solution is to punish the current and future taxpayers twice. They get higher taxes to support the bad decisions of the previous generation and lower services as all the money goes to service debt, pensions, waste, and much lower services. What the previous generations (voters and politicians) did by creating this situation is immoral.
They signed up for debt they were never going to pay back but their children will in a lower standard of living. And we are doing the same to our children at a National level.
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Nope. Not the retirees fault. The taxpayers didn't live up to their obligations earlier. They should do so now.
Well, in fairness, the taxpayers did live up to their obligations. They paid their taxes.
It was the legislators and governors, of both parties, who took those tax dollars and put them where they didn't belong, creating this mess.
That said, it's unfair and unconstitutional to expect retirees to surrender part of what they lawfully earned and was promised to them because some other people don't want to find a legal and, yes, difficult solution.
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I'd agree if they were the same taxpayers. Unfortunately the previous two generations of voters elected individuals that could not make the hard choices. Now or in the near future when the hard choices have to be made your solution is to punish the current and future taxpayers twice. They get higher taxes to support the bad decisions of the previous generation and lower services as all the money goes to service debt, pensions, waste, and much lower services. What the previous generations (voters and politicians) did by creating this situation is immoral.
They signed up for debt they were never going to pay back but their children will in a lower standard of living. And we are doing the same to our children at a National level.
You're 100 percent right about prior legislatures and administrations avoiding the hard choices ... which would have been tax increases and an end to earmarks in the 1990s that, let's face it, the state's conservatives would have fought tooth-and--nail.
But at the same time, demanding that retirees be the ones who sacrifice here is not only illegal, it's unfair. They upheld their end of the bargain.
It's unfortunate, but yes, the younger generations will have the deal with this.
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I'd agree if they were the same taxpayers. Unfortunately the previous two generations of voters elected individuals that could not make the hard choices. Now or in the near future when the hard choices have to be made your solution is to punish the current and future taxpayers twice. They get higher taxes to support the bad decisions of the previous generation and lower services as all the money goes to service debt, pensions, waste, and much lower services. What the previous generations (voters and politicians) did by creating this situation is immoral.
They signed up for debt they were never going to pay back but their children will in a lower standard of living. And we are doing the same to our children at a National level.
That's how it works. Taxpayers have to live with the decisions of previous generations, positive or negative.
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Speaking of facts, how factual is an article about public employees' salaries when a significant portion of the people they're including here are retired?
That is even worse. In Illinois, pensions are exempt from state tax. Every else gets a huge tax increase to pay out income that will never be taxed itself on a state level.
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It's a made up narrative that their property values are falling.
Illinois is in a terrible financial state. Illinois' terrible financial state is not making the Land of Lincoln the wasteland that some here would have you believe, especially for those who aren't poor or disabled (the people who truly are bearing the brunt of the state's fiscal mismanagement).
Was that part of this story?
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So you bought an overvalued house near the peak of the housing bubble (no insult intended, nearly all houses were overvalued then) and then sold it and took a loss.
Isn't that a relatively common experience for those who bought when you did and sold when you did, regardless of where?
No, I bought the house 34 years ago and made a big profit when I sold. The point was that in one of the most desired school districts in Illinois my house was still 25% below its peak price almost 10 years after the crash. How many desired neighborhoods in how many states can say that? If the answer isn't zero it's close to zero.
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That is even worse. In Illinois, pensions are exempt from state tax. Every else gets a huge tax increase to pay out income that will never be taxed itself on a state level.
Illinois also doesn't tax Social Security (for which teachers are not eligible), IRAs, 401Ks or any other retirement income.
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Illinois also doesn't tax Social Security (for which teachers are not eligible), IRAs, 401Ks or any other retirement income.
Maybe they should.
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Nope. Not the retirees fault. The taxpayers didn't live up to their obligations earlier. They should do so now.
nm
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No, I bought the house 34 years ago and made a big profit when I sold. The point was that in one of the most desired school districts in Illinois my house was still 25% below its peak price almost 10 years after the crash. How many desired neighborhoods in how many states can say that? If the answer isn't zero it's close to zero.
Capital gains are good, Lenny. Where to?
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Capital gains are good, Lenny. Where to?
Wife and I bought a small villa in a golfing community in Naples, Fl. C'mon down, Doc - I'll treat you to a round of golf with a "beer summit" to follow. First 10 Scoopers to visit get the same deal.
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Nope. Not the retiree's fault. The taxpayers didn't live up to their obligations earlier. They should do so now.
The problem is simple ... the taxpayers have left, the state has become too expensive (via a combination of to expenses like taxes and crappy states assets and services, like lousy roads). So those that stay have to pay ever higher tax rates and they too leave and the cycle continues.
In 1970 amended its constitution to include Article XIII, Section 5 reads:
http://www.ilga.gov/commission/lrb/con13.htm
Pension and Retirement Rights: Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired
The courts have struck down both the State's and City's pension reform (passed in 2013 and 2104 respectively) because of this passage in the Constitution. This is why they can never change.
In 1970 Chicago's population was 3.4 million. Today it is 2.6 million and falling faster than any large city in the country. If Chicago had 800,000 more taxpayers, this would not be a problem. The City and State are changing, they are getting smaller, but the pensions can never get smaller. That is the root of the problem, chasing people out of the "too expensive" state. Making it more expensive is the exact wrong thing to do.
So, the retirees bet on the wrong horse. The question is when they are no longer get paid.
So the retirees have two choices ... take about 85% now (and have to struggle on $85k a year for life in FL instead of $100k year) and help the state get by without punishing tax increases. or let the state fall into such a bad state of desperation that taxpayers rise up and give less than 50% and part of a "movement."
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Well, when you say home values are falling, and the most recent data shows they're rising better than the national average, then they do actually mean something.
If you had claimed home values were lagging over the past eight years, you'd be correct. But you said they were falling.
I never said falling, I believe you're referring to Lenny. But I will take it on anyway.
As the next chart shows, since the end of the great recession (June 2009), Chicago area housing is so bad that it cannot keep pace with inflation. So the average Chicago homeowner is losing "real" value. And this is the era of no inflation and Chicago homes are such a crap investment they cannot keep pace with the lowest inflation rate in generations.
Zero is never the benchmark in investments. It is always a benchmark like the S&P 500 or inflation. Are you doing better than the benchmark? Chicago Housing is not when compared to the benchmark of inflation. Hence is it "falling."
(https://fred.stlouisfed.org/graph/fredgraph.png?g=eva1)
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No, I bought the house 34 years ago and made a big profit when I sold. The point was that in one of the most desired school districts in Illinois my house was still 25% below its peak price almost 10 years after the crash. How many desired neighborhoods in how many states can say that? If the answer isn't zero it's close to zero.
Seems like you had really bad luck.
In 2006, the median home price in the Chicago market was $245,000. In 2016, it was $222,500. So, down slightly less than 10 percent from 2006. (This all according to Illinois Association of Realtors data).
A 25 percent hit is rough. But your case appears to be an exception rather than the rule.
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I never said falling, I believe you're referring to Lenny. But I will take it on anyway.
As the next chart shows, since the end of the great recession (June 2009), Chicago area housing is so bad that it cannot keep pace with inflation. So the average Chicago homeowner is losing "real" value. And this is the era of no inflation and Chicago homes are such a crap investment they cannot keep pace with the lowest inflation rate in generations.
Interesting chart, but I need more information to know if it really supports what you're saying about the Chicago market.
For example, how does this compare with other similar locales (i.e. Midwestern metropolitan markets)? Let's see the same charts for Milwaukee, Detroit, Indianapolis, Minneapolis, St. Louis, etc. Let's see the same chart for national home sales.
Side note: I've checked a few already and, not surprisingly, they look similar.
Here's Milwaukee:
https://fred.stlouisfed.org/series/ATNHPIUS33340Q#0
Here's Indy:
https://fred.stlouisfed.org/series/ATNHPIUS26900Q
Here, just for giggles, is Phoenix:
https://fred.stlouisfed.org/series/PHXRNSA#0
As you can see, Chicago is hardly unique.
Also, I think it's worth noting that the disparity between home sale prices and CPI in Chicago - and in the other markets I've looked at - is the result of a big decline in housing sales between 2010-12. In the 5+ years since, home values have easily outpaced the CPI, including last year, in which values rose nearly three times the rate of inflation.
So, that seems to run contrary to your argument that home values are plummeting as a result of Illinois' fiscal crisis. As the crisis has worsened over the last 3-4 years, the housing market has markedly improved.
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That's how it works. Taxpayers have to live with the decisions of previous generations, positive or negative.
Actually, they don't.
It's a zero-sum game. Someone has to get screwed in the next 15-20 years, and it's not going to be either of the generations in power (Gen-X and Millennials) So the question ultimately comes down to this: will Gen-X and the Millennials perpetuate the mess by taking the burden heaped upon them and passing it along to their kids, or will they make the difficult choice to fix the problem by kicking it back to the boomers who created the mess.
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I never said falling, I believe you're referring to Lenny. But I will take it on anyway.
As the next chart shows, since the end of the great recession (June 2009), Chicago area housing is so bad that it cannot keep pace with inflation. So the average Chicago homeowner is losing "real" value. And this is the era of no inflation and Chicago homes are such a crap investment they cannot keep pace with the lowest inflation rate in generations.
Zero is never the benchmark in investments. It is always a benchmark like the S&P 500 or inflation. Are you doing better than the benchmark? Chicago Housing is not when compared to the benchmark of inflation. Hence is it "falling."
(https://fred.stlouisfed.org/graph/fredgraph.png?g=eva1)
Pretty sure my house isn't worth what we paid for it when you adjust for inflation. And we have made a ton of improvements on top of everything else.
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Actually, they don't.
It's a zero-sum game. Someone has to get screwed in the next 15-20 years, and it's not going to be either of the generations in power (Gen-X and Millennials) So the question ultimately comes down to this: will Gen-X and the Millennials perpetuate the mess by taking the burden heaped upon them and passing it along to their kids, or will they make the difficult choice to fix the problem by kicking it back to the boomers who created the mess.
Except there is no lawfully or politically feasible - much less reasonable - means of "kicking it back to the boomers."
Contrary to some wet dreams out there, you're not getting 60 percent of the legislature and 60 percent of the voters to pass a constitutional amendment slashing the benefits of a bunch of retired teachers, cops and firefighters. The legislature struggled to get a simple majority on a far less onerous (from retirees' perspective) bill in 2013, but they're somehow getting a super-majority to cut benefits in half?
Nope.
Also a wet dream ... getting pensioners to "agree" to give back a portion of their pensions. Even if a majority wanted to, there's no legal mechanism for them to do so. Are they supposed to send money back to the treasury?
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In Michigan, a law was passed to tax pensions at the same rate as other income a few years ago. Civilization survived. Also, I have always contributed to my pension plan. The city I work contributed very little for 15 years. Two contracts ago, the so called 'pension holiday' for the city was discontinued. There are steps that can be taken, but they require trust, good faith efforts, horse trading, and will. On all sides.
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Except there is no lawfully or politically feasible - much less reasonable - means of "kicking it back to the boomers."
Contrary to some wet dreams out there, you're not getting 60 percent of the legislature and 60 percent of the voters to pass a constitutional amendment slashing the benefits of a bunch of retired teachers, cops and firefighters. The legislature struggled to get a simple majority on a far less onerous (from retirees' perspective) bill in 2013, but they're somehow getting a super-majority to cut benefits in half?
Nope.
Also a wet dream ... getting pensioners to "agree" to give back a portion of their pensions. Even if a majority wanted to, there's no legal mechanism for them to do so. Are they supposed to send money back to the treasury?
Slashing pensions isn't going to solve the problem. It's not just the teachers, cops and firefighters who screwed things up. It was also the accountants, lawyers, doctors, machinists, welders, housekeepers, fry cooks, babysitters, mechanics, nurses, etc.... basically, anyone who didn't bother to question whether the post-WWII gravy train of prosperity would go on forever, which - as it turns out - was pretty much everyone.
In other words, instead of going after public employees, you have to make cuts across the board. This is where single-payer health care could really help out... with everyone on the same program, you can establish an upper limit on life-extending medical care, e.g. certain treatments, pharmas, services, etc. are no longer available once you hit a certain age. Health care costs would go down drastically if we were more willing to put tax dollars into education and infrastructure rather than spending billions just so our 92 year old grandmas can live to 92-1/2.
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Slashing pensions isn't going to solve the problem. It's not just the teachers, cops and firefighters who screwed things up. It was also the accountants, lawyers, doctors, machinists, welders, housekeepers, fry cooks, babysitters, mechanics, nurses, etc.... basically, anyone who didn't bother to question whether the post-WWII gravy train of prosperity would go on forever, which - as it turns out - was pretty much everyone.
In other words, instead of going after public employees, you have to make cuts across the board. This is where single-payer health care could really help out... with everyone on the same program, you can establish an upper limit on life-extending medical care, e.g. certain treatments, pharmas, services, etc. are no longer available once you hit a certain age. Health care costs would go down drastically if we were more willing to put tax dollars into education and infrastructure rather than spending billions just so our 92 year old grandmas can live to 92-1/2.
That is a very audacious statement that I agree with completely. I spend more time than I like to think about running to nursing homes. Huge money pit.
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Slashing pensions isn't going to solve the problem. It's not just the teachers, cops and firefighters who screwed things up. It was also the accountants, lawyers, doctors, machinists, welders, housekeepers, fry cooks, babysitters, mechanics, nurses, etc.... basically, anyone who didn't bother to question whether the post-WWII gravy train of prosperity would go on forever, which - as it turns out - was pretty much everyone.
In other words, instead of going after public employees, you have to make cuts across the board. This is where single-payer health care could really help out... with everyone on the same program, you can establish an upper limit on life-extending medical care, e.g. certain treatments, pharmas, services, etc. are no longer available once you hit a certain age. Health care costs would go down drastically if we were more willing to put tax dollars into education and infrastructure rather than spending billions just so our 92 year old grandmas can live to 92-1/2.
No doubt death panels would prove effective in cutting the deficit. Or we could institute and encourage "Ethical Suicide Parlors" like the ones introduced by Vonnegut in "Welcome to the Monkey House".
By the way, I'm not disagreeing with you - the amount of money spent to keep people technically "alive" in this country is preposterous. But people (myself included) may still have reservations about some government bureaucrat or arbitrary number (age) determining whether Grandma's life is worth living. Tricky stuff.
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Wife and I bought a small villa in a golfing community in Naples, Fl. C'mon down, Doc - I'll treat you to a round of golf with a "beer summit" to follow. First 10 Scoopers to visit get the same deal.
beautiful! naples lakes? in laws have a place there-beautiful! good on ya!
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Slashing pensions isn't going to solve the problem. It's not just the teachers, cops and firefighters who screwed things up. It was also the accountants, lawyers, doctors, machinists, welders, housekeepers, fry cooks, babysitters, mechanics, nurses, etc.... basically, anyone who didn't bother to question whether the post-WWII gravy train of prosperity would go on forever, which - as it turns out - was pretty much everyone.
In other words, instead of going after public employees, you have to make cuts across the board. This is where single-payer health care could really help out... with everyone on the same program, you can establish an upper limit on life-extending medical care, e.g. certain treatments, pharmas, services, etc. are no longer available once you hit a certain age. Health care costs would go down drastically if we were more willing to put tax dollars into education and infrastructure rather than spending billions just so our 92 year old grandmas can live to 92-1/2.
Baby boomers really *ucked the rest of us.
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beautiful! naples lakes? in laws have a place there-beautiful! good on ya!
Actually Bear's Paw. C'mon down, Rocket!
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Interesting chart, but I need more information to know if it really supports what you're saying about the Chicago market.
For example, how does this compare with other similar locales (i.e. Midwestern metropolitan markets)? Let's see the same charts for Milwaukee, Detroit, Indianapolis, Minneapolis, St. Louis, etc. Let's see the same chart for national home sales.
Side note: I've checked a few already and, not surprisingly, they look similar.
Here's Milwaukee:
https://fred.stlouisfed.org/series/ATNHPIUS33340Q#0
Here's Indy:
https://fred.stlouisfed.org/series/ATNHPIUS26900Q
Here, just for giggles, is Phoenix:
https://fred.stlouisfed.org/series/PHXRNSA#0
As you can see, Chicago is hardly unique.
Also, I think it's worth noting that the disparity between home sale prices and CPI in Chicago - and in the other markets I've looked at - is the result of a big decline in housing sales between 2010-12. In the 5+ years since, home values have easily outpaced the CPI, including last year, in which values rose nearly three times the rate of inflation.
So, that seems to run contrary to your argument that home values are plummeting as a result of Illinois' fiscal crisis. As the crisis has worsened over the last 3-4 years, the housing market has markedly improved.
You mixed two measures. Milwaukee and Indy are not home prices, they are the number of home sold. AZ is a home price like Chicago.
Again the problem is simple ... Illinois/Chicago loses taxpayers and cannot adjust pension benefits lower (like WI, IN and MI have done). Chicago is stuck with a pension system designed to be supported by a population of 3.4 million when its population is 2.6 million and falling.
Again pensions can never change and they are now one-third of the budget. The great over-the-top deal structured in 1970 still exists today. Sure it would make sense to offer NEW employees a different (lower) deal. But they cannot. They get the same deal that the city cannot afford and it absolutely screws the middle-class ($50k to $75k year) by hosing them with costs and taxes so Chicago retirees get unlimited healthcare and $80k to $100k a year for life.
It cannot last and it will implode one day. Not this year or next year, but it will implode.
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No, I bought the house 34 years ago and made a big profit when I sold. The point was that in one of the most desired school districts in Illinois my house was still 25% below its peak price almost 10 years after the crash. How many desired neighborhoods in how many states can say that? If the answer isn't zero it's close to zero.
Key problem -- I live in a desirable suburb of Chicago with a world class school district. My property taxes are $14,000 plus a year. I just saw my income tax jump by more than a third and my sales tax is 7% as long as I don't buy anything in Crook County. Toni Preckwinkle wants to tax soft drinks at 1 cent per ounce, affectionately called the Toni Tax. She wants to get people to stop drinking soda but if by chance tax revenue rises, oh geez, who would have thought that would happen? Dios mio!
The same home in Nashville would have a tax of about $3,200 per year. Tennessee has no income tax and no Toni Tax on soft drinks. The sales tax is comparable to Crook County. Tennessee has a booming economy and Nashville is one of the nation's fastest growing cities.
I have a second home in Florida for which I do not homestead. As a consequence, my property taxes are a whopping $5,000 per year. My sales tax is about 5 percent and if I declare residency in Florida, I would pay no income tax. There is no Toni Tax here either! Florida has a booming economy with population growing at almost double digit rates.
You wonder why Illinois is losing population and why housing values decline?
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Pretty sure my house isn't worth what we paid for it when you adjust for inflation. And we have made a ton of improvements on top of everything else.
Do we own the same house LOL!!!!!
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Except there is no lawfully or politically feasible - much less reasonable - means of "kicking it back to the boomers."
Contrary to some wet dreams out there, you're not getting 60 percent of the legislature and 60 percent of the voters to pass a constitutional amendment slashing the benefits of a bunch of retired teachers, cops and firefighters. The legislature struggled to get a simple majority on a far less onerous (from retirees' perspective) bill in 2013, but they're somehow getting a super-majority to cut benefits in half?
Nope.
Also a wet dream ... getting pensioners to "agree" to give back a portion of their pensions. Even if a majority wanted to, there's no legal mechanism for them to do so. Are they supposed to send money back to the treasury?
Illinois state law stipulates that bond holders get paid first from a debt service trust fund that the state pays into the first of each month. This is why bondholders continue to buy the state’s debt – they get paid first.
The state has not paid $15 billion in bills. This is a default by most legal definitions and the state has been in default for years. But it is NOT in default to BONDHOLDERS so they happily pony up more and more money, $36 billion to date.
Those who are not getting paid will go to court and force the state to prioritize them. This is already happening.
June 30
http://www.chicagotribune.com/news/local/politics/ct-illinois-budget-medicaid-decision-met-20170630-story.html
A federal judge on Friday ordered Illinois to start paying $293 million in state money toward Medicaid bills every month and an additional $1 billion over the course of the next year, worsening a cash-flow problem caused by two years of budget-free spending by state government. U.S. District Judge Joan Lefkow’s ruling came after lawyers representing Medicaid patients and attorneys for the state were unable to agree on a plan to deal with bills and pay down a $3 billion backlog owed to health care providers.
Illinois has stiffed Medicaid providers for years. They own them almost $3 billion and they are leaving the state because they are not getting paid anymore. Soon the poor will run out of options for Medicaid.
So the judge ruled that Medicaid must also "get paid first" like bond holders. Soon the courts will rule that others that are owned the remaining $12 billion who have not been paid must also get "paid first," along with pension and current payroll who also want to be "paid first."
The state will not have enough to pay everyone first, and the law will no longer allow the state to prioritize who gets paid because these type of court rulings are specifically saying they can no longer do this. So, no one gets paid and everything crashes.
They will also squeeze out the bondholders and they will stop buying Illinois debt issues.
The system will fail and when it does, it will be ugly.
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Wife and I bought a small villa in a golfing community in Naples, Fl. C'mon down, Doc - I'll treat you to a round of golf with a "beer summit" to follow. First 10 Scoopers to visit get the same deal.
I don't golf, but I drink my handicap in beers. So, that offer sounds good but right now I am a quarter of a world away.
Ever eat at Em-Ons Thai Cafe? Good stuff.
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It's only fair that the people who contributed to the problem - whether elected or those who elected them in the past - get stiffed now and get less pension. It was their bad decisions that caused this mess. It would also be a good lesson for anyone who thinks money from government is free and everlasting... unfortunately it's not.
If Illinois really wants to fix this, they'd drop all business tax to <2%, drop state income tax, pay 100% pensions only for pensioners who spend over 250 days a year in Illinois and 50% for those who spend their money elsewhere, bring in some big businesses, and get the growth that's required to get out of the problem.
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Actually Bear's Paw. C'mon down, Rocket!
aww, thanks, but my spare weeks get spent in surprise, Az. love the dry, thinner air. seem to get more out of my balls(golf too :D)down here-like hitting a homer in denver. i'm about 10 minutes from the dome and walking distance to some spring training facilities. you can't miss with a nichlaus facility
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It's only fair that the people who contributed to the problem - whether elected or those who elected them in the past - get stiffed now and get less pension. It was their bad decisions that caused this mess. It would also be a good lesson for anyone who thinks money from the government is free and everlasting... unfortunately it's not.
If Illinois really wants to fix this, they'd drop all business tax to <2%, drop state income tax, pay 100% pensions only for pensioners who spend over 250 days a year in Illinois and 50% for those who spend their money elsewhere, bring in some big businesses, and get the growth that's required to get out of the problem.
Some of this, like the residency requirements to get 100% were actually in the pension reform passed in 2013 by the state. But the courts ruled that was unconstitutional because article 8 says you can never change these rules.
I show article 8 in a post above and the court was correct in its interpretation.
The current system cannot be sustained and will blow up. This happens in one of three ways.
1. Tax the hell out of the state. Taxpayers leave, dependent people cannot. The state becomes a giant Detroit. The state is well on its way in this regard as it is losing population (read taxpayers) faster than any other state in the country. 25% of its population is on Medicaid already.
2. Courts rule the state has to pay everyone it owes money too. That is $15 billion now and growing. It can no longer prioritize payments like it currently does. The state cannot pay everyone so no one gets paid. The courts decided who gets partial payments. In other words, the courts take over running the state. This is bankruptcy without using the word. It is messy and ugly.
3. Taxpayers had enough and elect a Walker type and a legislator that agrees with him. He slashes and burns all the spending and pensions and cut taxes. He does this via constitutional amendments, that pass. Unstable lefties crap on the floor of the state capital, Chicago Democrats flee to Milwaukee to orchestrate a resistance movement, public unions strike and the cops stop policing and the trash does not get picked up. A recall attempt is tried. It's ugly, messy and eventually works. But it restores sanity and reasonable/normal levels of spending and taxes.
My bet is on #3. Again that will not be easy.
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No doubt death panels would prove effective in cutting the deficit. Or we could institute and encourage "Ethical Suicide Parlors" like the ones introduced by Vonnegut in "Welcome to the Monkey House".
By the way, I'm not disagreeing with you - the amount of money spent to keep people technically "alive" in this country is preposterous. But people (myself included) may still have reservations about some government bureaucrat or arbitrary number (age) determining whether Grandma's life is worth living. Tricky stuff.
I'm not talking about death panels... I'm simply talking about cutting off expensive medical care that seemingly has no quality of life benefit. Heck, I'll even throw in the stuff for anyone of any age that has minimal extension-of-life benefits, too... take statins for instance... how many of you are shelling out (whether out of pocket or via insurance) thousands of dollars a year because your cholesterol is high not realizing that when you factor in the potential side effects, you're only postponing death by an average of 3-4 days. Seriously. http://bmjopen.bmj.com/content/5/9/e007118
[#crickets]
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Nope. Not the retirees fault. The taxpayers didn't live up to their obligations earlier. They should do so now.
You sound like Mike Madigan.
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I'm not talking about death panels... I'm simply talking about cutting off expensive medical care that seemingly has no quality of life benefit. Heck, I'll even throw in the stuff for anyone of any age that has minimal extension-of-life benefits, too... take statins for instance... how many of you are shelling out (whether out of pocket or via insurance) thousands of dollars a year because your cholesterol is high not realizing that when you factor in the potential side effects, you're only postponing death by an average of 3-4 days. Seriously. http://bmjopen.bmj.com/content/5/9/e007118
[#crickets]
You;re right, butt hat kind of logic has no chance against a drug industry (BIG PHARMA!) that spends literally hundreds of millions of dollars a year - and that's just what they report - ensuring that the government will continue paying for such drugs, and God knows how much more "persuading" doctors to keep prescribing it.
Not to mention the billions they spend annually on advertising that convinces people they need lots of medication to cure their high cholesterol, acid reflux, aching joints and limp boners.
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You;re right, butt hat kind of logic has no chance against a drug industry (BIG PHARMA!) that spends literally hundreds of millions of dollars a year - and that's just what they report - ensuring that the government will continue paying for such drugs, and God knows how much more "persuading" doctors to keep prescribing it.
Not to mention the billions they spend annually on advertising that convinces people they need lots of medication to cure their high cholesterol, acid reflux, aching joints and limp boners.
I think Carlin called that an oxymoron like Jumbo Shrimp.
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You;re right, butt hat kind of logic has no chance against a drug industry (BIG PHARMA!) that spends literally hundreds of millions of dollars a year - and that's just what they report - ensuring that the government will continue paying for such drugs, and God knows how much more "persuading" doctors to keep prescribing it.
Not to mention the billions they spend annually on advertising that convinces people they need lots of medication to cure their high cholesterol, acid reflux, aching joints and limp boners.
While I'm no stranger to being told "you're right," I think that's the first time someone's called me a butt hat.
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Not to mention the billions they spend annually on advertising that convinces people they need lots of medication to cure their high cholesterol, acid reflux, aching joints and limp boners.
I've got nothing against anyone spending money advertising and trying to convince people to buy stuff for their aching joints (or their limp ones). People want drugs they don't "need" because they want to get pregnant, not get pregnant, get a boner or soothe aching joints? Fine. Get a prescription and buy them. Stuff people "want" isn't supposed to be what insurance is all about.
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Interesting chart, but I need more information to know if it really supports what you're saying about the Chicago market.
For example, how does this compare with other similar locales (i.e. Midwestern metropolitan markets)? Let's see the same charts for Milwaukee, Detroit, Indianapolis, Minneapolis, St. Louis, etc. Let's see the same chart for national home sales.
Side note: I've checked a few already and, not surprisingly, they look similar.
Here's Milwaukee:
https://fred.stlouisfed.org/series/ATNHPIUS33340Q#0
Here's Indy:
https://fred.stlouisfed.org/series/ATNHPIUS26900Q
Here, just for giggles, is Phoenix:
https://fred.stlouisfed.org/series/PHXRNSA#0
As you can see, Chicago is hardly unique.
Also, I think it's worth noting that the disparity between home sale prices and CPI in Chicago - and in the other markets I've looked at - is the result of a big decline in housing sales between 2010-12. In the 5+ years since, home values have easily outpaced the CPI, including last year, in which values rose nearly three times the rate of inflation.
So, that seems to run contrary to your argument that home values are plummeting as a result of Illinois' fiscal crisis. As the crisis has worsened over the last 3-4 years, the housing market has markedly improved.
Rahm, is that you?
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While I'm no stranger to being told "you're right," I think that's the first time someone's called me a butt hat.
Maybe Scoop censored what I intended?
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I've got nothing against anyone spending money advertising and trying to convince people to buy stuff for their aching joints (or their limp ones). People want drugs they don't "need" because they want to get pregnant, not get pregnant, get a boner or soothe aching joints? Fine. Get a prescription and buy them. Stuff people "want" isn't supposed to be what insurance is all about.
I've got nothing against truthful advertising.
I've got lots against the medical industrial complex loading people up on drugs they don't need. Among many other negative consequences, it's contributed to an epidemic of opiate addiction.
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Rahm, is that you?
Yes, Donald, it's me.
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My view on why Illinois has problems:
1) We have too much government. This is not liberal/conservative debate over governmental role. This is simply we have too many units of government and power is too diffused. Illinois has more units of local government than any other state in the union. To give you an idea how bad it is, I have 21 agencies collecting off my property tax. That's right, 21! Our little suburb of 20,000 persons is touched by five separate school districts, one of which has only one school. Pat Quinn said something needed to happen about this. Mike Madigan politically garroted him and threatened to do it for real if Quinn ever brought the matter up again. He didn't. These agencies prove useful for parking patronage workers, ensuring loyalty and giving jobs to your supporters.
2) We hate income taxes. OK, we just raised them. But even the goofiest legislator knows the legend of Dick Ogilvie. He was governor who signed into law Illinois' first income tax in 1971. In in 1970 and out in 1972, courtesy of Dan Walker. Every governor since has dodged tax increases. If you watched Madigan in the latest budget fight, he was trying to stick Governor Rauner with the income tax. Didn't work but he did manage to get Republicans to override the governor, which means he has a political edge to his next fight, which will be a doozie.
3) We Love Corruption. We don't know any other way down here. We really don't. In Tennessee, when Governor Ray Blanton was sent to prison for selling prison pardons, corruption was top down and could be cleaned up. In Illinois, it is "bottom's up." It permeates everything we do and brings an inefficiency to government on scale no where else replicated. We've sent Governors, Attorneys General, Chicago Aldermen, Judges, Private Attorneys, you name its galore to prison. And it never stops. Hell, there's one family of Chicago aldermen where father and son both went to prison for accepting zoning bribes 20 years apart.
4) We Can't Say No. We spend money like we have it.
5) Our Government is Our Employer of First Resort. Our tax system likely was originally designed to make industry pay for state operations. As industrym closed, scaled back and moved, somebody had to pick up the burden. The state and city, I'm guessing, hired as much as they could, but couldn't find a way to pay for it. So the boomers sent the bill to the Millennials.
The sad thing is we should be driving the Midwest economy. Our natural resources, highly educated workforce, transportation system and economic support is the best in the region and one of the best in the nation. And yet we have squandered it. Badly.
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My view on why Illinois has problems:
1) We have too much government. This is not liberal/conservative debate over governmental role. This is simply we have too many units of government and power is too diffused. Illinois has more units of local government than any other state in the union. To give you an idea how bad it is, I have 21 agencies collecting off my property tax. That's right, 21! Our little suburb of 20,000 persons is touched by five separate school districts, one of which has only one school. Pat Quinn said something needed to happen about this. Mike Madigan politically garroted him and threatened to do it for real if Quinn ever brought the matter up again. He didn't. These agencies prove useful for parking patronage workers, ensuring loyalty and giving jobs to your supporters.
2) We hate income taxes. OK, we just raised them. But even the goofiest legislator knows the legend of Dick Ogilvie. He was governor who signed into law Illinois' first income tax in 1971. In in 1970 and out in 1972, courtesy of Dan Walker. Every governor since has dodged tax increases. If you watched Madigan in the latest budget fight, he was trying to stick Governor Rauner with the income tax. Didn't work but he did manage to get Republicans to override the governor, which means he has a political edge to his next fight, which will be a doozie.
3) We Love Corruption. We don't know any other way down here. We really don't. In Tennessee, when Governor Ray Blanton was sent to prison for selling prison pardons, corruption was top down and could be cleaned up. In Illinois, it is "bottom's up." It permeates everything we do and brings an inefficiency to government on scale no where else replicated. We've sent Governors, Attorneys General, Chicago Aldermen, Judges, Private Attorneys, you name its galore to prison. And it never stops. Hell, there's one family of Chicago aldermen where father and son both went to prison for accepting zoning bribes 20 years apart.
4) We Can't Say No. We spend money like we have it.
5) Our Government is Our Employer of First Resort. Our tax system likely was originally designed to make industry pay for state operations. As industrym closed, scaled back and moved, somebody had to pick up the burden. The state and city, I'm guessing, hired as much as they could, but couldn't find a way to pay for it. So the boomers sent the bill to the Millennials.
The sad thing is we should be driving the Midwest economy. Our natural resources, highly educated workforce, transportation system and economic support is the best in the region and one of the best in the nation. And yet we have squandered it. Badly.
This is really excellent, especially regarding points 1-4.
Point 5, I'm less sure about. And your conclusion is spot on.
Surprisingly, when it comes to state and local employees per capita, Illinois ranks 44th in the nation, at 205 per 10,000 residents.
http://www.governing.com/gov-data/public-workforce-salaries/states-most-government-workers-public-employees-by-job-type.html
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Some of this, like the residency requirements to get 100% were actually in the pension reform passed in 2013 by the state. But the courts ruled that was unconstitutional because article 8 says you can never change these rules.
I show article 8 in a post above and the court was correct in its interpretation.
The current system cannot be sustained and will blow up. This happens in one of three ways.
1. Tax the hell out of the state. Taxpayers leave, dependent people cannot. The state becomes a giant Detroit. The state is well on its way in this regard as it is losing population (read taxpayers) faster than any other state in the country. 25% of its population is on Medicaid already.
2. Courts rule the state has to pay everyone it owes money too. That is $15 billion now and growing. It can no longer prioritize payments like it currently does. The state cannot pay everyone so no one gets paid. The courts decided who gets partial payments. In other words, the courts take over running the state. This is bankruptcy without using the word. It is messy and ugly.
3. Taxpayers had enough and elect a Walker type and a legislator that agrees with him. He slashes and burns all the spending and pensions and cut taxes. He does this via constitutional amendments, that pass. Unstable lefties crap on the floor of the state capital, Chicago Democrats flee to Milwaukee to orchestrate a resistance movement, public unions strike and the cops stop policing and the trash does not get picked up. A recall attempt is tried. It's ugly, messy and eventually works. But it restores sanity and reasonable/normal levels of spending and taxes.
My bet is on #3. Again that will not be easy.
Regarding #3, Wisconsin's problem was a relatively small budget deficit, mostly as a result of Thompson, McCallum and Doyle not wanting to make difficult decisions and using one-time money to fix biannual budgets.
The pension system was fully funded, or mostly so, when Walker took office. You really can't simply replicate what he did and expect it to work in Illinois
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This is really excellent, especially regarding points 1-4.
Point 5, I'm less sure about. And your conclusion is spot on.
Surprisingly, when it comes to state and local employees per capita, Illinois ranks 44th in the nation, at 205 per 10,000 residents.
What's unclear is how you define state and local employees. Do you just catch state government, counties and cities? Or do you catch the laberenth of special districts that cover Illinois like the dew?
With all the government we have and the myriad of patronage, we can't possibly be 44th!
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What's unclear is how you define state and local employees. Do you just catch state government, counties and cities? Or do you catch the laberenth of special districts that cover Illinois like the dew?
With all the government we have and the myriad of patronage, we can't possibly be 44th!
Yeah, my tax bill is a doozy. I have a separate line item for a Mosquito Abatement district. WTF?
And I pay property tax to support the DuPage County Airport. Aren't airports supposed to be revenue sources? Not ours. So I subsidize all the rich guys who land their private planes there and hang out in the ultra swanky pilot's lounge. And let's not forget the golf course they built on airport property that was hemorrhaging money because no one was playing on it. Their solution to make it profitable? It was to - wait for it - increase the greens fees. Because the best way to get more business is to raise your prices.
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You are not alone regarding too many government officials and fiefdoms. My county has more elected officials than congress.
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(http://3.bp.blogspot.com/-IocRK---aF4/VAAYOVVr9bI/AAAAAAAAYL8/4wtS2aNgBqo/s1600/this%2Bjust%2Bin%2C%2Bthe%2Bbears%2Bstill%2Bsuck!!.jpg)
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What's unclear is how you define state and local employees. Do you just catch state government, counties and cities? Or do you catch the laberenth of special districts that cover Illinois like the dew?
With all the government we have and the myriad of patronage, we can't possibly be 44th!
Well, it's not how I define it, it's how the U.S. Census defines it.
I agree that the excessive layers/numbers of local governments in Illinois need to be consolidated, but at the end of the day, it won't make a huge difference in the number of local government workers.
There's no need for a one-school district in the suburbs, but when you fold that district into a larger neighboring district, you're still going to need the same teachers, bus drivers, custodians, etc. You'll rid yourself of some overhead and duplicated specialist/administrative posts, but that's a relatively small number compared to the total.
If you get rid of townships - and Illinois should - you still need employees to pave and plow the townships' roads, drive the senior bus, distribute General Assistance, etc. They'll just become county employees instead of township employees. Again, you'll get rid of some administrators and the like, but relatively speaking, not a huge number.
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Yeah, my tax bill is a doozy. I have a separate line item for a Mosquito Abatement district. WTF?
And I pay property tax to support the DuPage County Airport. Aren't airports supposed to be revenue sources? Not ours. So I subsidize all the rich guys who land their private planes there and hang out in the ultra swanky pilot's lounge. And let's not forget the golf course they built on airport property that was hemorrhaging money because no one was playing on it. Their solution to make it profitable? It was to - wait for it - increase the greens fees. Because the best way to get more business is to raise your prices.
Oh, gosh no. The large majority of airports lose money. But they're potentially outstanding as engines of economic activity. So while the airport itself loses money, it creates prosperity all around it.
Golf courses, on the other hand, are money pits.
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Yeah, my tax bill is a doozy. I have a separate line item for a Mosquito Abatement district. WTF?
And I pay property tax to support the DuPage County Airport. Aren't airports supposed to be revenue sources? Not ours. So I subsidize all the rich guys who land their private planes there and hang out in the ultra swanky pilot's lounge. And let's not forget the golf course they built on airport property that was hemorrhaging money because no one was playing on it. Their solution to make it profitable? It was to - wait for it - increase the greens fees. Because the best way to get more business is to raise your prices.
I feel your pain. We used to live in Naperville.
Now we have the Lake County mosquito abatement district and the Waukegan Airport on our tax bill as well.
Republicans can spend big dollars on make work projects just as easy as Democrats can.
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I feel your pain. We used to live in Naperville.
Now we have the Lake County mosquito abatement district and the Waukegan Airport on our tax bill as well.
Republicans can spend big dollars on make work projects just as easy as Democrats can.
Illinois is a Home Rule State. Assert your local power.
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Illinois is a Home Rule State. Assert your local power.
Keep in mind, we did.
We wanted term limits. Friends of Mike Madigan struck the initiative down.
We wanted an independent commission to draw legislative districts too. Like Iowa. Friends of Mike Madigan went to a friendly judge and got that one struck down too.
Doesn't matter what we do. When Friends of Mike Madigan control the legislative and judiciary branches, we're in trouble. When Friends of Mike Madigan are in patronage positions across the state, we're in trouble.
There is a difference between what the law says and how a state operates. We have elections every two years. So did the Communist Party of the Soviet Union. Same result!
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I've got nothing against truthful advertising.
I've got lots against the medical industrial complex loading people up on drugs they don't need. Among many other negative consequences, it's contributed to an epidemic of opiate addiction.
Again, people don't need to get boners, pain relief, pregnant or not pregnant. They want to. So they load themselves up on these drugs they don't need. As far as opiate addiction is concerned, the people who get hooked using the drugs as prescribed have my sympathy. The ones who get scrips for the purpose of getting high? Not so much.