Educating graphs on IL education

In this graph, the amount of money going to retirement benefits begins to look like Pacman, eating the ghost of Illinois’ future.

Tom Elia has more.

Clearly, legislators — if they are serious — are going to have to find a way to prevent retirement benefits from eating all available resources. Whether they can get serious, or even want to, is the real question. I suspect that if anyone in Illinois tries to get a handle on this looming and outsized bill coming due, they will be subjected to the same thuggery and hysteria we have seen play out in Wisconsin this past year.

UPDATE: Instapundit links!, thanks, Glenn Reynolds!

UPDATE II: More obnoxious pension news out of IL

About Elizabeth Scalia
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  • Bro AJK

    Dear Elizabeth,

    You have an italics tag that needs closing on this post. After you find it, feel free to delete this.

    [Thanks for the headsup. I need a new mouse! -admin]

  • kenneth

    irst off, you needn’t worry about “thuggery” because Illinois legislators won’t try to get a handle on this. This is Illinois. Engaging serious public policy issues is not what our lawmakers do. Ever. I spent a legislative season in the state house new bureau so I saw the sausage being made.

    The problem I have with the Wisconsin scenario is that it pretty much villainized teachers and public employees as a class of people. Teachers especially are increasingly presumed to be goldbricks and parasites for the unconscionable act of making a middle class living and decent retirement for a hideously difficult and unappreciated job. They were painted as the sort of bloodsuckers that we used to associate with the billionaire class. Wisconsin’s governor, a water boy for the 1%, ironically and masterfully managed to make the middle class the enemy.

    The problem with Illinois pensions is not, primarily, greedy teachers. It is a state government which essentially skimmed its pension systems like the mob used to do to the Teamsters. Pension systems ain’t rocket science. It’s plug and play math. You know how many teachers will retire at what age, how long, on average, they will live, and how much money you need to sock away every year to cover that when the bills come due.

    For at least 30 years now, Illinois has simply blown off those figures and pocketed the money that was supposed to be socked away for retirees. Like America at large, we’re a state that loves to do socialist spending on a libertarian tax system. One of the easiest ways to paper that over was to simply not make the pension system payment each year. We’ll catch up with it later, the thought went.

    Well, later is here, and due to the magic of investment interest, the dollar you needed 25 years ago now becomes $100, or $1,000 to pay. The pension system is starving because our “glorious leaders” gorged themselves on the seed corn in years past. Politicians, of course, aren’t big on the whole personal accountability thing, so the blame will be shifted to teachers, and the crunch will be on to steal the retirement benefits they signed on for in good faith when they entered the profession.

    You’ll find all sorts of other interesting things when you “follow the money” in Illinois. We have a flat income tax, which means that billionaires pay the same rate as minimum-wage burger cooks. Actually, the billionaires more often than not pay nothing at all. Every time a major corporation in the state makes the slightest rumble about relocating, we write them huge tax breaks for a decade or more.

    We do that on the theory that we’ll make more in the long run if we keep those jobs here. Every time we sign over a bazillion-dollar tax break, the company announces massive job cuts or offshoring. We just recently had that happen with Sears. They announced they were closing 120 stores before the ink was even dry on the tax break. For years to come, the working poor and the dwindling middle class will subsidize the tax break we gave a company to cut jobs. If some black single mom pulled that scam with $300 in food stamps, there’d be hell to pay, but when a corporation snows us, we shrug and say we’ll do more diligence next time. We won’t, of course.

  • Sharon

    I live in the grand pig trough of Illinois, where 80% of the people get some type of entitlement, 53% of babies are born on Medicaid and you can make $70,000 and still get food stamps. (I know no one will believe me, but I had a little talk with a conservative state Representative and got these numbers.) I also remember, as a teenager, being told by the powers that be that if we just approve a state lottery system we’d never have to worry about education funding again. I really have no hope that there will be any solution for Illinois’ debt problem coming from our “leaders” in the state capital. Since we live so close to the border with Missouri, I am negotiating with my DH a move to west. But one can only run so far……..

  • Sharon

    Darn it. “to the west”

  • Andy Freeman

    Sorry Kenneth, but the unions owned the IL govt, so if you’re blaming the govt, you’re blaming the unions.

    And, if you think teaching is “a hideously difficult and unappreciated job’, you need to get out more.

    Public employee retirees are going to be asking folks without guaranteed pensions to pay for guaranteed pensions. That’s going to be a hard sell.

  • John

    kenneth, I think that public school system administrators and managers, and that public services managers and administrators (county, state, city employees), absolutely ARE: “goldbricks and parasites.” I live near the center of corruption, Washington DC, and can confirm from first-hand observation that a lot of people are getting a lot of money to do nothing of value (e.g., the wonderful savior of the stupid, the CFPB, has a job posting for invitations coordinator that will pay $56-103K… http://www.usajobs.gov/GetJob/ViewDetails/306225500 !).

    Also, retiring at age 55 or 65 and expecting to be paid as much as when you were working for 20-30 years and boosting this pay by gaming retirement system via spiking or cashing out unused sick days etc, is institutionalized theft. Public employees who expect to live well doing absolutely nothing for money, while taxpayers who work for private enterprise are working into their 70′s and contributing means that those public employees are the enemy.

  • wtfci

    This problem is too big to fix. Honestly. I grew up in Illinois and moved because of this. The long term fix is to gobble up more capital from the employees of private enterprise via more fees, taxes, property taxes, etc.

    There is no voter will to break the ironfist of Michael Madigan.

  • Arie

    Who negotiated a state pension without negotiating proper funding for the pension? The teachers’ unions, I would guess. So while I am sympathetic to hard-working teachers, I think there is some collective guilt on their hands. They could have lobbied for better pension funding. They didn’t. They chose to be complicit in an effort to pass the bill to future generations, and bear some responsibility for its failure.

  • John

    This statement is nuts:
    “For years to come, the working poor and the dwindling middle class will subsidize the tax break we gave a company to cut jobs. ”

    That is numerically impossible. The working poor and lower middle class don’t pay enough. Also, a tax break is not subsidized. Letting people keep their money is not a gift. Taxes are what companies and people pay to have a good society. Just because you don’t like the freeloading corporations doesn’t mean there are not a lot of freeloading individuals.

    All that baloney by Elizabeth Warren that ‘no one got rich on his own’ is dumb. Rich people don’t get free stuff from poor people. The poor people don’t have any excess to give. Roads and police and health care are paid by upper middle class taxes and corporate taxes in the US. Not by sales tax or payroll taxes that are paid by the ‘poor.’

  • Richard Aubrey

    Kenneth.
    Are you aware of any public retirement system which funds its defined benefit plans to any useful fraction of the actuarial requirement? If any did, we wouldn’t be having this discussion in any state or county or municipality because…the question wouldn’t arise.
    I followed the WI fuss last year. I see Walker taking the position that the teachers’ union leaders were the culprits. Did you note how much money was saved when health insurance was opened up and the union’s tame insurer had to meet competition? That had nothing to do with greedy teachers. May cut some give-backs to the union leaders.
    But I’ll tell you how greedy the teachers are…when the union dues are to be collected voluntarily, some of the greedy teachers declined.

  • Bob

    Illinois won’t solve this problem.

    While pension benefits can be promised, rates of return cannot and taxes cannot always be raised to fill the gap. Politicians get elected by making promises of goodies to their supporters and by not raising taxes.

    The fact that teachers and their unions have gone along with charade is evidence of their complicity or stupidity. In Wisconsin, the teacher’s union was forcing school districts to buy health insurance from them a dramatically inflated prices. Eliminating that and competitively bidding health benefits allowed districts to hire back or hire new teachers without dropping salaries.

  • Barb

    Wisconsin’s teacher’s unions and the public employee’s unions made their members look bad by refusing to accept the fact that the rest of Wisconsin’s citizens cannot afford to pay for the benefits that had been negotiated into their contracts. My husband is a public employee who supports Scott Walker because in good conscience he could not ask our neighbors, who are suffering, to continue to pour money into his pension and insurance. Deflecting the argument to evil corporations does not change the fact that the public employee unions were sucking the state dry. Also, the union leaders used the union member’s dues to live lavish lives similar to those of the presidents of the evil corporations, and the public employees were forced to belong to the unions and support those lifestyles.

  • apb

    Kenny -

    The problem with Illinois is the crappy education product – directly related to the parasitic teachers union. I just love to see that worthless sack-of-fat Karen Lewis trying to justify pay increases and pensions for a system that produces a 56% high school graduation rate.

    As for a ‘decent retirement,’ I’ve seen too many years in my suburb where a K-3 babysitter makes $65K for 9 months, announces retirement 4 years before doing so, and ends up at $70K starting retirement at age 55. Including COLAs, that ‘decent retirement’ can net out over $2.5 million.

    Here’s a real solution – eliminate all special retirement programs and put all politicos and union members on social security and 401(k). The would put them on equal footing to those of us that are actually paying the tab.

  • http://classicalvalues.com TallDave

    “It’s plug and play math. You know how many teachers will retire at what age, how long, on average, they will live, and how much money you need to sock away every year to cover that when the bills come due.”

    Yeah, and the math DOESN’T WORK. Illinois gives anyone who works 20 years free healthcare for life. Not workable. They let teachers retire so early they collect retirement twice as long they’re in the workforce. Not workable.

    Public employee unions should be ILLEGAL. They exploit taxpayers whose only representation is in the form of politicians who are only too happy to shovel money at the unions in return for political support. The notion that public employees need collective bargaining to protect them from taxpayers is asinine.

  • Peggy R

    My huz would like to cross the Mississippi into MO as well. But, we’d have to live way west of the city. Family is on this side of river. We’re in a small town w/good public school district from which we need services.

    The unions own this state. Things are hopeless. The gay movement owns this state too. Did you see the bullying of Card George until he backed down?

  • Mama73

    I used to work in Higher Education in Illinois. What this graph doesn’t show is how much of this isn’t going to profs and other instructors, but to worthless admin. I was on the admin staff, and I could be there still, reaping a 40k salary for 10 hours of work a week, getting next to free healthcare, and a pension. But I decided not to do it and quit (bad karma).

    Unfortunately, lots of folks in admin can wind up in the situation I was in and not feel guilty about it. Departments get money based on how much they spend, to keep the funding they’re likely to make unwise hiring decisions and purchases, and no one likes to FIRE anyone — plus the contracts make it nearly impossible.

    Glad I quit. Oh. And P.S., I cashed out of the retirement pension scheme so you don’t have to worry about funding my golden years.

  • Greta

    There should never have been a union allowed into the public sector. It was negatively viewed and blocked by even FDR. few understand it did not exist until 1959 when the then Democrat NY city mayor was losing and got the bright idea of allowing all the employees in the city to unionize thus insuring his reelection. this was not lost to those on a National level and it spread like wild fire. You have to understand that by 1960, unions were about dead in the private sector for very good reasons. They often negotiated deals which in the end killed the jobs because it was no longer practical to have these jobs in that state and later even in this country. Few realize that even today, the federal government employees cannot unionize. Of course they do not have to because they feed their own with a huge pot of gold in tax revenues.

    Another ugly fact is that the unions in the public sector have formed what should be an illegal alliance with the Democratic Party. Most cities have been in Democratic hands and they receive massive donations from the very unions they will upon election or reelection turn to for negotiation of new pay and benefits. So they get direct payment donations, union voters and union thugs to get out the vote, and they return the favor with massive benefit programs. Anywhere you see Democrat control of city or state for any length of time you will find a ton of things not funded and called “entitlements” so that anyone who even attempts to change it is stealing something that the person is entitled to. If the Democrats legalized bank robbery and got donations from the crooks and the cash taken became an entitlement as a result, then returning the cash to those it was stolen from would be viewed as evil because the robbers were entitled to that cash. First unions should not be allowed in the public sector ever. Second, if they are allowed, they should not be allowed to work for one party or donate to a party and only donations from the union employees should be allowed with no use of dues for these payoffs. third, if you can’t get this right, then no party or person who received payoffs and support can be involved in any way in negotiations, only those who were not paid off or supported.

    This is potentially far greater than the home value problem going forward for most states and local cities. The word entitlement needs to be banned until the USA is debt free and we have balanced budgets and then used only if it is paid for now and into the future. any projections radically wrong should put those who created it in jail.

  • Mama73

    One more nugget: good liberal friends of mine don’t see this as a problem. They know we are obligated by the Illinois constitution to pay for pensions, but they figure they’ll change the constitution in a few years — possible, if difficult.

  • rasqual

    The dire state of things here in Illinois has me wondering whether the Combine sent their junior Senator off to Washington precisely so he could be on hand to read the Illinois bailout script from a teleprompter.

  • Former Illinois Resident

    Moved out of Illinois a couple of years ago. Have a friend who works in the State Government – told me of a physician that is within 5 years of a typical retirement age who is trying to get a state job because he knows that if he works at the state for 5 years he’ll get a full state pension. He is not looking for a role as a physician, but instead is interviewing for a role that has very flexible hours, pays well and will allow him to continue with his practice – all the while getting a state salary and a state pension. Because of the way that employees are hired (method dictated by the unions) they can only ask questions that have been preapproved by the HR department – which means they can’t ask why he wants the job, even though it is common knowledge. It’s no wonder the state is going down the tubes.

  • fiestamom

    Kenneth, it’s immoral to make a 99% high school burger flipper at McDonalds have part of his paycheck confiscated to pay for a teacher to have a 1% retirement package. Or to make a 99% teenage bag boy at a grocery store to pay for 40 years of retirement for a public school administrator. Immoral.

    Unfortunately, I’m facebook friends with a lot of former federal employees in their 60′s who are on FULL pension retirement. It sickens me that my paycheck, my husband’s paycheck, and even my teenager’s paychecks pay for them to travel the world, while my own parents who owned their own business are their age, and are still working. Yes, I realize I sound like a democrat complaining about class warfare. But I’m sick of paying for them NOT to work! And hearing the news that the number of federal employees who make over $100K has exploded since 2006, Obama is slashing military vets employment, and is now going to give federal employees a raise. There’s two Americas alright.

  • rasqual

    Actually, what’s immoral is making those not paying federal INCOME taxes think they’re not paying anything, when sales taxes and the high cost of food and other products is merely the consumer consequence of regulation and other taxes they just never see as such.

    When lower income folks come to realize that they ARE paying through the teeth for government waste and crony corporatism, then they’ll make common cause with the tea party instead of being useful idiots for class consciousness rabble rousers.

    The peculiar burden of the perceptive is to educate, not merely win elections.

  • RGL

    An Illinois pundit in response to Republicans calling Obama administration “a monarchy” said, and I paraphrase: You have it all wrong. Obama is not a king, he is a “Chicago Boss.” Chicago bosses do what they want no matter what anyone else wants. Apparently this is is the system – like a cancer – that has grown in that environment which has mestatasised to D.C. from Chicago. It makes for entertaining books and movies, but scary when our form of government is being eroded to the point of sabotage. The graphic showing the disappearing funding for higher learning does look just like pacman. And what are we doing about it? We, the little people, still have some power left. Before it is taken away, use the voting booth before that gets gobbled up, too! Register to Vote! Write Your Congressman/woman! Pray!

  • Elaine S.

    I am an Illinois state employee and NOWHERE have I ever heard that it’s possible to get a “full pension” after only 5 years of work. I think that may be true in the General Assembly retirement system for legislators, but that absolutely does NOT apply to most state workers employed by the executive or legislative agencies.

    The rule for most employees under the State Employees Retirement System is that your age plus your years working for the state have to add up to 85 before you can retire (this is known as the “rule of 85″). “Former Illinois Resident’s” friend’s doctor friend would have to already be 80 years old, or have already had some kind of state job in the past that gave him pension credits, in order to meet this criteria by working only 5 years.

    Also, in SERS your pension takes 8 years, not 5, to vest. Finally, the amount of pension you get increases by a certain percentage for each year you work, so most state employees have to work between 15 and 20 years to get their maximum possible pension. You might want to ask your friend to verify his information.

  • Elaine S.

    “The problem with Illinois pensions is not, primarily, greedy teachers. It is a state government which essentially skimmed its pension systems like the mob used to do to the Teamsters… For at least 30 years now, Illinois has simply blown off those figures and pocketed the money that was supposed to be socked away for retirees. … We’ll catch up with it later, the thought went. Well, later is here, and due to the magic of investment interest, the dollar you needed 25 years ago now becomes $100, or $1,000 to pay. The pension system is starving because our “glorious leaders” gorged themselves on the seed corn in years past.”

    Although I am normally no great defender of unions, and do not belong to one myself, I have to say that Kenneth’s take on the pension situation is accurate. It is not solely the fault of allegedly greedy workers — many, many years of shortsighted mismanagement, by elected officials of BOTH parties, is also to blame. Meanwhile, state employees have been faithfully making THEIR prescribed share of pension contributions all along (yes, they do pay a share of their pension, and they cannot get away with “skipping” those payments!). No one person, political party or class of people got us into this situation, and no one person/class/party can dig us out of it.

  • doc

    Kenneth, if Wisconsin teachers and public sector employees didn’t want to be villianized, they shouldn’t have acted like criminals in occupying the state capitol. If you don’t want to be perceived as a thug, don’t act like a thug. And public sector unions these days seem to specialize in thuggish behavior. Let’s face it, their whole purpose in this country is to elect Democrats. They no longer give a damn for workers, the children, or the society as a whole.


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