Illinois Supreme Court Ruling

[ERhoosier]

Quote:

Originally Posted by Texas Proud What some people do not get is that really rich people (and probably just rich people) can move a lot easier than others... Taxing 'the rich' to pay for unsustainable spending will not work... look at Detroit as an example...

So true. Having grown up in Metro Detroit I watched as 1st the wealthy, then the UMC, and finally the MC migrated out to the suburbs...or out of the state entirely. MI was 1 of just 3 states to lose population in 2010 US census when other states were growing.
Michigan One of Only Three States to Lose Population Since 2010 Census
As some in the Chicago media have noted that it may be well on its way to following Detroit into bankruptcy.
Supreme Court throws wet rag on pension plan - Chicago Sun-Times
Although the issue is still working its way through the courts, bankruptcy has generally been held to be a Federal issue and so trumps state laws. If Chicago eventually follows Detroit into insolvency, the IL Supreme Court ruling may have as little practical impact as a similar constitutional provision had in MI or CA laws did in the Stockton case.
Bankruptcy
Appeals court to hear Detroit bankruptcy case
Judge rules Stockton, Calif., to enter bankruptcy - Businessweek

[longranger]

I did not mean to trivialize the importance of adhering to the law. I am deeply concerned for both the pensioners and society at large. These programs were designed to be front funded. It is just beyond my understanding how corrupt our government has been to be able to underfund these programs so severely.

[gcgang]

With all this talk of retirement taxation, maybe the State can get around the Court decision by paying full retirement benefits but implementing a tax on them.

[Chuckanut]

Quote:

Originally Posted by longranger I did not mean to trivialize the importance of adhering to the law. I am deeply concerned for both the pensioners and society at large. These programs were designed to be front funded. It is just beyond my understanding how corrupt our government has been to be able to underfund these programs so severely.

One of the sad things is that some of the entities that have underfunded their pension plans have also elected NOT to participate in Social Security. The gubmint entity saved their contribution to SS at the same time they were underfunding their own pension system. Or am I wrong?

In any event the poor employee finds out not only may the pension reduced (see Detroit), but they don't qualify for much of a SS benefit.

[steelyman]

Quote:

Originally Posted by gcgang With all this talk of retirement taxation, maybe the State can get around the Court decision by paying full retirement benefits but implementing a tax on them.

That's what I thought too, and before I retired (I still do). All retirement income, for both the public and private sectors. This was proposed as part of a joint study by economists, along with other reforms such as phasing in defined contributions and moving to a progressive tax. Those ideas did not gain traction.

I think I misread what the annuitants' association sent me.

[clifp]

Quote:

Originally Posted by Chuckanut One of the sad things is that some of the entities that have underfunded their pension plans have also elected NOT to participate in Social Security. The gubmint entity saved their contribution to SS at the same time they were underfunding their own pension system. Or am I wrong? In any event the poor employee finds out not only may the pension reduced (see Detroit), but they don't qualify for much of a SS benefit.

No you are right an astonishing number of state and local governments (presumably with the consent of their unions) opted out of paying into Social Security.

I was always surprised that they were allowed to do so. My guess is once or twice a century the 10th Amendment matters.

At the time I'd imagine the state governments didn't want to spend more to pay into Social Security. It probably wasn't to hard a sell since very few public sector jobs pay below the median wage, and social security benefits are highly skewed for workers making below average wages.

But now public employes risk really being hosed.

[Chuckanut]

I agree that taxing will probably be used to reduce pension pension payouts in those areas where pension income is treated more favorably than regular earnings. I expect we will see SS reductions also using the back door taxation approach.

[Mulligan]

Quote:

Originally Posted by JoeWras Grew up in IL. Now live in NC. We pay a lot of income tax here in NC. But property tax is much lower. I will be paying a lot in income tax through retirement here in NC. It will be something that may cause us to move. We shall see. We just had some tax reform and I need to study the effects of it as I move to retirement. What blows me away about IL is the retiree income exemptions. Right now, as I manage my Dad's finances, it is great! Way to go IL for giving Dad a breatk! But boy there are so many different chickens of all types coming back to roost. So many things favor the pensioner in IL. Great idea, but it is scary when the pool of payers keeps shrinking.

I had a buddy who recently moved across the river to Illinois and was bragging how his pension was now state income tax free. Well the bragging ended quickly when he got his property tax bill from his house he bought there. Close to triple what he was paying for a similar size house in MO.


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[Mulligan]

Quote:

Originally Posted by Chuckanut One of the sad things is that some of the entities that have underfunded their pension plans have also elected NOT to participate in Social Security. The gubmint entity saved their contribution to SS at the same time they were underfunding their own pension system. Or am I wrong? In any event the poor employee finds out not only may the pension reduced (see Detroit), but they don't qualify for much of a SS benefit.

Plus they will not be part of the PBGC either. My pension system had a one time vote back in the 1950s I believe to join or not and it was rejected. My system is in pretty good shape fortunately. Though I guess if it went to zero it wouldn't be a total loss. My WEP SS check out about $100 when turning 62 would go up a few hundred bucks.


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[Greencheese]

This state is in a long slow path to destruction. It doesn't have the great weather of California or nature that many other states have like Colorado. If memory serves correctly taxes are much higher in IL than all surrounding states. Major employers such as State Farm are moving 10,000 jobs to AZ, GA, and TX while companies like Caterpillar and Deere are being courted by several other states with attractive tax offers. I believe illinois also had a net population loss from the last census as well.

There was a study a month or 2 ago about which states were hated the most by the people who lived in them and IL won by a long shot. People don't like living in Illinois except for the jobs, and many of the jobs are leaving. While I believe the government needs to uphold their promises you simply can't squeeze blood from a turnip.

[steelyman]

Well, I'm an Illini and will be in heart forever. Born in Chicago and happy to see the crops in place.

[Mulligan]

Quote:

Originally Posted by Greencheese This state is in a long slow path to destruction. It doesn't have the great weather of California or nature that many other states have like Colorado. If memory serves correctly taxes are much higher in IL than all surrounding states. Major employers such as State Farm are moving 10,000 jobs to AZ, GA, and TX while companies like Caterpillar and Deere are being courted by several other states with attractive tax offers. I believe illinois also had a net population loss from the last census as well. There was a study a month or 2 ago about which states were hated the most by the people who lived in them and IL won by a long shot. People don't like living in Illinois except for the jobs, and many of the jobs are leaving. While I believe the government needs to uphold their promises you simply can't squeeze blood from a turnip.

I wouldn't be surprised at all if the southern half of the state could pass a referendum to secede and form the 51st state if it were legal.


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[steelyman]

Quote:

Originally Posted by Mulligan I wouldn't be surprised at all if the southern half of the state could pass a referendum to secede and form the 51st state if it were legal. Sent from my iPad using Tapatalk

There's a saying that there's Chicago, and then everything south of I-80. I used to be the first, now I'm Down There.

[ERhoosier]

Quote:

Originally Posted by steelyman There's a saying that there's Chicago, and then everything south of I-80.....

Similar saying about Detroit vs rest of MI.

[Greencheese]

This election map pretty much sums up Illinois voting... Chicago vs everyone else

http://graphics8.nytimes.com/package...vernor_375.png

[MichaelB]

Thanks for an interesting discussion.

Porky Pig Cartoon Ending "That's All Folks!" - YouTube