Are Union Entitlements Bankrupting Illinois?

Are Union Entitlements Bankrupting Illinois?

The City of Chicago and the State of Illinois are having a difficult time paying their bills to vendors.  Both governments are struggling to stay afloat as the deficits rise every year.  It doesn’t seem to matter if we have Blago in office or Governor Quinn. The State of Illinois will be running a $8.3 million dollar deficit by the end of the fiscal year, June, 2012.  This is a huge deficit especially after the State received billions from the recent tax increases!

The City of Chicago is not faring much better with a deficit of over $600 million dollars based on an overall budget of $3.2 billion.  It is predicted that the City’s deficit will be at $800 million within two years if drastic cost cutting changes are not made.  Daley left Rahm Emanuel a mess of a budget, but can Rahm really make the changes needed to insure a fiscally responsible government?  Maybe.

In addition to the City of Chicago and the State of Illinois, the Chicago Public Schools are anticipated to have a $720 million dollar deficit separate from the City.  The Chicago Transit Authority has an expected deficit of $277 million dollars!  All of the State’s government agencies are severely in the red, but why?

The biggest reason for these deficits is the entitlement programs that the State and City can no longer afford to pay its workers.  These entitlements include pensions and benefits.  There has been an increase of fraud happening by government workers attempting to insure they get the maximum entitlement programs before they retire.  They are banking are the current system to take care of them for the rest of their lives.  Many workers are long-term employees that are making competitive wages to the private sector. So why should they get entitlements?

When the economy is fluid, the stock market is stable and real estate prices are high, we as a society don’t pay much attention to the entitlement programs in our State and Nation.  This is the worst economy since the Great Recession and the strain of keeping up a lifestyle that many of us have learned to enjoy is become more difficult everyday.

It seems in Illinois that it’s either the long-term politician or government employee or the CEO fortune 1000 companies making all the money.  The government workers are guaranteed income for life and the CEO’s are making so much money they can maintain their high lifestyle and still save money.

But, what about the rest of us that pay 20-35% in taxes?  Many of us have small businesses that are struggling as we are attempting to make a living.  We see our government at the federal level threatening to take away the only entitlement program most of us are currently entitled to, which is Medicare and Social Security.

I would strongly suggest before they screw around with my social security that our lawmakers end their entitlements, along with many of the government employees that have become too comfortable in our trying economy.  The reason our economy is not coming back quicker is because our policy makers are offering no assistance to small businesses that built this country.

What do you think?

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  • The short and the long answer is YES! Unions for government workers were not legal until the 1960s. Even Franklin Roosevelt understood that gov't unions were a bad, bad idea. Gov't unions should be eliminated totally. They should be illegal because unions pay politicians to get favorable rules, laws and regulations, and politicians take more money from them to do so. Guess who is cut out of the process? Voters and taxpayers. WE get screwed while unions and politicians enrich themselves on our backs. Unions are antithetical to good government.

  • In reply to publiusforum:

    Thank you for your comment. We, of course, are in agreement. I appreciate you taking the time to respond.

  • There are several essential problems:

    1) Any reform by the state or localities is a chimera. Illinois has a constitutional balanced budget requirement, but even the Republicans contend that was met in FY 11-12, notwithstanding that nothing from the tax increase was applied to the existing backlog, and Topinka says that state agencies are not turning over invoices to the Comptroller's office to evade the requirement to pay interest under the Prompt Payment Act.

    2) Besides the sense of entitlement felt by state workers, apparently someone (the unions or whomever) give them unvarying talking points that appear on newspaper comment boards and the like, and undoubtedly are being pawned off on the legislators who are beholden to those groups. In this area would be the constant "we paid our contributions, the politicians didn't, so give us our pensions." When one mentions that the entirety of the 2 percentage point income tax increase went to pensions, they say "well I paid the 2%, too." Maybe so, but when they drive all private employers out of the state, they will have to pay all 100% of their salaries in taxes to cover their wages, plus their 9% contributions. So, the math doesn't work either way.

    3) Cullerton has fostered an extreme interpretation of the state constitution Pension Clause, acting like existing state employees are like U.S. Supreme Court judges. If he really believes that, he hasn't proposed a constitutional amendment to take care of the problem. Of course, the criminals in the legislature also torpedoed Con-Con, using as one of their arguments that it could strip state workers of their pensions, even though it would be impossible to strip those of credits already earned, as opposed to benefits to be earned in the future.

    4) Then you have governors like Blago and Quinn who think that making promises and buying votes (such as Free Rides for Seniors) have no cost, and in Quinn's case, that he can make labor contracts and get out of them, when the Illinois Public Labor Relations Act says that an arbitrator can enforce them--much to Quinn's shock. So long as the craven or the fool runs this state, it won't get better.

    I don't see why persons rendering services to the state, including to state employees, continue to do so, when they know they won't be paid for maybe a year. Maybe if they quit, and maybe if the money situation gets so bad that state employees can't be paid and have to be laid off en masse, and those dependent on the state find out that the benefit well has run dry, will the situation change. However, given the mentality of voters, at least in Cook County, it will take something that drastic.

  • Jack, thanks for your thoughtful and well-documented comment. I think that if the politicians didn't receive entitlements they would vote quite differently. Running scared, the U.S. worker is looking for someone to take care of them and government pensions are becoming as popular as gold, now.

  • Public sector unions weren't created to secure votes for Democrat politicians, they were created to ensure that our public servants could do the work of the citizens without fear of losing their positions, pay, or benefits every time a new administration was elected. Their pay and benefits were negotiated in good faith by administrators appointed by the politicians we elected.

    Let's not forget the fact that public employees forgo participation in FICA and contribute an additional 2 to 3 percent on top of a private sector employee's 7.5 percent for their state-provided pension. They can't collect Social Security. It is not the state employees that are not meeting their part of the agreement and failing to fund the plan. A big part of the shortfall comes from pension holidays - Wall Street pension managers instructing administrators not to make the State's contracted contribution while the market is performing well. When the market drops, the fund suffers in an exponential manner.

    We can all agree that administrators and pensioners that manipulate loopholes in the pension system to create retirement pay equal to or in excess of an employee's annual earnings is reprehensible. Since this is the exception and not the rule, it is no more egregious than the waste of taxpayer dollars for flying a certain governor from his home in Chicago to Springfield because he chose not to live in the housing already provided.

    All waste for personal gain - whether it is patronage jobs, no-bid contracts, preferential vendors, or legislation that enables a certain group to not contribute its fair share in taxes - is a betrayal of the public trust. The time for us to have gotten angry was long ago. I seem to recall much of the State's fiscal problems beginning when a certain governor decided to suspend collection of gasoline taxes to ease our pain at the pumps.

    This problem is only going to get worse once assessed valuations are lowered to match real estate market valuations. Our state was mismanaged when everything was going its way and revenues were flowing in. With revenues declining, we have to consider long-term solutions that won't compromise the value of our infrastructure and education - the very things that truly benefit the citizens and businesses of Illinois.

    Succumbing to the idle threats of corporations and scapegoating public service employees isn't going to balance the budget. Letting those that can afford to pay avoid paying their fair share while furloughing those that make our state livable is a sure recipe for achieving bottom-of-the-nation status in education and infrastructure. At that point, it won't matter to a business if we have the lowest tax rates (like Texas or Mississippi) - we'll have nothing else to offer...

  • Thanks for your comment, Brent.

  • Was this just posted to get hits? This is hardly news in this state, especially with the Illinois is Broke site right here on CN.

    Existing and future pensions need to be capped to $100k and not a penny more for anybody. Nobody should need more than that at the end of their life when the kids are gone and the house is paid for. When you have retired state policemen getting $150k/year and school supers getting $250K/year the system is broke. Cap 'em and say tough luck.. the state is broke and can't pay its bills to people that actually earned it.

  • Hi Bumsteer! No, I rarely post articles for hits, just one's that I think are worth reading and helpful. I like your idea of capping the pensions to $100K. That's a nice good-bye package and fair. At one time, government workers were making far less than the private sector; not anymore. There is no reason we should be paying for these pensions when the wages and benefits of the public sector are beginning to outpace the private sector. Thanks for your comment! T

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    Bumsteer, I'm a little late here, but I can tell you this is all for hits.

    On your topic, there probably are people that need more then 100k at the end of life... I think I would; regardless, I do agree with you that government workers should be capped much sooner then they are... if I was governor I would cap them at $49,753 on 98% of pensions, allow $75,000 for simply a few and far between.

    Ms Terri Lee Ryan, I think you should be in some kind of HeadHunter show or something, just my opinion.

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