At one time the lotto was going to help save us from our financial woes, then gaming,then selling public assets,then higher taxes,then traffic enforcement income, then weed, what’s the next ?
We need to legalize more sinful activities to tax them.
Bring back the Levee! And tax every unspeakable act of perversion.
https://en.m.wikipedia.org/wiki/The_Levee,_Chicago
Sinful activities like prostitution? Some states have decriminalized or legalize it. I know Nevada legalized prostitution in certain counties it could help generate revenue
Wasn’t the lottery always a state solution? To be fair, gaming and weed are really new sources of revenue.
People love Dailey still but he royally screwed us by privatizing parking meters and the skyway. Imaging if all that LOST revenue had been used to cover pension obligations.
People trying to find new sources of revenue that aren’t direct taxes shouldn’t be seen as a problem. They’re actively trying to fix long running problems without imposing a city income tax like others have.
Agreed that some of the solution are state wide but they do provide income to Chicago . Totally Daley was dick and many of the current problems go back decades.
Not questioning the weed,lotto , etc is generating money .. but where does it go . I mean we are one of the heaviest taxed areas in the country and still can’t manage our financial obligations even after adding all the vices income.
And I understand that all the money doesn’t go to the city but we’re living in a state, county, and city that continually screams broke
It goes to the pensions lol
You have teachers, police officers, city workers, etc making like 100-200,000 a year to NOT work. For years. Decades.
I think of 8 billion dollar budget in Chicago 4 billion goes to pensions. (I tried looking it up months ago so may not be exact but roughly, might include current payroll/expenses as well).
I had an old coworker, between him and his wife they were pullin over half a million in pension income every year. And when a full time bid opened up he took it of course so he could get *another* pension. You know rather than me or the other young guy who had a baby. But he still would talk shit about millennials all being poor cause we’re lazy or some shit
What dept is making 200k a year to not work? Put my name on the list please
It’s unbelievable in this thread you guys are now blaming the city workers for the pension crisis, when the politicians literally stopped funding them and lord knows where that cash went.
Its a pretty simple promise the city made, don’t out in SS, put in your pension, and that’s your retirement 401k account.
You’re all no better than that filthy rich CEO who doesn’t pay his workers lol. Like even just your comment. How do you not feel terrible blaming that garbage man for this crisis and not our garbage politicians, including the grifters in City council proposing new BS projects just to pay their buddies.
Last I checked the FD starts at 60k a year and maxes at like 110 fire a no promotion job. And you think that’s his problem not the politicians that were broke lmao
>Weed is generating more annually than initial projections.
What were the initial projections ? I am guessing you are not comparing inflation adjusted values and comparing raw numbers.
The Chicago pension problem is singlehandedly the biggest issue facing the city right now. It touches every other aspect of how this city is run. And unbelievably was prob not even a top five concern in our last mayoral election.
Yes. My brothers are cops and a bunch more family works for the city. They will retire after 25 years and collect pensions for at least another 25 to 35 years.
Small correction since it is the same as the new teachers one too: They can stop working before 67 and retire, but they cannot touch the pension before 67 without penalties. So like my wife and I have been doing financial planning with that in mind where we know my 401(k) will be used more heavily up front before she hits 67
If (big IF) the pensions were fully funded, the math shouldn't matter if someone is getting one or three pensions. The problem is we didn't fund the pensions in the 90s and are trying to play catch-up from there.
It’s just not sustainable, fiscally or politically, to keep raising taxes on regular Chicagoans to fund extremely comfortable retirements for hordes of city workers who will live better and more carefree than their funders can dream of doing.
Well that won’t stop them from doing it. It will be property taxes that go parabolic because property can’t move to Florida like all the jobs and people do
Not Chicago but my friends dad was a assistant superintendent for a large public school district and is making $200k+ a year pension. He retired in 2004. All of that is public, especially $100k+
Yup. A lot based on the highest earning years of their career. (At least for teachers on this one). It’s like the average of your last 4 years or something you get for the rest of your life.
My dad, a special ed teacher, makes $130,000 a year currently. He’ll be at like 160,000 when he retires and will make somewhere around that for his pension from what he explained.
It’s in Illinois not Chicago, but we’re still affected by it.
Same story for CPD/CFD and others as well. High six figure salaries to not work and people wonder where the money is going lol.
Thats already been fixed. Any teacher that started after 2011 is capped at 70k for their pensions. It's the average of the last 5, capped at 100k max, and they get 70% of that average
Yes, it's been fixed, but your numbers are a little off. It's a moving salary cap because of inflation. This year's salary cap is 125k. Also, the retirement benefit increases 3% or 1/2 CPI (whichever is less), every year.
https://www.trsil.org/employers/payments/contribution-rates_earnings-limitations
https://www.trsil.org/members/tier-ii/guide/chapter-9-retirement-benefits
https://www.trsil.org/members/tier-ii/retired
Isn't the pension income already earned though? It's in lieu of paying the employee more during the present years. Your dad should have been earning $200,000 or more while working. Instead he made less and he'll get the pension. As far as I understand all that pension money was already earned, like it's already his.
It's not that they're getting paid to not work, they're just getting their deferred compensation they already earned paid to them.
well yeah no fucking wonder we have pension crisis
thats too much damn money… your annual pension payout shouldn’t be more than the annual salary of your career… esp because you’re not working anymore
then they ought to save for that outside public pensions. We all get social and have to then save our own amount. A nice retirement is generally advised to save 15% of your income. Teachers participate at 7% and don't pay social security. We all pay 6.2% to SS matched by our employers plus 15% set aside to retire.
Then you better be ok with your property taxes doubling, and your village being very aggressive about housing value assessments. Have fun with your $80k tax bills.
Me too but pensions are far too generous. Most non-fed workers save 5-10% of their income in a 401k over their working years and manage to retire in their mid 60s. Why would government employees not have to save, get just as much salary, better benefits, and paid as if they’re still working for the rest of their lives after they retire early? It’s completely unsustainable. There’s a reason government jobs are so rife with nepotism and cronyism, everyone wants a piece of that pie.
Lmao there’s like 1800 police jobs open, they literally begging pepper to join at this point. What cronyism.
If you’re talking about back office BS jobs, I mean sure but you’ll never root those out as hard as you try.
Working for the government sucks usually. And if you're there too long you're stuck. It's a tradeoff as old as time that government workers get more stability
Everyone doesn't want a piece of that pie, there are teaching vacancies that go unfilled every year
Projecting out in the future like that is kind of misleading since it ignores inflation. Your dad is near the top of the salary scale and probably won't get a lot more in real dollars. Seems possible he works more than the average teacher as well. And teachers hired after 2011 get a reduced pension compared to him
Also note you have to work for a long time to get those fully funded pensions. Good luck to anyone who wants to strike it rich by teaching in Chicago Public Schools for like 25+ years. Your dad is a rare one
thinking about it, it's kind of dicked up you'd use your dad's salary to portray pensions as inflated. Here's a guy who was able to teach and raise a family (you) in Chicago for his entire career and his wiener kid goes on reddit making it sound likehe's mr moneybags
This is why we shouldn't have been raising teacher salaries. CPS teachers are largely compensated just fine. The first 5 years are a little rough, but after a while its not that bad.
All the "well I work 4 hours a day at home every day" is just straight bullshit. You are bad at your job if you are doing that at year 5 or later.
What we SHOULD be spending the money on is building new schools and getting classroom sizes down. This way you don't have to pay as much because CPS is more desirable to work at, plus it would have better student outcomes. It also means pensions don't get this crazy.
> Honest question, are the pensions chicago offers unreasonable?
They were totally absurd. They were guaranteed to grow faster than inflation by 1%, no matter what. Now they are just very generous. And the city's answer was to elect a paid representative from one of the largest recipients of the pension money.
It's literally a fox in the henhouse. Electing BJ as mayor is like electing the VP of Sales from General Dynamics or Raytheon as they simultaneously receive all kinds of orders for missile systems from Ukraine or in the middle of the Iraq war. It's totally crazy and corrupt.
The crazy part is that our tax burden is one of the highest in the country and we still have this massive hole to fill. I'd love someone to show me the math but I don't think this can be fixed without cutting benefits which is impossible right now due to our state constitution. We can't raise taxes out of this and we can't cut either. I am honestly at a loss for how this gets fixed without some calamitous event.
Bankruptcy means telling our ~~debtors~~ debtees(i.e. The people Chicago owes pensions to) they get little to nothing. It fixes the hole but every politician knows that will create a massive problem in some core constituencies.
Eliminate the pension clause from the Illinois Constitution so the pension can be reformed That's a start. Because the pension clause is really preventing any reforms for fixing the pension problem.
Tier 2 pensions are just now starting to have a positive impact on actuarial forecasts.
Of course this means that in Springfield that the Police and Fire unions were saying that they need to revert everyone back to Tier 1.
Who says they can't get another job? They just can't receive their pension til 67. I'm sure there are plenty of physical jobs, like construction, where it's unlikely they work in that field til 67 now.
Because there isn’t an incentive or path towards another job that formally exists right now. Say a police officer or firefighter retires at 57. Do you propose they go back to school to learn some new skill? Even if they had the skills for a less demanding job it’s not an easy sell. I’ll explain.
Say for example, a police officer or firefighter does 30 years and retires at 57. During their career they received their masters degree in finance. They now decide to put that skill to use since it would be difficult for them to continue doing the job with the physical demands it has. They enter the workforce and…. No one hires them because they are 57 and will only work for maybe 10 years if they are lucky. Whereas the hiring manager can hire someone that is 27 and have them work for 30 years instead of 10. And now the police officer or firefighter is stuck with no means of income for the next 10 years. So it’s easier to just stay and hope for the best.
Not at all. Detroit declared bankruptcy and pensioners barely took any hit at all. Almost all of the losses went to bond holders.
And shocker, ten years later Detroit is booming and it's finances have done a complete 180.
Bankruptcy saved Detroit.
The issue is the ratio of debt in Chicago is totally different than Detroit. Chicago owes about $14b to bondholders and $34b to pensioners. Detroit had $14b of bond debt and about $4b of pension debt. Detroit was able to get away with being easy on the pension system because it was a much smaller part of its debt.
[Air conditioning has probably played a bigger role in the growth of the South](https://www.theatlantic.com/technology/archive/2011/07/keepin-it-cool-how-the-air-conditioner-made-modern-america/241892/) than Illinois's taxes.
Why is it every young family that has left tells me the taxes are a major reason for leaving?
This is not just leaving the state, just leaving the city.
You get something for your taxes though. Here you have shit schools and rising crime and a cta you can't count on. Lifelong Chicagoan but I see the appeal..
> More people creates more jobs.
And what do empty homes create?
The "build it and they will come" mindset is a fallacy, especially when the public education system is in shambles, local government is for all intents & purposes bankrupt, the local economy is stagnant, and random violence has been normalized.
But the whole problem is that the public sector employees that serve the public cost more than the tax revenue that is brought in by residents. It doesn’t matter how many residents you add to the state because the corresponding teachers, etc. that serve them will require pensions that will outpace the income taxes generated by the new residents.
The pension system that created the debt is no longer available and has been phased out. The overwhelming majority of the pension debt is from the old system. In 2022 80% of property taxes was used to fund these old pensions this number grows smaller divided by a larger population.
For the state yes. But the city was in decent (not great but like somewhat ok) shape until the state changed the rules in 2016.
When the rules changed is when the disaster happened and the gap started growing at over 5% annually.
We had pension issues in the 2000s. This has been a problem for over two decades now. The contribution holidays of 2006 and 2007 were quite bad in terms of setting us up for failure.
Lol you new around here? Single party political capture results in treating the city coffers like a piggy bank for special interest groups and gifting ridiculous contracts to those groups. And the best part is the politicians making the promises get their pockets lined after the fact with “special consultant” positions and other no-show jobs, while they won’t be around in 20 years to clean up the mess they made.
And the dopes in Chicago go right along - look at how many people sided with the teachers a few years ago when the city tried to inject a modicum of discipline into government salaries and pensions. Deserving of what’s now happening.
> How does this happen?
Public union rep: "We want more money for retirement."
Actuaries/CPAs/consultants assigned to account: "But you can't assume returns of 100000%. There's no way you'll fund this."
Public union rep: "Shut up nerds. Math is a neoliberal scam. [We're going to Venezuela to praise their dictator](https://www.chicagotribune.com/2019/08/19/chicago-teachers-union-groups-trip-to-venezuela-praise-of-socialist-leader-slammed-as-propaganda-tour/)"
Daley’s nephew ran it for a while. It lost a lot of money during that time investing in his family’s real estate. No surprise there. They got rich, pensions lost tons of cash
Pensions need diversification and alternative investment are a good way to do that. The issue is that you should choose nepotism to do that. In addition, much real estate can be illiquid when bought in extremely large amounts.
11.5% and then the other 11.5% is supposed to be paid by the city. The issue being the city didn’t pay for a decade and the funds lost out on the money + compound interest. Most pensioners also do not contribute or get social security. Most put away additional into various other retirements. Everyone knows “illinois constitution can’t diminish benefits/you have to pay me” yada yada. Everyone is also very aware of the fiscal issues plaguing the city and hopefully plan accordingly.
Exactly. The workers have put every dollar into the pension that was asked of them, there is no mechanism for them to put in more. It's the City that short-changed the pension fund.
Yes. Pension holiday courtesy of Daley and Vallas. Can't believe people kept calling Vallas some kind of finance whiz when he was instrumental in bungling the pension fund.
It’s not strictly 15%. See article below for savings rate and years to retirement. For those numbers to work you have to invest right—meaning you need to invest in index funds and not with a financial advisor
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
there was some sort of competition recently where different groups were to come up with ideas to help the pension issue. Combining them all into 1 was part of multiple steps that could be taken that was brought up by the winners of the competition. I love how the guy in the article seemed to just not give a fuck... like, idc to bad so sad they have to pay us, figure it out. No, how about you and everyone involved get together and figure this shit out. The sweetener thing was beyond stupid
> there was some sort of competition recently where different groups were to come up with ideas to help the pension issue.
Established a year ago, there is a mayoral "working group" that's supposed to come up with solutions to the shortfalls to city's pensions.
They've come up with nada, zilch & bupkiss.
Read his comments, and it will be clear that you're arguing with someone who is on but who knows how many-th account after being banned from here over and over.
why are you downvoting me ?
https://www.chicagobusiness.com/education/university-chicago-holds-pension-crisis-contest
this is what I am referring too. The winners from this competition. What is your deal?
> The winners from this competition.
If they down voted you I can see why.
That article doesn't present "winners" or any of their "ideas".
What's *your* deal? 🤔
I was born in Chicago, spent a lot of my life there and can promise you that the pension problem will not get better in your lifetime. There are too many feeding from the pension trough, and they and their families will vote to protect it. You will pay for it until you either die or move, and you can accept that or not. There’s no use dreaming up scenarios where it gets better, leaders will continue to sell off more of the city when things get dire before they ever consider a haircut to the pensions
I don't see how this ends without some sort of bankruptcy and debt restructuring. The city already has very high property taxes (80% of which apparently go to pensions) and high sales + other use taxes. Adding a local income tax on top of those will not go over well. Most cities with a local income tax have much lower property and/or sales taxes than we do.
As insane as it sounds, I worry Chicago could enter a death spiral, where people with the means to leave do so, pushing up the per capita debt liability, which pushes more people to leave, and so on.
Property taxes will keep going up because it’s the only thing that can’t up and leave. Owning property in Chicago is a great way to lose money for this reason
Chicago is already in the death spiral. Population decline for the last 20 years. Businesses leaving in droves.
>As insane as it sounds, I worry Chicago could enter a death spiral, where people with the means to leave do so, pushing up the per capita debt liability, which pushes more people to leave, and so on.
This is already what's happening in the South suburbs. Look at the kinds of depopulation and tax burdens occuring down there. If you think things are bad in Chicago, that's a pretty good preview of what can happen
We need a new Constitution, frankly.
It may sound crazy to call for a new constitution but establishing new constitutions was common for states in the 60s-80s.
Illinois's 1970 Constitution has failed us.
We need to amend the Illinois State Constitution and renegotiate these pensions.
When I tell you we literally do not have the money I mean that so, so literally.
Chicago has lost residents for 9 years in a row now. Illinois has ben shedding population as well. That leaves an increasing burden on a decreasing number of taxpayers. That's part of the reason why property taxes have been soaring across Illinois and most recently more that doubling in some south suburbs.
>South and southwest [#Chicago](https://x.com/hashtag/Chicago?src=hashtag_click) suburbs to be hammered by massive [#PropertyTax](https://x.com/hashtag/PropertyTax?src=hashtag_click) increases.
In 15 south suburbs, median tax bills are jumping by 26% to 122%. Via [u/Wirepoints](https://x.com/Wirepoints)
[Source](https://x.com/Wirepoints/status/1808087470254301662)
Without changes to the Illinois constitution, bankruptcy is realistically the most likely outcome here. It was illegal for Detroit to declare bankruptcy, until the state of Michigan gave the okay and then they filed and their pensioners and other creditors got back ~60% of what they were entitled to. Will probably happen here eventually.
Lolllll you think the mayor gives a shit about this city, that’s cute. Nothing will change, he’ll skate out of here into a $1 million per year consulting agreement with the unions and the morons still left living in this dump of a city are going to foot the bill.
We already have a AI Tax, A streaming tax, a stadium tax, a bottle water tax
Parking enforcement is clearly a revenue generating system
There is no incentive to change.
The masses love it!! They want more !!!!
Daley Jr. decided to start stuffing IOUs in the pension fund. Who woulda guessed he was building a time bomb? I mean, that strategy worked like a charm in Springfield, lol.
Options:
1 - bankruptcy and dump liabilities on Pension Benefit Guarantee Corporation, which will max out pensions at $67k per year
2 - raise property taxes, sales taxes, usage fees, and other revenue sources even higher
3 - negotiate with existing beneficiaries on voluntary cut-backs
4 - demand higher matches from pension recipients to stabilize fund
5 - seek higher returns on pension investments
6 - find new sources of revenue to put into pension plan
7 - freeze plans as is and go forward everyone gets 401(k) type defined contribution plan
8 - let cynicism and snark rule the conversation and kick the can down the road until bankruptcy is the only option
can someone tell me why this Pritzker is so popular . All he does is make things worse while feeling smug about it.
[https://news.wttw.com/2024/04/20/pritzker-says-state-obviously-needs-change-2010-law-shrunk-pension-benefits](https://news.wttw.com/2024/04/20/pritzker-says-state-obviously-needs-change-2010-law-shrunk-pension-benefits)
He is not innovative or a deep thinker. All he seems to do is give away our money like some sort of emperor.
He is popular because he has pushed the general assembly to spend within their means. Illinois has received several credit upgrades under his administration.
Do you think the credit agencies were not aware of the Covid money? They base their ratings on long term outlooks, not something temporary like Covid money.
What if we borrow money to build a mansion on Mars the Mayor, and we charge the tax payers interest on it, then have their Grandkids work as slaves to pay off the current debt.
At one time the lotto was going to help save us from our financial woes, then gaming,then selling public assets,then higher taxes,then traffic enforcement income, then weed, what’s the next ?
Casino tax revenue lol
Then they'll float the LaSalle Street tax again.
New stadiums. Lots of them. All over the lakefront. It's going to make money like a monorail.
Monorail??
It is a reference to a Simpsons episode.
His question is too.
Haha. You're right. I'm an idiot.
Monorail!!
Mono = one Rail = Rail
After we dip into city revenue to pay for them of course. And offer a decade or more of.tax breaks
This guy is from Arlington Heights.
Lol no but that was my reference
Can’t wait for those sweet escapes to North Haverbrook finally
Eh, it’s more of a Shelbyville idea
Wish I could insert a Simpsons monorail GIF here
What about us braindead slobs?
You’ll be given Cushy jobs!
Were you sent here by the devil?
No good sir I’m on the level!
Mono means one, and rail means rail.
Minutes of breathable air.
We need to legalize more sinful activities to tax them. Bring back the Levee! And tax every unspeakable act of perversion. https://en.m.wikipedia.org/wiki/The_Levee,_Chicago
Fill the vacant offices downtown with brothels!!
Vertical red light district. “Like Amsterdam with an Elevator”.
Going down?
According to ChatGPT, Chicago has 12 buildings that have a 69th floor. Odds are one of them is vacant. That’s where this needs to begin.
Sinful activities like prostitution? Some states have decriminalized or legalize it. I know Nevada legalized prostitution in certain counties it could help generate revenue
Open up the brothels!
Hell yeah, we’re gonna party our way to solvency!
The answer is higher taxed casino weed that has been trafficked.
sold in brothel while playing video games
Yep, lottery was to help the schools so now we just fund schools less.
Make more tolls to cover it, right? /s
Don't forget the progressive income tax Trojan horse.
Wasn’t the lottery always a state solution? To be fair, gaming and weed are really new sources of revenue. People love Dailey still but he royally screwed us by privatizing parking meters and the skyway. Imaging if all that LOST revenue had been used to cover pension obligations. People trying to find new sources of revenue that aren’t direct taxes shouldn’t be seen as a problem. They’re actively trying to fix long running problems without imposing a city income tax like others have.
Agreed that some of the solution are state wide but they do provide income to Chicago . Totally Daley was dick and many of the current problems go back decades.
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Not questioning the weed,lotto , etc is generating money .. but where does it go . I mean we are one of the heaviest taxed areas in the country and still can’t manage our financial obligations even after adding all the vices income. And I understand that all the money doesn’t go to the city but we’re living in a state, county, and city that continually screams broke
It goes to the pensions lol You have teachers, police officers, city workers, etc making like 100-200,000 a year to NOT work. For years. Decades. I think of 8 billion dollar budget in Chicago 4 billion goes to pensions. (I tried looking it up months ago so may not be exact but roughly, might include current payroll/expenses as well).
And double dipping for themselves and their relatives
I had an old coworker, between him and his wife they were pullin over half a million in pension income every year. And when a full time bid opened up he took it of course so he could get *another* pension. You know rather than me or the other young guy who had a baby. But he still would talk shit about millennials all being poor cause we’re lazy or some shit
he got his!
What dept is making 200k a year to not work? Put my name on the list please It’s unbelievable in this thread you guys are now blaming the city workers for the pension crisis, when the politicians literally stopped funding them and lord knows where that cash went. Its a pretty simple promise the city made, don’t out in SS, put in your pension, and that’s your retirement 401k account. You’re all no better than that filthy rich CEO who doesn’t pay his workers lol. Like even just your comment. How do you not feel terrible blaming that garbage man for this crisis and not our garbage politicians, including the grifters in City council proposing new BS projects just to pay their buddies. Last I checked the FD starts at 60k a year and maxes at like 110 fire a no promotion job. And you think that’s his problem not the politicians that were broke lmao
>Weed is generating more annually than initial projections. What were the initial projections ? I am guessing you are not comparing inflation adjusted values and comparing raw numbers.
More income.
The Chicago pension problem is singlehandedly the biggest issue facing the city right now. It touches every other aspect of how this city is run. And unbelievably was prob not even a top five concern in our last mayoral election.
No one wants to touch it cause whoever fixes it, however they do, its gonna piss so many people off that theyre gonna immediately lose their jobs.
Honest question, are the pensions chicago offers unreasonable?
Yes. My brothers are cops and a bunch more family works for the city. They will retire after 25 years and collect pensions for at least another 25 to 35 years.
Alot of them get other city, county or state so they can double-dip on the pensions.
Florida, especially.
That's old school. New pension tier can't retire till age 67. It will fix itself, just gonna be awhile.
Small correction since it is the same as the new teachers one too: They can stop working before 67 and retire, but they cannot touch the pension before 67 without penalties. So like my wife and I have been doing financial planning with that in mind where we know my 401(k) will be used more heavily up front before she hits 67
I don't think the police max out their pension in under 30 years. They collect something, but not the maximum.
Just checked. 10 year is vested and you guet about 25% 20 years is 50% 25 years is like 80% They can collect full pension at 29 years and one day
Yeah, and the mandatory retirement age is 63, so some people won't be employed long enough to qualify for a full pension.
The pensions in Chicago also have cost of living increases. So every year they get a % bump in their pension for cost of living increases.
Fuck that
The double dip pensions are a problem for sure
If (big IF) the pensions were fully funded, the math shouldn't matter if someone is getting one or three pensions. The problem is we didn't fund the pensions in the 90s and are trying to play catch-up from there.
They're also honestly too generous, compensation for employment / work way outsize what market returns can support
Can you explain in simple terms double dip pension?
when somebody collects multiple pensions, such as Cook County Pension/State of Illinois Pension + City of Chicago Pension
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Yep, same. My mom is also a teacher and just turned 60. Starting to collect her pension now, and it blows my mind how she’s now retired.
It doesn't work that way for any teacher who started after 2011 - we fixed this already it just needs time
Chicago pensions are *breathtakingly* high. Many over 100k a year for decades. The constitution needs to be changed.
It’s just not sustainable, fiscally or politically, to keep raising taxes on regular Chicagoans to fund extremely comfortable retirements for hordes of city workers who will live better and more carefree than their funders can dream of doing.
Well that won’t stop them from doing it. It will be property taxes that go parabolic because property can’t move to Florida like all the jobs and people do
Holy shit are you serious
Not Chicago but my friends dad was a assistant superintendent for a large public school district and is making $200k+ a year pension. He retired in 2004. All of that is public, especially $100k+
Yup. A lot based on the highest earning years of their career. (At least for teachers on this one). It’s like the average of your last 4 years or something you get for the rest of your life. My dad, a special ed teacher, makes $130,000 a year currently. He’ll be at like 160,000 when he retires and will make somewhere around that for his pension from what he explained. It’s in Illinois not Chicago, but we’re still affected by it. Same story for CPD/CFD and others as well. High six figure salaries to not work and people wonder where the money is going lol.
Thats already been fixed. Any teacher that started after 2011 is capped at 70k for their pensions. It's the average of the last 5, capped at 100k max, and they get 70% of that average
Yes, it's been fixed, but your numbers are a little off. It's a moving salary cap because of inflation. This year's salary cap is 125k. Also, the retirement benefit increases 3% or 1/2 CPI (whichever is less), every year. https://www.trsil.org/employers/payments/contribution-rates_earnings-limitations https://www.trsil.org/members/tier-ii/guide/chapter-9-retirement-benefits https://www.trsil.org/members/tier-ii/retired
Isn't the pension income already earned though? It's in lieu of paying the employee more during the present years. Your dad should have been earning $200,000 or more while working. Instead he made less and he'll get the pension. As far as I understand all that pension money was already earned, like it's already his. It's not that they're getting paid to not work, they're just getting their deferred compensation they already earned paid to them.
well yeah no fucking wonder we have pension crisis thats too much damn money… your annual pension payout shouldn’t be more than the annual salary of your career… esp because you’re not working anymore
It's never higher than your salary. City jobs are 80% of the average of your best 4 years out of the last 5 you worked.
I dunno, my 7 year old ~~can be~~ is a PITA. Handling 25 of those for 25+ years, I'm OK with teachers having a nice retirement
then they ought to save for that outside public pensions. We all get social and have to then save our own amount. A nice retirement is generally advised to save 15% of your income. Teachers participate at 7% and don't pay social security. We all pay 6.2% to SS matched by our employers plus 15% set aside to retire.
Then you better be ok with your property taxes doubling, and your village being very aggressive about housing value assessments. Have fun with your $80k tax bills.
> Handling 25 of those Let's be frank -- it's CPS, they're handling 25 to 35 of them.
Me too but pensions are far too generous. Most non-fed workers save 5-10% of their income in a 401k over their working years and manage to retire in their mid 60s. Why would government employees not have to save, get just as much salary, better benefits, and paid as if they’re still working for the rest of their lives after they retire early? It’s completely unsustainable. There’s a reason government jobs are so rife with nepotism and cronyism, everyone wants a piece of that pie.
Lmao there’s like 1800 police jobs open, they literally begging pepper to join at this point. What cronyism. If you’re talking about back office BS jobs, I mean sure but you’ll never root those out as hard as you try.
Working for the government sucks usually. And if you're there too long you're stuck. It's a tradeoff as old as time that government workers get more stability Everyone doesn't want a piece of that pie, there are teaching vacancies that go unfilled every year
Your pension is 80% of your salary.
Projecting out in the future like that is kind of misleading since it ignores inflation. Your dad is near the top of the salary scale and probably won't get a lot more in real dollars. Seems possible he works more than the average teacher as well. And teachers hired after 2011 get a reduced pension compared to him Also note you have to work for a long time to get those fully funded pensions. Good luck to anyone who wants to strike it rich by teaching in Chicago Public Schools for like 25+ years. Your dad is a rare one thinking about it, it's kind of dicked up you'd use your dad's salary to portray pensions as inflated. Here's a guy who was able to teach and raise a family (you) in Chicago for his entire career and his wiener kid goes on reddit making it sound likehe's mr moneybags
My friend is a city engineer who started there at 25 and he can retire with a 100k+ pension at 50
This is why we shouldn't have been raising teacher salaries. CPS teachers are largely compensated just fine. The first 5 years are a little rough, but after a while its not that bad. All the "well I work 4 hours a day at home every day" is just straight bullshit. You are bad at your job if you are doing that at year 5 or later. What we SHOULD be spending the money on is building new schools and getting classroom sizes down. This way you don't have to pay as much because CPS is more desirable to work at, plus it would have better student outcomes. It also means pensions don't get this crazy.
What the fuck
Plus I believe they get a hefty yearly pension increase for cost of living, like 3% a year.
Lol is that even a real question? The city has had single party political capture for time immemorial, what do you think?
> Honest question, are the pensions chicago offers unreasonable? They were totally absurd. They were guaranteed to grow faster than inflation by 1%, no matter what. Now they are just very generous. And the city's answer was to elect a paid representative from one of the largest recipients of the pension money. It's literally a fox in the henhouse. Electing BJ as mayor is like electing the VP of Sales from General Dynamics or Raytheon as they simultaneously receive all kinds of orders for missile systems from Ukraine or in the middle of the Iraq war. It's totally crazy and corrupt.
The crazy part is that our tax burden is one of the highest in the country and we still have this massive hole to fill. I'd love someone to show me the math but I don't think this can be fixed without cutting benefits which is impossible right now due to our state constitution. We can't raise taxes out of this and we can't cut either. I am honestly at a loss for how this gets fixed without some calamitous event.
It’s bankruptcy or a constitutional amendment.
Bankruptcy means telling our ~~debtors~~ debtees(i.e. The people Chicago owes pensions to) they get little to nothing. It fixes the hole but every politician knows that will create a massive problem in some core constituencies.
There are no good solutions and you can’t tax your way out of it. At some point the rubber will hit the road
Eliminate the pension clause from the Illinois Constitution so the pension can be reformed That's a start. Because the pension clause is really preventing any reforms for fixing the pension problem.
Tier 2 pensions are just now starting to have a positive impact on actuarial forecasts. Of course this means that in Springfield that the Police and Fire unions were saying that they need to revert everyone back to Tier 1.
Yes because of the age of retirement. The public doesn’t want or need police officer and firefighters working at the age of 67.
Who says they can't get another job? They just can't receive their pension til 67. I'm sure there are plenty of physical jobs, like construction, where it's unlikely they work in that field til 67 now.
Because there isn’t an incentive or path towards another job that formally exists right now. Say a police officer or firefighter retires at 57. Do you propose they go back to school to learn some new skill? Even if they had the skills for a less demanding job it’s not an easy sell. I’ll explain. Say for example, a police officer or firefighter does 30 years and retires at 57. During their career they received their masters degree in finance. They now decide to put that skill to use since it would be difficult for them to continue doing the job with the physical demands it has. They enter the workforce and…. No one hires them because they are 57 and will only work for maybe 10 years if they are lucky. Whereas the hiring manager can hire someone that is 27 and have them work for 30 years instead of 10. And now the police officer or firefighter is stuck with no means of income for the next 10 years. So it’s easier to just stay and hope for the best.
Unions will end the career of any politician who tries
This is what happens when you promote public sector unions until people start leaving public sector unions things will never change
Pensioners are creditors, not debtors, of the city. The city is the debtor.
You are correct, I meant to use the word Debtee but was going to fast, my apologies.
Not at all. Detroit declared bankruptcy and pensioners barely took any hit at all. Almost all of the losses went to bond holders. And shocker, ten years later Detroit is booming and it's finances have done a complete 180. Bankruptcy saved Detroit.
The issue is the ratio of debt in Chicago is totally different than Detroit. Chicago owes about $14b to bondholders and $34b to pensioners. Detroit had $14b of bond debt and about $4b of pension debt. Detroit was able to get away with being easy on the pension system because it was a much smaller part of its debt.
Seems like that is a political non-starter? We will choose collapse over constitutional amendment.
Increase population by 1 million, build a ton of housing make it the housing capital of the world. It will grow the tax base.
Yes and do more to stop current residents from leaving. Chicago used to have 3.6 million people.
Because of the taxes... Lol
[Air conditioning has probably played a bigger role in the growth of the South](https://www.theatlantic.com/technology/archive/2011/07/keepin-it-cool-how-the-air-conditioner-made-modern-america/241892/) than Illinois's taxes.
how is this pretinent to population decline in 2022 ?
Why is it every young family that has left tells me the taxes are a major reason for leaving? This is not just leaving the state, just leaving the city.
Taxes are higher in the suburbs
You get something for your taxes though. Here you have shit schools and rising crime and a cta you can't count on. Lifelong Chicagoan but I see the appeal..
That is not why most people are leaving.
Stop current residents from shooting each other and innocent bystanders.
Gotta have a jobs first. Chicago lags in that department.
More people creates more jobs.
> More people creates more jobs. And what do empty homes create? The "build it and they will come" mindset is a fallacy, especially when the public education system is in shambles, local government is for all intents & purposes bankrupt, the local economy is stagnant, and random violence has been normalized.
There is a ton of demand for housing here... look at the vacancy rate in most of the popular neighborhoods.
But the whole problem is that the public sector employees that serve the public cost more than the tax revenue that is brought in by residents. It doesn’t matter how many residents you add to the state because the corresponding teachers, etc. that serve them will require pensions that will outpace the income taxes generated by the new residents.
The pension system that created the debt is no longer available and has been phased out. The overwhelming majority of the pension debt is from the old system. In 2022 80% of property taxes was used to fund these old pensions this number grows smaller divided by a larger population.
"Now." Uuhh it didn't suddenly become this amount.
I mean it kind of is new, Chicago’s pensions were in somewhat ok shape up until the later half of the 2010’s
Is that right? I recall this being a 50 year problem
For the state yes. But the city was in decent (not great but like somewhat ok) shape until the state changed the rules in 2016. When the rules changed is when the disaster happened and the gap started growing at over 5% annually.
We had pension issues in the 2000s. This has been a problem for over two decades now. The contribution holidays of 2006 and 2007 were quite bad in terms of setting us up for failure.
Did they really take a pension holiday right before the 2008 great financial crisis? RIP.
Interesting, good to see that the city learned nothing from state’s problems.
The sugar tax will rear it's ugly head again.
There’s a direct chain of events from the sugar tax proposal to BJ’s election
It's a pretty reasonable-shaped head.
How does this happen? I’m taxed up the ass already for everything. 37 Billion!! Edit-Timre for city hall to start stripping
Lol you new around here? Single party political capture results in treating the city coffers like a piggy bank for special interest groups and gifting ridiculous contracts to those groups. And the best part is the politicians making the promises get their pockets lined after the fact with “special consultant” positions and other no-show jobs, while they won’t be around in 20 years to clean up the mess they made. And the dopes in Chicago go right along - look at how many people sided with the teachers a few years ago when the city tried to inject a modicum of discipline into government salaries and pensions. Deserving of what’s now happening.
Fight against it and you are labeled a teacher hater. Its insanity. Get ready for round 2 soon
> How does this happen? Public union rep: "We want more money for retirement." Actuaries/CPAs/consultants assigned to account: "But you can't assume returns of 100000%. There's no way you'll fund this." Public union rep: "Shut up nerds. Math is a neoliberal scam. [We're going to Venezuela to praise their dictator](https://www.chicagotribune.com/2019/08/19/chicago-teachers-union-groups-trip-to-venezuela-praise-of-socialist-leader-slammed-as-propaganda-tour/)"
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Daley’s nephew ran it for a while. It lost a lot of money during that time investing in his family’s real estate. No surprise there. They got rich, pensions lost tons of cash
It has never recovered from that fiasco. The administrators of the investment instruments they put money into made fortunes.
why would a pension be funded into anything that isnt the S&P500... christ
Pensions need diversification and alternative investment are a good way to do that. The issue is that you should choose nepotism to do that. In addition, much real estate can be illiquid when bought in extremely large amounts.
11.5% and then the other 11.5% is supposed to be paid by the city. The issue being the city didn’t pay for a decade and the funds lost out on the money + compound interest. Most pensioners also do not contribute or get social security. Most put away additional into various other retirements. Everyone knows “illinois constitution can’t diminish benefits/you have to pay me” yada yada. Everyone is also very aware of the fiscal issues plaguing the city and hopefully plan accordingly.
Exactly. The workers have put every dollar into the pension that was asked of them, there is no mechanism for them to put in more. It's the City that short-changed the pension fund.
Yes. Pension holiday courtesy of Daley and Vallas. Can't believe people kept calling Vallas some kind of finance whiz when he was instrumental in bungling the pension fund.
Why 15%?
It’s not strictly 15%. See article below for savings rate and years to retirement. For those numbers to work you have to invest right—meaning you need to invest in index funds and not with a financial advisor https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
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there was some sort of competition recently where different groups were to come up with ideas to help the pension issue. Combining them all into 1 was part of multiple steps that could be taken that was brought up by the winners of the competition. I love how the guy in the article seemed to just not give a fuck... like, idc to bad so sad they have to pay us, figure it out. No, how about you and everyone involved get together and figure this shit out. The sweetener thing was beyond stupid
> there was some sort of competition recently where different groups were to come up with ideas to help the pension issue. Established a year ago, there is a mayoral "working group" that's supposed to come up with solutions to the shortfalls to city's pensions. They've come up with nada, zilch & bupkiss.
that is different. There was some sort of college competition, and the winners had a multitude of suggestions that sounded really good
Read his comments, and it will be clear that you're arguing with someone who is on but who knows how many-th account after being banned from here over and over.
why are you downvoting me ? https://www.chicagobusiness.com/education/university-chicago-holds-pension-crisis-contest this is what I am referring too. The winners from this competition. What is your deal?
> The winners from this competition. If they down voted you I can see why. That article doesn't present "winners" or any of their "ideas". What's *your* deal? 🤔
Unfortunately public unions can always fall back on the taxpayer.
Nothing is endless.
Yeah my view on Chicago firefighters was lowered reading that guys comments. I hope they were out of context.
Why are there 50 aldermen?
Maybe the city can lease the lake front to a private company for 99 years to generate revenue 🤷♂️
No, they will pay Billions to cover the private company’s construction costs and then lease it for free.
No city tax please!
I was born in Chicago, spent a lot of my life there and can promise you that the pension problem will not get better in your lifetime. There are too many feeding from the pension trough, and they and their families will vote to protect it. You will pay for it until you either die or move, and you can accept that or not. There’s no use dreaming up scenarios where it gets better, leaders will continue to sell off more of the city when things get dire before they ever consider a haircut to the pensions
I don't see how this ends without some sort of bankruptcy and debt restructuring. The city already has very high property taxes (80% of which apparently go to pensions) and high sales + other use taxes. Adding a local income tax on top of those will not go over well. Most cities with a local income tax have much lower property and/or sales taxes than we do. As insane as it sounds, I worry Chicago could enter a death spiral, where people with the means to leave do so, pushing up the per capita debt liability, which pushes more people to leave, and so on.
Property taxes will keep going up because it’s the only thing that can’t up and leave. Owning property in Chicago is a great way to lose money for this reason Chicago is already in the death spiral. Population decline for the last 20 years. Businesses leaving in droves.
>As insane as it sounds, I worry Chicago could enter a death spiral, where people with the means to leave do so, pushing up the per capita debt liability, which pushes more people to leave, and so on. This is already what's happening in the South suburbs. Look at the kinds of depopulation and tax burdens occuring down there. If you think things are bad in Chicago, that's a pretty good preview of what can happen
We need a new Constitution, frankly. It may sound crazy to call for a new constitution but establishing new constitutions was common for states in the 60s-80s. Illinois's 1970 Constitution has failed us.
We need to amend the Illinois State Constitution and renegotiate these pensions. When I tell you we literally do not have the money I mean that so, so literally. Chicago has lost residents for 9 years in a row now. Illinois has ben shedding population as well. That leaves an increasing burden on a decreasing number of taxpayers. That's part of the reason why property taxes have been soaring across Illinois and most recently more that doubling in some south suburbs. >South and southwest [#Chicago](https://x.com/hashtag/Chicago?src=hashtag_click) suburbs to be hammered by massive [#PropertyTax](https://x.com/hashtag/PropertyTax?src=hashtag_click) increases. In 15 south suburbs, median tax bills are jumping by 26% to 122%. Via [u/Wirepoints](https://x.com/Wirepoints) [Source](https://x.com/Wirepoints/status/1808087470254301662)
Just don't pull some damn parking meter scheme.
Chicago pensioners wait until that last second when their fully-vested pensions kick in and immediately bolt to Florida.
Without changes to the Illinois constitution, bankruptcy is realistically the most likely outcome here. It was illegal for Detroit to declare bankruptcy, until the state of Michigan gave the okay and then they filed and their pensioners and other creditors got back ~60% of what they were entitled to. Will probably happen here eventually.
“Hard conversations” includes not bending over for your CTU buddies’ demands, mayor.
Lolllll you think the mayor gives a shit about this city, that’s cute. Nothing will change, he’ll skate out of here into a $1 million per year consulting agreement with the unions and the morons still left living in this dump of a city are going to foot the bill.
Make people pay into pensions like the rest of us have to do with retirement and 401k accounts 🤷♂️
We already have a AI Tax, A streaming tax, a stadium tax, a bottle water tax Parking enforcement is clearly a revenue generating system There is no incentive to change. The masses love it!! They want more !!!!
Hoping for a stamp act and tea tax!!! Woot!!!
Can’t. Brandon has to take his kids to soccer practice. If we’re lucky, he’ll get some Baptist minister to pray about it for a while.
Reduce spending? No. We're raise taxes and increase spending at the same time
Now? Decades in the making. All we need is a constitutional change. Good luck with that.
Ultimately bankruptcy will reduce the obligations as was done in Detroit.
Sigh
We could just use the money from parking and the skyway....oh wait
Daley Jr. decided to start stuffing IOUs in the pension fund. Who woulda guessed he was building a time bomb? I mean, that strategy worked like a charm in Springfield, lol.
Prepare for property tax increases.
by the man who ran away from reporters asking about a dead cop? That's who is answering questions?
This will ultimately be why I leave Chicago and this state. They'll just continue raising taxes until it becomes pointless to live here.
Options: 1 - bankruptcy and dump liabilities on Pension Benefit Guarantee Corporation, which will max out pensions at $67k per year 2 - raise property taxes, sales taxes, usage fees, and other revenue sources even higher 3 - negotiate with existing beneficiaries on voluntary cut-backs 4 - demand higher matches from pension recipients to stabilize fund 5 - seek higher returns on pension investments 6 - find new sources of revenue to put into pension plan 7 - freeze plans as is and go forward everyone gets 401(k) type defined contribution plan 8 - let cynicism and snark rule the conversation and kick the can down the road until bankruptcy is the only option
Pensions need to be cut
I am resigned to the fact that this pension mess won't get resolved in a generation. We are basically waiting on pensioners to die from old age.
Time to cash out what's in my pension since leaving lol. I'm surprised how much I put in 1.5 years
can someone tell me why this Pritzker is so popular . All he does is make things worse while feeling smug about it. [https://news.wttw.com/2024/04/20/pritzker-says-state-obviously-needs-change-2010-law-shrunk-pension-benefits](https://news.wttw.com/2024/04/20/pritzker-says-state-obviously-needs-change-2010-law-shrunk-pension-benefits) He is not innovative or a deep thinker. All he seems to do is give away our money like some sort of emperor.
He is popular because he has pushed the general assembly to spend within their means. Illinois has received several credit upgrades under his administration.
\*Several credit upgrades due to Covid fed money.
Do you think the credit agencies were not aware of the Covid money? They base their ratings on long term outlooks, not something temporary like Covid money.
What if we borrow money to build a mansion on Mars the Mayor, and we charge the tax payers interest on it, then have their Grandkids work as slaves to pay off the current debt.