Back on October 2nd the title of my post was, “People are not being reached; really, they’re not.” That can’t be said often enough. A perfect example of what people don’t know is the corrupt nature of the state employee pension problem.
Many Illinoisans are aware of the issue generally because it gets a lot of superficial news coverage. I use the word ‘problem’ but a few other words also apply: scandal, scam, legalized theft.
If you think those last three descriptions are a bit too much — you should read through Bill Zettler’s archive here. Bill was one of the first writers to delve into the problem — and what he has been reporting on for much of the last decade is obscene. It’s widely known today that only a fraction of the money needed is in the bank to pay out what has been promised. Don’t think for a moment that’s because taxpayers haven’t done their part. In fact through their elected representatives at the school district level and the General Assembly — taxpayers have contributed more than what is fair, reasonable, and legally necesssary.
The “underfunding” is actually the result of overpromising. One way the ways the overpromising came about was because many teachers, for example, averaged five percent or more a year in pay increases. Another was in the infamous pension spiking — huge raises in the last few years before retirement to up substantially the pension level.
There are so many corrupt layers to this — here are just a few:
- It’s important to remember who negotiated many of those pie-in-the-sky contracts: elected officials were on one side, and union leaders were on the other side. Do you know what happens when elected officials want to win the votes of the union rank and file? That’s right — mathematics and the interest of taxpayers are ignored when the deals are made.
- What about all the money the workers paid in? It’s a poorly kept secret but in at least two-thirds of all school districts, for example, the employees’ portion of the pension contribution is covered by the district. That’s a nice perk if you can get it.
- There is plenty of money in the system to pay out modest pensions to all retirees, but they don’t want modest pensions. They want the kind of money that almost no one else in the private sector middle class receives.
- Left wing interest groups and Democratic Party politicians have plans for even more new tax increases in order to pay for this irresponsible system. When you factor in the number of businesses and people leaving the state the burden will be terrible for those who remain.
Old fashioned pension systems were structured so that money invested during an employee’s working life would accrue to the point where benefits could be paid out upon retirement. Today’s public employee pensions are more like life-time contracts in that even after someone retires much of their pension benefit is still paid out of new revenue.
There’s an additional problem to this. Unborn taxpayers are made to cover contractual benefits agreed to by compromised negotiators (see above) before those taxpayers were even conceived. Contracts can’t be made with those who are not yet born — so the idea that present taxpayers are responsible for decades-old agreements is another example of the corruption of the system.
There’s more, but I’ll refer you to Bill Zettler’s archive.
Let’s return to our original premise: not enough Illinoisans understand the depths of this corruption — but a Republican and conservative army exists that can help get the information out.
Only five percent of the population is in line to receive one of these overly-generous taxpayer funded pensions. It’s my guess that Republicans and conservatives should be able to rally enough of the other 95% to demand genuine reform and an end to this kind of legalized theft. Government shouldn’t have an elite high dollar pension system for its employees. Social Security is good enough for the rest of us and should be good enough for them too.
Up next: what too many Americans don’t know about health care.