Showing posts with label Pension Abuse. Show all posts
Showing posts with label Pension Abuse. Show all posts

Wednesday, May 23, 2018

Where is the Outrage?

SELF-STYLED REFORMER
Illinois government is so corrupt, and it's citizens are so numb, that nobody is questioning why this person is on a second government payroll. What exactly is she doing for the Cook County government on her days off, besides setting herself up for a second government pension? 

If she is so talented she should be working for private industry somewhere, on her days off. She shouldn't be on a second government payroll. This practice looks bad, is wrong, corrupt and is part of the cause of the governmental pension crisis. 

Personally, I would never have expected such tricks from such a reformer. It would probably be best if she just resigns from the General Assembly.


An Illinois lawmaker said Monday she was forced out of her gig with the Cook County Sheriff’s office, given no choice other than to resign from her part-time position after speaking publicly against powerful House Speaker Michael Madigan.
State Rep. Kelly Cassidy, a Democrat who represents portions of Chicago’s North Side, was the lead voice calling for an independent investigation after allegations of sexual harassment first surfaced within Madigan’s political staff. […]
Days after she publicly called for a review of harassment policies and past responses to complaints, Cassidy said she was told by Sheriff Tom Dart’s spokeswoman Cara Smith that Madigan’s chief of staff Tim Mapes had called “to confirm that I was still employed,” adding, “that call from Mapes felt like a warning, it was a little chilling.” […]
Last week, Cassidy said state Rep. Bob Rita “summoned” her over to discuss Dart’s bill and said, “I really just can’t get over the fact that you’re opposed to your boss’ bill.” […]
That conversation with Rita led Cassidy to speak to Smith once again. Cassidy said Smith told her that Rita had reached out to tell her, “when I worked for a politician, when I opposed him, I expect to be fired.”
“My blood ran cold at that,” Cassidy said. “It was very, very clear at that point, the combination of the call in February and this action by Rep. Rita, that this job was their point of leverage to use against me.” […]
Cassidy said she did not link Dart to the retaliation and chose to resign from her position. […]
“This is retribution, there is zero doubt in my mind,” she added. “This is about me having the gall to speak out.”

Tuesday, June 6, 2017

I suggest the alderman have one big gigantic bake sale. All proceeds going to fund the pensions.

Mayor Rahm Emanuel said Friday he would ask the Chicago City Council to sign off on a 28.2 percent increase in the monthly tax tacked onto phone bills to make the city’s 911 emergency system modern and self sufficient.
Earlier this week, a top mayoral aide told the Chicago Sun-Times that Emanuel would use the increase — from $3.90 a month to $5 for every cell phone and land line — to help shore up the Laborers pension fund “well into the next decade.”

Saturday, May 21, 2016

Pension? What Pension?

There will be no pension for you
Under the new accounting rules there will be no more analyzing this problem through rose colored glasses. The pension plans of both Chicago, Cook County and their sister agencies are in dire straights and is getting worse every day. 

Thanks to the defeat of the city’s retirement-fund overhaul by the Illinois Supreme Court and new accounting rules, Chicago’s so-called net pension liability to its Municipal Employees’ Annuity and Benefit Fund soared to $18.6 billion by the end of 2015 from $7.1 billion a year earlier, according to its annual report. The fund serves some 70,000 workers and retirees.
The new figure, a result of actuaries’ revised estimates for the value in today’s dollars of benefits due as long as decades from now, doesn’t change how much Chicago needs to contribute each year to make sure the promised checks arrive. But it highlights the long-term pressure on the city from shortchanging its retirement funds year after year -- decisions that are now adding hundreds of millions of dollars to its annual bills and have left it with a lower credit rating than any big U.S. city but once-bankrupt Detroit.
“The longer they wait to get this fixed, the more expensive it’s going to get for the city’s taxpayers,” Richard Ciccarone, the Chicago-based president of Merritt Research Services LLC, which analyzes municipal finances.
The estimate presented Thursday to the board of the municipal fund, one of Chicago’s four pensions, will add to what had been an unfunded liability estimated at $20 billion.
A key driver was the court ruling striking down Mayor Rahm Emanuel’s plan that cut benefits and boosted city and employee contributions. Without it in place, the fund is now set to run out of money within 10 years.
That triggered another change. New accounting rules, adopted to keep governments from using overly optimistic investment-return forecasts to mask the scale of their liabilities, require them to use more modest assumptions once pension plans go broke. As a result, the reported liabilities jump.
The Chicago fund is notable because very few governments have been affected by the change, according to Ciccarone. “The investment returns are not going to fix the problems themselves,” he said.
City officials from Emanuel to Chief Financial Officer Carole Brown have said the city is working on a solution to shore up the retirement system. Chicago has already passed a record property-tax increase that will bolster the police and fire funds.
Under the traditional way of estimating the municipal fund’s obligations, which is how annual contributions are set, the shortfall rose to $9.9 billion as of Dec. 31, based on market value of its assets, according to the actuaries report. That’s up from $7.1 billion a year earlier.
The pension is only 32 percent funded -- meaning it has 32 cents for every dollar it owes -- compared to 42 percent last year, according to the actuaries. And it has to sell 12 percent to 15 percent of its assets every year to pay out benefits.
City officials are having “very good discussions” with the unions about the issue, according to Emanuel, who has made clear that he disagrees with the court’s ruling to throw out his plan.
“We’re working through the issue to get to what I call a responsible way to fund their pensions within the confines, the straitjacket that the court has determined,” Emanuel told reporters at City Hall on Wednesday.
A proposal is pending in the state legislature to bolster funding for the benefit fund. The plan would ensure it’s 90 percent funded by the end of fiscal year 2055. Jim Mohler, executive director of the fund, told board members on Thursday that it’s a “fluid situation.”

Sunday, February 28, 2016

Some people would say this is criminal

Pension funds lost millions on deals with Daley nephew, Obama pal

WRITTEN BY TIM NOVAK POSTED: 02/27/2016, 11:30PM
Robert G. Vanecko, left, and Allison S. Davis, right. File photos

A real estate venture created by President Barack Obama’s onetime boss and a nephew of former Mayor Richard M. Daley squandered $68 million it was given to invest on behalf of pension plans for Chicago teachers, cops, city employees and transit workers, a Chicago Sun-Times investigation has found.

The five public pension funds haven’t made a dime on the investments they made nearly a decade ago with DV Urban Realty Partners, a company created by Obama’s ex-boss Allison S. Davis and Daley nephew Robert G. Vanecko, records show.

In fact, the financially troubled pension plans have lost most of the money they gave DV Urban, which used the money to invest in risky real estate deals, primarily in neglected neighborhoods.

It invested in eight real estate deals that, for the most part, had gone belly up by Dec. 31, 2015, when the investment deals with the Chicago pension plans expired.

Though the pension funds lost out, DV Urban and its affiliated companies got about $9 million of the pension money for management fees. And they were in line for more until pension officials, facing losses, got a court order in 2012 to remove Davis and Vanecko from managing the retirement investments.

Following the sale of two properties last year, the pension funds recovered $6 million of their original investments — but $293,716 of that

Monday, February 15, 2016

Chicago has been running a Ponzi scheme for some time.

"Illinois and Chicago pension beneficiaries are unlikely to see the full benefits they were promised. That is because they were given false promises."

An interesting topic that we’ve seen a lot of news about recently is the status of three different municipal issuers: The City of Chicago, Chicago Public Schools (CPS), and the State of Illinois. Despite their different names, each entity serves the same basic function, faces the same set of legal circumstances governed by state courts, and has a similar liability profile.
We have compiled a historical analysis of distressed state and local government issuers over the past four decades and have concluded that all have faced similar decision-making pitfalls in the course of their budgetary processes, year-in and year-out.
Our findings suggest that the present-day cases of Illinois/Chicago, Detroit, and Puerto Rico, as well as New York City in the 1970s, are all remarkably similar in that each chose to skip pension payments and issue debt in a “scoop and toss” fashion over the course of two or three decades as an alternative to

Wednesday, October 28, 2015

Tax Vote Today

Chicago's City Council will vote today on a proposed budget that includes a massive property hike and other fees to help close a shortfall and address its underfunded pension system!

Saturday, October 17, 2015

State pension checks are going to be late.


Now the proverbial chicken is coming home to roost for the State of Illinois.
Elizabeth Campbell and Tim Jones report for Bloomberg, Oct. 14, 2015, that Illinois will delay pension payments as a prolonged budget impasse causes a cash shortage. The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending.
Comptroller Leslie Geissler Munger said her office will postpone a $560 million retirement-fund payment next month and may be late in its December payment as well. But the pension systems will be paid in full by the end of the fiscal year in June. Munger said that the

Tuesday, September 22, 2015

We knew this was coming, don't act surprised.

Taxing their way out of this is not the way to go. These taxes will surely chase residents and businesses away. All that being said, city living may still be one of the best bargains around. 
Emanuel to propose $588M property tax hike, phased in over 4 years !
WRITTEN BY FRAN SPIELMAN POSTED: 09/21/2015, 02:46PM
Mayor Rahm Emanuel last week | Getty Images


Mayor Rahm Emanuel will lower the boom on Chicago taxpayers Tuesday — and the multiyear hit will be even harder than anticipated.

To eliminate the city’s structural deficit and confront a $30 billion pension crisis that has saddled Chicago with a junk bond rating, Emanuel will ask the City Council to raise property taxes by $588 million by 2018 for police and fire pensions and school construction and impose a first-ever monthly garbage collection fee of $9.50 per household.

The $588 million increase will cost the owner of a $250,000 home roughly $588 more a year. It will be phased in over a four-year period, under the 2016 budget that Emanuel will unveil to the City Council on Tuesday.

A $318 million increase for police and fire pensions would apply to the 2015 property tax levy payable in 2016, coupled with a $45 million increase for school construction, for a total increase of $363 million.

That will be followed by a $109 million property tax increase for police and fire pensions in the 2016 levy, a $53 million increase in 2017 and $63 million in 2018.

The $9.50-a-month garbage collection fee amounts to a back-door property tax increase that would add $114 to the costs heaped on 613,000 Chicago owners of single-family homes, two-, three- and four-flats that still get city pickups.

Senior citizens would pay half that amount, just as they do now on city stickers, in a break demanded by the City Council’s Black Caucus. The city is assuming that 40,000 seniors will get the garbage discount.

As expected, the new fee would be tacked on to water bills that arrive in mailboxes every other month. If homeowners refuse to pay the garbage fee, city crews would still pick up the trash to avoid exacerbating Chicago’s already serious rodent problem.

The mayor’s budget also includes a new tax on e-cigarettes, a 50-cents–a-ride surcharge on taxis and ride-hailing services, and a 15 percent increase in cab fares and authorization for Uber to make pickups at McCormick Place, O’Hare and Midway Airports in exchange for a $5 surcharge on every pickup and drop-off.

To raise an additional $13 million, Emanuel plans to “modernize” fees the city charges for building permits. The restructuring was proposed by the Chicago Federation of Labor.

The garbage fee has emerged as the biggest point of contention in Emanuel’s 2016 budget — even more so than the 72 percent property tax increase that will be the largest in modern Chicago history.

But the mayor’s budget team argues that suburbanites have been paying a separate and much higher fee for garbage collection for years and so has much of the city. It’s a matter of fairness, they contend.

Berwyn residents pay $25 a month for garbage collection. In the recycling haven of Seattle, the garbage fee is $100 a month.

“Only half the city receives garbage collection from the city. The other half of the city receives garbage collection and they pay for it from private vendors,” said a member of the mayor’s finance team, who asked to remain anonymous.

“Some aldermen have suggested that the entire amount should just simply go on the property tax levy. We’re looking for a way to have everybody participate . . . Putting the $9.50 fee on makes sure that we still have the resources we need, not only to collect garbage, but also to pay for police and pay for fire. If you were to put that full amount onto the levy, you then push that expense onto people who live in buildings that are already paying for garbage collection.”

In a news release distributed to reporters on the eve of the mayor’s budget address, Emanuel claimed to have authorized $170 million in additional “savings and reforms” before hitting a brick wall.

City Hall argued that it is “not possible” to meet the state mandated payment to shore up police and fire pensions without drastic cuts in the “most critical city services” like police, fire and sanitation that would render the city “unlivable” for residents and businesses alike.

“On so many fronts, Chicago has made great progress by challenging the status quo. But, as we continue to grow our economy, create jobs and attract families and business to Chicago, our fiscal challenges are blocking our path to ever greater success,” the mayor was quoted as saying.

“With this budget, we will build on our progress by charting a new course for Chicago’s future and ensure that we are securing the retirements of our police and firefighters in a way that does not hurt those who can least afford it.”

The scary part is that Emanuel isn’t through raising property taxes. He’s also proposed a $170 million to property tax increase for teacher pensions provided teachers accept the equivalent of a 7 percent pay cut and the state agrees to pick up “normal” pension costs.

And even with a 72 percent increase in the city’s property tax levy, Emanuel is making a rosy and risky assumption that, if he’s wrong, would make the financial hit absorbed by Chicago taxpayers significantly worse.

The mayor’s 2016 budget assumes that Gov. Bruce Rauner will sign legislation — approved by the Illinois House and Senate, but not yet on the governor’s desk — giving Chicago 15 more years to ramp up to 90 percent funding level for the police and fire pension funds.

Chicago taxpayers would still be on the hook for $619 million in payments to the two funds next year — more than double the current payment. But that’s still $220 million less than the city would have been forced to pay and an $843 million break over the next five years.

Although a Circuit Court judge has overturned Emanuel’s plan to save the Municipal Employees and Laborers pension funds, Emanuel is also counting on the state Supreme Court to reverse that decision.

Never mind that the high court has already overturned state pension reforms. Never mind that Cook County Court Judge Rita Novak cited the “crystal-clear direction” provided by the Illinois Supreme Court’s reading of the Illinois Constitution: Membership in a government employee pension system “shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

If, as expected, the Supreme Court overturns those reforms, the city’s budget picture would get $130 million better in the short-run and hundreds of millions of dollars worse over time.

But a city finance source, who asked to remain anonymous, argued that, if the mayor’s plan is overturned, “We don’t actually have to pay . . . We don’t have that obligation.”

The mayor still hopes to soften the blow of the massive property tax increase by convincing the General Assembly to raise the homeowner exemption and hold harmless owner-occupied homes worth less than $250,000.

House Speaker Michael Madigan (D-Chicago) has scheduled a hearing on that tax break for later this week over Rauner’s objections.

Convinced that Emanuel’s plan is going nowhere in Springfield, the City Council’s Progressive Caucus on Monday proposed a “back-stop” plan to soften the blow of a $588 million property tax increase for low-income homeowners.

The fallback is similar to the widely-ignored, 2010 plan offered by then-Mayor Richard M. Daley. Daley set aside $35 million for rebate checks, but distributed only $2.1 million because most homeowners didn’t bother to apply.

This time, rebate checks of up to $2,000 would be open to homeowners, no matter how much their homes are worth, provided the owners have an adjusted gross income of less than 400 percent of the federal poverty level.

That’s roughly $47,000 a year for a single homeowner, $63,000 for a couple and $97,000 for a family of four. For the owner of a home of $250,000, the rebate check is likely to be $400.

Why ignore the value of the home?

“We may have people who live in a community that is changing rapidly. They may be a senior citizen who bought their home 30, 40 years ago. Now, they’re living off their Social Security check. They’ve living on a fixed income. And suddenly, they find they own a $700,000 home. They can’t face a $1,000-plus property tax increase. That’s going to put a major burden [on them]. That’s why it’s tied to the income,” said rookie Ald. Carlos Ramirez-Rosa (35th).

Homeowners would still have to apply for the checks — and that means homeowners would have to be educated about the rebate program. That kind of marketing is something the Daley administration failed to do, which is why so many homeowners left money on the table.

“When the last one went through in 2010, hardly anybody knew about it. It wasn’t very well publicized. It wasn’t marketed out there. And if you remember, that rebate was actually in the form of a small cash card. It was very difficult to go through the process. And that cash card was also taxed,” said Ald. Scott Waguespack (32nd).

Waguespack said assuming help that will never come from Springfield is not only foolish. It’s disingenuous. It holds out false hope to homeowners who really need the help.

Ramirez-Rosa (35th) couldn’t agree more.

“This is what the working people of the city of Chicago deserve. They deserve to be protected. They’re being nickel-and-dimed every single day,” Ramirez-Rosa said.

At a City Hall news conference on the eve of Emanuel’s budget address, the Progressive Caucus also declared it’s strong opposition to Emanuel’s plan to give Chicago cabdrivers a 15 percent fare increase, but give ride hailing companies the keys to the kingdom — the right to make pickups at McCormick Place, O’Hare and Midway Airports.

“It would do real harm to the thousands of Chicagoans who drive cabs, creating negative ripple effects” all across the city, Ald. Roderick Sawyer (6th) said.

The $712 million package of tax and fee hikes — on top of annual increases in city sticker, water and sewer fees previously approved — are enough to choke a horse. But Emanuel aides argue that it’s the only way to shore up police and fire pensions, eliminate the structural deficit the mayor inherited over the next four years and end what the mayor calls the “gimmicks and shenanigans” that former Mayor Richard M. Daley used to “mask the real cost” of government.

That’s even though the $500 million general obligation bond issue approved Monday by the City Council’s Finance Committee includes $225 million more in so-called “scoop-and-toss” borrowing that will saddle another generation with debt that should be paid off today.

The mayor’s team is under no illusions about the junk bond rating that has already cost Chicago taxpayers tens of millions of dollars in penalties and higher interest rates. It will take years to get rid of it.

“Look, it’s a lot easier and a lot quicker to be downgraded than it is to be upgraded. But we think this budget will set us on a path to improve the credit rating of the city” over time, said a member of the mayor’s finance team, who asked to remain anonymous


Brown: Property tax rebate plan gaining backers
WRITTEN BY MARK BROWN POSTED: 09/21/2015, 04:54PM
The biggest problem with the property tax has always been that it doesn’t take into account a property owner’s ability to pay.

A home that greatly appreciates in value from the time it was purchased can put a homeowner in the position of not being able to afford to continue living there if the taxes increase proportionally.

That’s the bright side of a proposal advanced Monday by a bloc of Chicago aldermen hoping to temper Mayor Rahm Emanuel’s expected $500 million-plus property tax hike ask with a rebate for lower-income homeowners.

It’s the second such rebate plan now endorsed by different groups of aldermen who say they want to limit the impact of the property tax on “working families,” not to mention limit the political hit to themselves.

The new plan, offered by the City Council’s Progressive Caucus on the eve of Emanuel’s budget unveiling, would tie the rebate to a homeowner’s income, as did a similar plan previously offered by Ald. Proco Joe Moreno (1st).

The big problem with paying a rebate is that the property tax increase would no longer produce as much revenue as the mayor is seeking. That would force him to either ask for a bigger tax increase to produce the same net yield or, as the aldermen suggest, find the extra revenue elsewhere.

Either way, paying a rebate would result in higher income homeowners and owners of commercial property such as office buildings and shopping centers subsidizing those who receive it.

With a rebate based on income, we could have a situation where next-door neighbors with identical homes could see one getting money back from the city while the other doesn’t.

The plan offered by new Ald. Carlos Ramirez-Rosa (35th) and endorsed by the Progressive Caucus would set that bar at 400 percent of the federal poverty level, which comes out to about $97,000 for a family of four. The income limit would vary by family size, said Rosa, who calls his proposal an “opening salvo.”

City homeowners earning below that mark would get the rebate regardless of the value of their home while those who earn more would not. The homeowner would have to apply for the rebate and presumably provide proof of income, requiring a new level of bureaucracy.

Monday, September 21, 2015

Short sighted decisions are being made.

Aldermen have more to lose than Emanuel in tax-hike vote as they decide if they should tax the city out of existence. 

Keep in mind that there is no way that Rahm is going to complete this term. The aldermen will be left holding the bag. WRITTEN BY FRAN SPIELMAN POSTED: 09/20/2015, 09:01PM
Chicago Mayor Rahm Emanuel at a City Council meeting last year. | Al Podgorski / Chicago Sun-Times
Before Mayor Rahm Emanuel’s second inauguration, his own friends likened the crisis before him to the one President Harry Truman faced before dropping the atom bomb on Hiroshima and Nagasaki that ended World War II.

They argued that the solutions to Chicago’s $30 billion pension crisis would be so painful and politically unpopular, Emanuel would either be unable to run again or choose not to seek a third term

Emanuel fueled that speculation by exhorting his staff and aldermen to “feel liberated” and “govern as if we ran our last election . . . What will you do then with that liberty?’ ”

Now, that moment of truth has arrived — and it hardly feels like liberation day.

As the Chicago Sun-Times first disclosed three weeks ago, Emanuel will lower the boom on Chicago taxpayers with a $500 million property tax increase for police and fire pensions and school construction and a first-ever, monthly garbage collection fee, now pegged at $9.50 per household.

The 2016 budget that Emanuel is scheduled to unveil on Tuesday also includes a new tax on e-cigarettes and other smokeless tobacco products and a $1–a-ride surcharge on Uber and other ride-hailing services that have siphoned business away from taxicabs.

The mayor still hopes to soften the blow of the 60 percent property tax increase by persuading the Illinois General Assembly to raise the homeowner exemption and hold harmless owner-occupied homes worth less than $250,000. House Speaker Michael Madigan (D-Chicago) has scheduled a hearing on that tax break for next week over the objections of Republican Gov. Bruce Rauner.

If the mayor’s friends are right about a second term being Emanuel’s last, he’s uniquely positioned to solve the pension crisis and seal his place in history as the mayor who steered Chicago away from the financial cliff.

He can propose the remedies needed to shore up police and fire pensions, eliminate the structural deficit he inherited and end the “gimmicks and shenanigans” former Mayor Richard M. Daley used to “mask the real cost” of government without worry about the political fallout.

Same goes for Ald. Pat O’Connor (40th), Emanuel’s City Council floor leader. He’s the 32-year-veteran who has told associates he expects this to be his final term and who has the unenviable task of rounding up votes for the mayor’s doomsday budget.

But what about the 49 other aldermen who will be asked to join Emanuel in walking the political plank?

Are they prepared to kiss their political careers goodbye, if that’s what it takes to shed the junk bond rating that has already saddled taxpayers with tens of millions of dollars in penalties and borrowing costs?

“I’m going try to do this job to the best of my ability without regard to whatever backlash we might face at the ballot box later because there’s no way to please everybody in the situation we’re faced with. You just have to accept that and get over it,” said rookie Ald. Brian Hopkins (2nd).

“I know there’s going to be some more controversial votes after this year. This is not a one-and-done thing. We’re going to have to face this constantly,” he said. “There’s no way around it . . . I’m absolutely prepared to do the right thing without regard to whatever consequences there may be.”

Downtown Ald. Brendan Reilly (42nd) said the level of political backlash will largely depend on Emanuel and his ability to frame the crisis in terms an angry electorate can understand.

“The mayor’s been doing a pretty good job describing how dire a situation we’re in. But the next several weeks are going to require an education campaign to make sure people understand what’s at stake. What happens if we don’t address this crisis?” Reilly said.

“There’s certainly shock value here. No one in Chicago has had to grapple with something of this magnitude before. So, I can’t predict how folks are going to react. But the next several weeks, people are going to be letting us know exactly how they feel,” he said. “There may be components of the budget plan that they react to and embrace and others that are harder for them to swallow.”

The biggest point of contention is the garbage collection fee — so much so that O’Connor has publicly questioned whether he can round up 26 votes to pass it.

Black aldermen have urged Emanuel to trash it on grounds it will leave some neighborhoods filthy, breed widespread avoidance and, possibly, cost laborers their jobs. That’s even though the idea originated with Ald. Roderick Sawyer (6th), chairman of the Black Caucus.

The chairman of the City Council’s Hispanic Caucus has said it would be “very difficult to do both” a garbage fee and a $500 million property tax increase that amounts to a “double-whammy” on homeowners.

And Southwest Side Ald. Mike Zalewski (23rd), a former deputy commissioner at the city’s Department of Streets and Sanitation, has argued that the mayor’s plan lets homeowners who stockpile carts off too easy.

Ald. John Arena (45th) has also said that the garbage fee should be “implemented in a way that encourages recycling,” by taxing the cart — not by “charging everybody equally.”

Sources said Emanuel plans to ignore all of those concerns and forge ahead with a flat monthly fee now down to $9.50 per household.

The fact that it’s not as fair as charging for each cart and will do nothing to encourage recycling is less important than getting homeowners to accept the monumental change and handling the billing smoothly enough to actually collect the $100 million in annual revenues.

“I’m prepared to vote for it. But I’m still listening to the forces of my community before I make my decision. Overwhelmingly so far, they’re not in support of the property tax increase or the garbage fee collection tax,” said rookie Ald. Chris Taliaferro (29th), a former Chicago Police sergeant.

Taliaferro said his West Side constituents understand the magnitude of the financial crisis. But they’re more concerned about the impact on their own wallets.

“We understand the position the city is in. We understand the position my personal [police] pension is in. It’s in jeopardy. But you have to look at what they see as well. And what they see is their financial ability to afford a tax increase, what the consequences are to their personal finances,” he said.

“It definitely will have some type of impact from a political perspective and a re-election perspective. But it’s something we need to address with our communities and let our communities have a voice in how we vote,” Taliaferro said. Whether it has some type of political consequences or not, we have to vote on what’s best for the city and best for our community. So, it’s a difficult decision.”

Well aware of how tough a vote he’s asking aldermen to cast, sources said Emanuel is prepared to frame his 2016 spending plan as a vote — not just for this year, but for the next 20 years.

“People who make the right decision will get the mayor’s backing and support,” said an Emanuel confidante, who asked to remain anonymous.

And what happens if Emanuel doesn’t seek re-election and is not the political force that he was in 2015, when his allies created a $4 million super PAC to re-elect him and strengthen his City Council majority?

“Nobody could argue that he’s not a formidable fundraiser with a formidable network,” even if he’s a lame duck, the Emanuel confidante said.

Daley’s political playbook called for holding the line on taxes until the budget that immediately followed an election, then lowering the boom on taxpayers and giving them four years to get over it.

But that formula won’t work this time.

Emanuel has already offered to raise property taxes by an additional $170 million for the Chicago Public Schools if teachers accept the equivalent of a 7 percent pay cut and the state reimburses CPS for “normal” pension costs.

That would require the City Council to cast a second vote — this time to reinstate the old, dedicated property tax levy for teacher pensions — once the state budget stalemate ends and a new teachers contract is hammered out.

“I know that a lot of people are saying, ‘Let’s get this done early in the term so that people will forget.’ But I don’t believe in that,” said Ald. Scott Waguespack (32nd), a leader of the anti-Emanuel Progressive Caucus. “I think people will fully understand the impact once they see those tax bills and you have to convince them that what you voted on was the right thing and it will help the city in the future.

“We’ve ignored a lot of these problems for many years. But at the same time, I don’t think we’ve done all we could so far to alleviate the property tax hike,” Waguespack said. “We’re still working on that by providing a lot of other possible revenue streams and looking at alternatives to the property tax system the way it’s set up now and trying to equalize the impact on businesses and residents.”

Waguespack was asked whether he is prepared to cut short his political career, if that it takes to solve Chicago’s financial problems.

“Well, it’s kind of funny because people always told me that, if I voted against stuff in the past or voted ‘no’ or voted ‘yes’ on certain things, that I’ll never make it in the City Council. But some of us have survived on doing the right thing. So, I don’t see it as a problem,” Waguespack said.

Thursday, September 3, 2015

Done deal.

Emanuel set to call for largest property tax hike in modern Chicago history as he decides not to cut spending. 

Saturday, August 8, 2015

Teacher strike is coming.

Karen Lewis bashes Claypool over 'strike-worthy' contract demand

WRITTEN BY BECKY SCHLIKERMAN AND FRAN SPIELMAN POSTED: 08/07/2015, 12:01PM

CTU President Karen Lewis responds to Gov. Bruce Rauner's proposals for CPS and talks to reporters about contract negotiations. | Rich Hein/Sun-Times
A call for Chicago teachers to pay their full pension contributions is “strike-worthy,” Chicago Teachers Union President Karen Lewis said Friday.
That amounts to a seven percent pay cut for teachers, Lewis told reporters at a downtown news conference.
It’s an effort by new Chicago Public Schools CEO Forrest Claypool to “force us into another

Tuesday, July 14, 2015

We like the truth every once and awhile

Opinion: Stop failing, tell the truth about pension mess

WRITTEN BY ED BACHRACH POSTED: 07/13/2015, 03:30PM
Members of the Chicago Teachers Union picket outside City Hall to protest $200 million in planned public schools cuts July 2 in Chicago. Chicago school and city officials detailed the cuts, including layoffs, scaled-back maintenance and reduced transportation, to the nation's third-largest school district on Wednesday, one day after the district paid a $634 million pension bill officials said it couldn't afford. (AP Photo/Christian K. Lee)

Stephen Stills wrote a line in a famous Crosby Stills & Nash song. “We never failed to fail; it was the easiest thing to do.”
The mess that is the collapsing public employee pension funds for the City of Chicago is the result of decades of failed public policy. Every step of the way, our elected leaders could have taken action to right the ship and connect the promise with the money. They could have had the discipline to either pay for their promises or not make them. Instead they took the easy way out and failed forward. They pushed the hard choices to those unborn and not yet in office.

Now we are coming to the end of that road. The bills are due — past due — and politicians are once again scrambling for a temporary patch. How can we learn from the mistakes of the past and stop failing?

In the beginning, when the plans were founded, the limit of the city’s liability was a multiple of the employee contributions to the plans. Over the years, as the employee groups were organized into unions and engaged in collective bargaining, the city gave away increases in pension benefits and pay in exchange for labor peace. Then, in 2010, the city agreed to change the formula for contributions to the police and firemen plans to “catch up” funding to the 90 percent level by 2040. 

With woeful underfunding over the years, this now puts an onerous burden on the city and its taxpayers that did not previously exist. The city now has to pay for all the benefits, not just the multiple of employee contributions. The same scheme was built into the “reform” of the plans for municipal workers and laborers last year. That change is being challenged in court and might be thrown out.

The Center for Pension Integrity estimates that it would cost taxpayers at least $2 to $3 billion every year for the next 40 years for the four city plans plus the teachers’ plan to catch up. If this increase was financed by real estate taxes, it would require a 50 percent tax increase for generations, all to pay for promises made decades ago. Think that’s likely to happen?

We must insist that politicians stop failing us. Here are some measures that we should demand from our city’s leaders:
First, they should give us 15-year projections for the funding levels for the five major pension funds. Where will the funds be in 15 years? We should insist that these projections be made with an assumed 6% earnings, as recommended by the Society of Actuaries, and should include the most recent actuarial tables on life expectancies.

Then, if the city’s contribution to the plans will require a big increase — as predicted given the massive underfunding over the years — they should show us these amounts in terms of the percentage increase in real estate taxes. Whether the increases are funded this way or not, the easiest way for taxpayers to assess the magnitude of the tax increase is to translate it into their real estate tax bill.

Armed with this truth we should demand that leaders stop digging the pension hole. They should terminate the plans as soon as possible and put all new hires on either Social Security or some other affordable defined contribution plan. If it is possible to freeze benefits without diminishing or impairing them, then plan termination could also stop the accrued liability from continuing to pile up.

If leaders don’t take these actions, then one ugly truth is inevitable: bankruptcy. Either the plans will become insolvent or the drain on the city budget of paying for ballooning benefits will be unsustainable. Last year the five plans paid retirement benefits of $3.2 billion. These benefits have been going up by 6 percent a year. In 15 years they will be paying $7.2 billion in benefits annually. Where will this money come from?

Leaders can’t slap together a hasty plan to get them past the next election. It’s time to demand that they look at the big 
picture, tell the truth, and stop failing.
Ed Bachrach is the chairman of the Center for Pension Integrity.

Sunday, June 21, 2015

Payroll after payroll, pension after pension, he still manages to have a foreclosure suit filed against him. That's a failure of character yet, he is now calling the shots at the CTA.

Chicago's new transit chief is a train wreck waiting to happen. 

WRITTEN BY CHRIS FUSCO, PATRICK REHKAMP AND ROBERT HERGUTH POSTED: 06/20/2015, 07:00AM
Dorval Carter Jr. looks on as Mayor Rahm Emanuel introduces him as the CTA's new president last month. Brian Jackson / SunTimes file photo

When Dorval R. Carter Jr. returned to the CTA last month as the transit agency’s president, he had to temporarily give up a sweet pension deal that had paid him three-quarters of a million dollars in just five and a half years.
Taking advantage of a little-known early-retirement incentive offered by the CTA, Carter left his second stint with the agency in 2009 and started collecting a $137,229-a-year pension the same month he turned 52, records obtained by

Friday, May 29, 2015

Disgusting

The Hastert indictment is just the latest example of our leaders feeling that they are above the rules. Hastert is the Illinois second congressman in as many months to have his career destroyed by ignoring the rules. 

Locally, the Chicago pols have created a facade of reform only to be sure that the ethics rules are riddled with holes. We are hopelessly lost. Rahm was reelected just last month by an electorate that was easily bullshitted. When will people wake up?  

Our so-called leaders are funding a decadent and corrupt machine that exists to serve themselves rather than the city.  The players are extracting extreme and undue profits as the city careens into financial insolvency. Residents face bleak futures while the players enjoy bright futures.  The fact that Chicago is famous for this “machine” is disgraceful.

The hard truth is our elites – business and civic leaders – have sold the city out. While they strip the city of needed funds with their no-bid, non-competitive contracts for millions of dollars, they recycle a portion back into politics by funding the political machine that is designed to protect their own positions.

Let’s look at another example – the lawyers.  Since Emanuel’s executive order on May 15, 2011 banning pay-to-play, Schiff Hardin LLP attorneys have given $31,850 in campaign cash to

Tuesday, May 26, 2015

This guy has an ego as big as the city's debt. Proposes back door real estate tax increase.

CHAIR - AFRICAN, AMERICAN CAUCUS
Chicago homeowners have managed to avoid suburban-style garbage collection fees, but those “spoiled” days may be coming to an end, the newly elected chairman of the City Council’s Black Caucus said. “I hate to say it. I know there’ll be a lot of pushback. But a nominal fee may be something we have to look at” to solve the $30 billion pension crisis, said Ald. Roderick Sawyer (6th).

“All over the country and in smaller municipalities, they do pay for garbage collection. In Chicago, free garbage collection is something we’ve become accustomed to. But just like not having a sales tax on services, those days may be over. We have to look at it to balance the books.”

Four years ago, Inspector General Joe Ferguson estimated that a volume-based, “pay-as-you-throw” garbage collection fee could generate as much as $125 million a year for the cash-strapped city. Chicago could raise an additional $18 million a year by imposing a blue cart recycling fee, Ferguson said then. Emanuel ignored both ideas, apparently concerned it would be viewed as a back-door property tax increase.
But now that the Illinois Supreme Court has overturned state pension reforms and placed Emanuel’s plan to reform two of

Thursday, May 21, 2015

City workers are about to get what they voted for.

Did you think Rahm would not walk away from the pension obligations? You were dumb. He's walking. You have nobody to blame but yourselves. 

Nobody involved in the city pension crisis would want it to come to this, I’m sure, and there are plenty of assurances all around that it never will.
But if city pension funds are allowed to continue on their current trajectory and become insolvent, whose responsibility is it to make sure the retirees get paid?
I’ve always assumed the answer is that it’s ultimately the responsibility of the city, and therefore of city taxpayers.
OPINION
Maybe not.
In defending against a lawsuit brought by city workers and retirees over benefit cuts to those covered by the municipal employees and laborers pension funds, lawyers for the Emanuel administration have started casting doubt on that assumption.
Moody’s Investors Service also made reference to this legal uncertainty in a report this week clarifying the reasoning behind its decision to downgrade the city’s bond rating to junk status.
Illinois law defines pension benefit payments as obligations of the pension funds, which are separate legal entities from the city, Moody’s noted.
“But if the pension funds are unable to fulfill these obligations, it is unclear which party will

Thursday, May 14, 2015

Layoffs Coming Soon

20% reduction in workforce across the board in all affected agencies (except police and fire) predicted! Layoffs may eventually hit 40%.  

Moody’s Investor Service dropped the bond ratings of Chicago Public Schools and the Chicago Park District to junk a day after it did the same for the city of Chicago.
For CPS, the downgrade doesn’t trigger any new payments to financial institutions, but the worsening of CPS’ ratings could potentially affect negotiations the district has entered into with several banks over those “swap” termination fees.
Moody’s dropped CPS’ rating three notches to Ba3 from Baa3, with a continuing negative outlook. The Chicago Park District saw the same three-notch slide to Ba1 with a negative outlook.

CPS’ rating, which determines its borrowing costs, applies to $6.2 billion in general-obligation debt; the park district’s rating to $616 million in general-obligation debt.
Moody’s blamed CPS’ “steadily escalating pension contributions and use of reserves to fund those contributions.”
“We believe pension costs will place increasing strain on the district’s precarious financial position” absent new revenue or cuts, “both of which appear increasingly difficult for the district to achieve,” it wrote of CPS.
As for the Park District, it said, “We perceive increased risk that the city’s intensified pressures will adversely affect CPD’s [Chicago Park District] financial operations and position.”

The Chicago Park District says it strongly disagrees with the downgrade and Moody’s assessment that the park district has governance ties to the city. The park district has operated as its own entity for 81 years. It also has its own pension reform that went into effect in January and allows for any source of