Tag: J.B. Pritzker

Illinois governor signs bill that increases Chicago’s pension liabilities

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202104061236SM______BNDBUYER_00000178-a783-de03-a7ff-b7e7bf7e0001_110.1#new_tab

Excerpt:

Illinois Gov. J.B. Pritzker signed legislation that benefits retired Chicago firefighters, rejecting city warnings adding to its already burdensome pension tab could damage ratings and drive up taxes.

The added cost to bring cost-of-living adjustments for all firefighters in tier one up to a simple 3% annual increase despite their birth date amounts to $18 million to $30 million annually and up to $823 million in full by 2055 when the fund is slated to reach a 90% funded ratio.

Pending legislation to do the same for the police fund carries a steeper price tag of up to $90 million annually and $2.6 billion through 2055.

Author(s): Yvette Shields

Publication Date: 6 April 2021

Publication Site: Fidelity Fixed Income

Cracks develop as top Chicago union leader testifies about convention industry: “We can’t exist” with the governor’s “Phase 4 limbo”

Mary Pat Campbell

Link: https://capitolfax.com/2021/03/04/cracks-develop-as-top-chicago-union-leader-testifies-about-convention-industry-we-cant-exist-with-the-governors-phase-4-limbo/

Excerpt:

* The Illinois Hotel & Lodging Association live-tweeted testimony today by Chicago Federation of Labor President Bob Reiter to the Senate Tourism and Hospitality Committee about the city’s convention business…

@BobReiterJr from @chicagolabor during IL Senate Tourism Cmte. hearing: Decisions made now will impact the #travel industry for this summer and beyond. Without a roadmap, current regulations are causing events to be canceled as far out as 2022.

@BobReiterJr: Other states like Nevada & New York are moving ahead w/ changes to allow for events to reopen. We have been working w/ health experts on protocols and believe events should resume w/ 50% occupancy cap and no maximum as long as precautions are implemented.

A balancing act needs to be had that protects people’s health but also need to look at what needs to be done to get people back to work. 25-30,000 union hospitality & convention workers are out of work & are making the decisions b/w paying for healthcare, mortgage or buying food

Author(s): Rich Miller

Publication Date: 4 March 2021

Publication Site: Capitol Fax

Pritzker must provide discovery in COVID-19 challenge or face sanctions

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/pritzker-must-provide-discovery-in-covid-19-challenge-or-face-sanctions/article_41683d52-7b81-11eb-8a54-e391cea9ed33.html#new_tab

Excerpt:

Gov. J.B. Pritzker’s administration has a Wednesday deadline to start turning over documents justifying why it ordered restaurants to limit their operations during the COVID-19 pandemic.

Attorney Greg Earl, with Myers, Earl and Nelson P.C., represents Geneva-based FoxFire restaurant, which sued the governor last fall.

“FoxFire is continuing this fight because what happens if another strain, that’s what we’ve heard of, another strain from Europe or South Africa hits and the governor decides to put in another 30-day window,” Earl said.

The governor has already issued 12 months of executive orders related to the pandemic. His most recent order issued Feb. 5 expires March 7.

Author(s): Greg Bishop

Publication Date: 2 March 2021

Publication Site: The Center Square

Editorial: The dangers of an oversized stimulus package and a lesson from Illinois — yes, Illinois!

Mary Pat Campbell

Link: https://www.chicagotribune.com/opinion/editorials/ct-editorial-stimulus-payments-1400-economy-20210210-3jtgubimtjgi5deaigdplzilpe-story.html#new_tab

Excerpt:

Look at Illinois, of all places. Next week, Gov. J.B. Pritzker plans to introduce his budget for the next fiscal year. While the details are sketchy, his office estimates the state will need to close a $3 billion deficit, less than the $5.5 billion his office originally estimated. A stronger than expected economy is partly due the credit. While closing a $3 billion hole is not great news, we’ll take what we can get around here.

Yet, rather than take into account rosier economic pictures states like Illinois are projecting, Democrats in Washington are pressing for another big spending bill, even as they juggle the other big news of the week, the start of former President Donald Trump’s impeachment trial in the Senate. They insist an undersized response during the Great Recession slowed that recovery. But keep in mind during that far worse slump, President Barack Obama’s stimulus program had a price tag around $800 billion. Since the pandemic hit, by contrast, Congress has responded with $4 trillion in new outlays.

Does that sound like “too little?” More than $1 trillion of that sum has not even been spent yet, according to the Committee For a Responsible Federal Budget.

Author(s): Editorial board

Publication Date: 10 February 2021

Publication Site: Chicago Tribune

Speaker Emanuel ‘Chris’ Welch wants a graduated income tax do-over — this time tied to pension funding

Mary Pat Campbell

Link: https://www.chicagotribune.com/politics/ct-chris-welch-speaker-graduated-income-tax-illinois-20210224-fuzpz3fznrdwzpp7lhnhdlflue-story.html

Excerpt:

New Democratic House Speaker Emanuel “Chris” Welch suggested Wednesday that the state should again ask voters to approve a graduated-rate income tax, but this time target the new money toward paying down Illinois’ massive pension debt.

The call for a do-over came after voters in November overwhelmingly rejected Democratic Gov. J.B. Pritzker’s graduated income tax proposal. Opponents, including Republicans and business leaders, used distrust of Springfield to argue for keeping the state constitution’s flat tax requirement.

Author(s): DAN PETRELLA

Publication Date: 24 February 2021

Publication Site: Chicago Tribune

When ‘closing corporate loopholes’ goes wrong

Mary Pat Campbell

Link: https://www.chicagobusiness.com/greg-hinz-politics/when-closing-corporate-loopholes-goes-wrong

Excerpt:

And that’s the context of that big $932 million tax hike on business Gov. J.B. Pritzker is pushing as part of his proposed 2022 budget.

Pritzker calls the proposal “closing corporate loopholes.” Arguably that’s true, at least in the sense that any tax break I don’t receive must be someone else’s undeserved loophole. But the proposal comes at the very time when population and jobs have begun to drop not only statewide but in the metropolitan area, and at a time when the state refuses to confront its ever-rising pension debt. Not to mention Chicago’s murder and car-jacking wave. Or what Cook County Assessor Fritz Kaegi is up to.

…..

In fairness to Pritzker, Illinois is not the only state to be moving its tax structure in his proposed direction, at least in part. For instance, according to the Tax Foundation, a Washington research group that’s fairly conservative but also frequently cited in economic circles, only 16 states grant the full accelerated depreciation that’s now in federal tax code. Pritzker’s proposed change there is worth $214 million a year.

Author(s): Greg Hinz

Publication Date:

Publication Site: Crain’s Chicago Business

If Pritzker and Welch really want voters’ trust, they’ll do this

Mary Pat Campbell

Link: https://www.chicagobusiness.com/joe-cahill-business/if-pritzker-and-welch-really-want-voters-trust-theyll-do

Excerpt:

If Pritzker and Welch are serious about winning trust, they’ll allow Illinoisans to vote on a standalone constitutional amendment repealing the so-called “pension protection clause.” To build public support and treat retirees fairly, such an amendment could be narrowly drawn to permit only reductions in future pension increases under the COLA mechanism.

Sure, public employee unions are likely to fight any change in pensions. But it’s worth trying to win their support. It can be done; Arizona unions backed a narrow amendment to a pension protection clause in that state’s constitution. If unions won’t cooperate, Pritzker and Welch should forge ahead anyway, as Rhode Island officials—led by Democrat Gina Raimondo—did in tackling a similar pension crisis.

Only after passing such an amendment and reducing the overall pension obligation can state officials justifiably ask taxpayers for money to close the remaining gap. Would a graduated income tax be the right way to raise the necessary revenue? Maybe. I’m not opposed to it on principle. The vast majority of states with an income tax charge higher rates on higher incomes. And the necessity of a constitutional amendment would give voters the final say.

Author(s): Joe Cahill

Publication Date: 25 February 2021

Publication Site: Crain’s Chicago Business

Illinois budget gimmicks continue; we have an opportunity to fix them!

Mary Pat Campbell

Link: https://www.truthinaccounting.org/news/detail/illinois-budget-gimmicks-continue-we-have-an-opportunity-to-fix-them#new_tab

Excerpt:

Cash basis accounting allows governments to ignore long-term liabilities, such as the pension and health care promises they made to their government workers, teachers, and firefighters. It also allows governments to shift money around or borrow money to make the budget appear balanced. This method is so deceptive that the IRS does not allow corporations making more than $26 million per year to use it. 

In his address, Gov. Pritzker highlighted that the budget includes the “full required pension payments,” which amounts to $9.3 billion. These payments are based upon a pension funding scheme so outrageous that an SEC official called it a “balloon payment on steroids.” 

After the state was charged with securities fraud for making such claims in bond offerings, the state had to start being honest in its bond offering documents. In the official statement related to the Illinois General Obligations Bonds of October 2020 is the following quote: “The State’s contributions to the retirement systems, while in conformity with State law, have been less than the contributions necessary to fully fund the retirement systems as calculated by the actuaries of the retirement systems.” These actuaries say the amount required to properly fund the pensions is $14.5 billion, which is $5.2 billion higher than the amount included in the Governor’s budget.

Author(s): Sheila Weinberg

Publication Date: 17 February 2021

Publication Site: Truth in Accounting

Lightfoot urges Pritzker to veto firefighters pension bill

Mary Pat Campbell

Link: https://chicago.suntimes.com/2021/2/18/22290071/chicago-firefighters-pension-bill-unfunded-liabilities-martwick-lightfoot-governor-pritzker-veto

Excerpt:

A bill that awaits Gov. J.B. Pritzker’s signature would boost pensions for about 2,200 active and retired firefighters, but Mayor Lori Lightfoot wants the governor to veto it. Sun-Times file photo

Mayor Lori Lightfoot is urging Gov. J.B. Pritzker to veto a bill boosting pensions for thousands of Chicago firefighters, arguing it would saddle beleaguered taxpayers with perpetual property tax increases and cripple a pension fund dangerously close to insolvency.

The bill, introduced by state Sen. Robert Martwick, D-Chicago, a Lightfoot political nemesis, passed in the waning hours of the lame duck session and awaits Pritzker’s signature or veto.

It removes the “birth date restriction” that prohibits roughly 2,200 active and retired firefighters born after Jan. 1, 1966 from receiving a 3% annual cost of living increase. Instead, they get half that amount, 1.5% — and it is not compounded.

Author(s): Fran Spielman

Publication Date: 18 February 2021

Publication Site: Chicago Sun-Times

When it comes to pensions, we have crises of leadership on more than one front

Mary Pat Campbell

Link: https://www.chicagobusiness.com/greg-hinz-politics/when-it-comes-pensions-we-have-crises-leadership-more-one-front

Excerpt:

I’m not saying solving Illinois’ pension mess will be easy. It won’t. But dead silence surely won’t solve it. Voters hired Pritzker to fix problems. On this huge problem, he’s been a sad failure.

Which leads to pension story No. 2: That’s the utter turmoil that seems to have overtaken one of the larger public retirement systems in the state, the $11 billion Chicago Teachers’ Pension Fund, which receives a nice chunk of Chicago homeowners’ property tax payments every six months.

When I last looked at the fund in October, its executive director and other key officials had just resigned, one commissioner had been censured by other board members, and board President Jeffery Blackwell was publicly complaining of an agency “culture of intimidation, intentional misinformation, discrimination, slander, misogyny, fear-mongering, blatant racism, sexism and retaliatory actions.” But interim Executive Director Mary Cavallaro said in a statement there was no reason to worry, and that “the fund is committed to ensuring financial stability, operational efficiencies and seamless service to members.”

Well, guess who now has resigned—with a blast? That would be Cavallaro. “I can no longer tolerate the chaos and toxicity of the boardroom, along with the vile disrespect and insults directed toward me, the leadership team and the hard-working staff of the fund by certain misinformed trustees,” she said in a letter to the board. “I have grave concerns about the ability of fund operations to sustain the continued loss of key staff members because of bad trustee behavior and poor board governance.”

Author(s): Greg Hinz

Publication Date: 18 February 2021

Publication Site: Crain’s Chicago Business

Editorial: Get tough, Gov. Pritzker, on AFSCME

Mary Pat Campbell

Link: https://www.chicagotribune.com/opinion/editorials/ct-edit-fixing-illinois-chicago-budget-afscme-furlough-20210215-b6odtzttd5cjfkwu6vrde3e3be-story.html#new_tab

Excerpt:

Gov. J.B. Pritzker is scheduled to outline his budget plan on Wednesday for the fiscal year that starts July 1. It should include sacrifice from the nearly 40,000 state workers whose jobs have not been at risk like millions in the private sector and who got generous pay raises, funded by taxpayers, during the pandemic when Illinois’ unemployment soared to 16%. It is high time the state’s unionized workforce be part of the “shared sacrifice” our politicians so often expect of the private sector workforce.

….

While sectors of the state workforce have been extra busy due to COVID-19’s strain on unemployment benefits and health care systems, many state offices and agencies have been closed, services backlogged and workers learning to perform their jobs from home. Taking unpaid furlough days should not be a big “ask” compared with what the private sector has endured under Pritzker’s shutdown orders — restaurants, hotels, convention business, sports and marketing jobs — entire industries sidelined and in some cases, wiped out.

Other blue state governors confronted their unionized workforces months ago and showed leadership in doing so. Democratic governors in Wisconsin, California and New York cut public sector pay, instituted across-the-board spending cuts throughout state government, froze hiring and scheduled raises, and prepared for what would become a nearly yearslong economic slump due to COVID-19. They did it to protect all taxpayers.

Author(s): Editorial board

Publication Date: 15 February 2021

Publication Site: Chicago Tribune

Pritzker said the failure of his graduated-rate income tax would leave Illinois with two options. He’s eliminated both of them.

Mary Pat Campbell

Link: https://www.chicagotribune.com/politics/ct-jb-pritzker-illinois-budget-proposal-20210214-bjbay24vpvggfpg2urhbn4ojsy-story.html#new_tab

Excerpt:

Gov. J.B. Pritzker long warned that without his graduated-rate income tax, which voters rejected in November, Illinois would be left with only two options to address its chronic budget problems: raising income taxes or double digit across-the-board spending cuts.

But ahead of his budget address to lawmakers Wednesday, Pritzker outlined a state spending plan that would neither raise the income tax or alter the total budget outlay.

He did call for closing $900 million in unspecified “corporate tax loopholes,” which opponents are already labeling a tax hike on businesses in the middle of the coronavirus pandemic.

What remains to be seen is whether the governor will look to other avenues to increase revenue, although his options appear limited. He has opposed two of the leading options favored by some budget watchers: instituting a tax on retirement income and applying the sales tax to some services.

Author(s): DAN PETRELLA

Publication Date: 14 February 2021

Publication Site: Chicago Tribune