Tag: The Center Square

Report: Teacher pension error traced to single miscalculation in April 2015

Mary Pat Campbell

Link: https://www.thecentersquare.com/pennsylvania/report-teacher-pension-error-traced-to-single-miscalculation-in-april-2015/article_34d84a56-c306-11eb-a252-4b78895ea004.html

Excerpt:

The calculation error that upended the state’s largest pension fund has been traced back to a single month in 2015, according to an investigation from Spotlight PA.

The discovery came to light in a trove of documents obtained by reporters that found a tiny discrepancy that boosted the $64 billion Public School Employees Retirement System (PSERS) by a third of a percentage point in April of that year.

The consultant firm hired to review PSERS’ investment returns between 2011 and 2020, ACA Compliance Group, performed limited checks that skipped over the month in question, according to the report. The company that crunched the actual numbers, Aon, blamed the discrepancy on a data entry error.

No matter the fault, the miscalculation unraveled PSERS’ rate of return, dropping it from just above the mandated 6.36% threshold to prevent a contribution increase down to 6.34%. Now, about 100,000 workers who joined the system in 2011 or later will pay more beginning on July 1.

Author(s): Christen Smith

Publication Date: 1 June 2021

Publication Site: The Center Square

Illinois Comptroller says state’s finances heading in the right direction

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/illinois-comptroller-says-state-s-finances-heading-in-the-right-direction/article_71e04696-c56e-11eb-a0f7-8f7ebd2412e4.html#new_tab

Excerpt:

 Illinois Comptroller Susana Mendoza said the state’s financial condition is moving in the right direction despite a structural deficit, multi-billion dollar backlog of bills and one of the highest unfunded pension liabilities in the nation. 

During a virtual conversation Friday with Southern Illinois University’s Paul Simon Public Policy Institute, Mendoza said that wasn’t the case last year when things looked dire when the COVID-19 pandemic caused a delay in tax collections.

“That is why we had to rely on borrowing from the Federal Reserve at a lower rate just to get us through April and May, which typically would be our best months,” Mendoza said.

Author(s): Kevin Bessler

Publication Date: 4 June 2021

Publication Site: The Center Square

With $300 billion state pension liability, lawmakers approve Tier III plan for one unit of Chicago government

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/with-300-billion-state-pension-liability-lawmakers-approve-tier-iii-plan-for-one-unit-of/article_a2582218-c487-11eb-9e8a-fff0c619781e.html

Excerpt:

State Rep. Kelly Burke, D-Evergreen Park, did have one measure for Chicago Park District pensions. House Bill 417 brought a variety of changes, including bonding for paying pensions.

“They also create a Tier III for district employees where new employees will pay 11% of their salaries, instead of 9%, into the pension fund,” Burke said.

State Rep. Martin McLaughlin supported Burke’s bill, but said it neglects the statewide pension crunch as Democrats continue to pass new spending and new programs.

Author(s): Greg Bishop

Publication Date: 3 June 2021

Publication Site: The Center Square

New report has bleak economic outlook for Illinois

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/new-report-has-bleak-economic-outlook-for-illinois/

Excerpt:

A ranking of each state’s competitiveness and economic outlook places Illinois near the bottom.

The American Legislative Exchange Council’s “Rich States, Poor States” report ranked Illinois 47th in the country based on 15 factors, such as income tax rates, property tax burden and debt service as a share of tax revenue.

“Generally speaking, states that spend less, especially on income transfer programs, and states that tax less experience higher growth rates than states that tax and spend more,” according to the report.

Author(s): Kevin Bessler

Publication Date: 13 May 2021

Publication Site: The Center Square

Opponents vow to intensify campaign against proposed Florida pension revamp

Mary Pat Campbell

Link: https://www.thecentersquare.com/florida/opponents-vow-to-intensify-campaign-against-proposed-florida-pension-revamp/article_a37e3158-93d8-11eb-a8d7-7771f4ad8a68.html

Excerpt:

SB 84’s legislative analysis estimates the proposed change would save the state $8.3 million in the first year, increasing to $109.7 million annually after 30 years.

As of June 30, FRS held $164.3 billion in assets against $200.3 billion in liabilities, leaving $36 billion in unfunded liabilities, which means the FRS could cover 82 percent of its obligations if every member retired today.

Templin said an 80-percent threshold is the “gold standard” in pension viability and the FRS is “in very good shape.”

Which makes it attractive for manipulation, said AFSCME Florida Retiree Executive Board member Maxie Hicks.

Author(s): John Haughey

Publication Date: 2 April 2021

Publication Site: The Center Square

Illinois progressives aim for nation’s highest estate tax to give more to people with disabilities

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/illinois-progressives-aim-for-nation-s-highest-estate-tax-to-give-more-to-people-with/article_e6229414-8b53-11eb-8084-f7ac7b6876d2.html#new_tab

Excerpt:

The state would pay for the program by adding an additional 5% on Illinois’ estate tax from 4.95% to 9.95%. That would result in a top marginal rate of 21% on value over $4 million.

“The top marginal estate tax rate under this proposal would become the highest in the country at 21%,” Tax Foundation analyst Katherine Loughead said. 

Illinois is one of 12 states that tax the total value of an estate at the time of the owner’s death. Any estate value over $4 million would be subject to Illinois’ estate tax.

Author(s): Cole Lauterbach

Publication Date: 22 March 2021

Publication Site: The Center Square

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

Illinois House speaker, minority leader have different ideas about tax policy, ending state’s decline in population

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/illinois-house-speaker-minority-leader-have-different-ideas-about-tax-policy-ending-states-decline-in/article_d7fc1596-786a-11eb-b045-47c45d3e4bf5.html#new_tab

Excerpt:

The state lost nearly 80,000 people in the year that ended July 2020, according to an analysis of U.S. Census data. That’s 22,000 more than were lost the year before and the seventh consecutive loss of population in the past 10 years. Illinois led the nation in population decline for the past decade at 255,000.

Illinois House Speaker Emanuel “Chris” Welch, D-Hillside, told the Economic Club of Chicago on Wednesday the state has been losing population for years. Without details, he said the state needs to support small and big businesses. He also said leaders need to unite on messaging.

Author(s): Greg Bishop

Publication Date: 26 February 2021

Publication Site: The Center Square

Florida pension revamp would push public workers into 401(k)-type investment plan

Mary Pat Campbell

Link: https://www.thecentersquare.com/florida/florida-pension-revamp-would-push-public-workers-into-401-k–type-investment-plan/article_e9cfb564-7b87-11eb-a9b5-cfb50af7e2ac.html

Excerpt:

Senate Bill 84, filed by Sen. Ray Rodrigues, R-Estero, would require new public employees enroll in a 401(k)-type investment plan rather than in the Florida Retirement System (FRS), the nation’s fourth-largest public pension plan that serves about 5.1 million Floridians, including 4.425 million retirees.

According to SB 84’s legislative analysis, the 51-year-old FRS carries $36 billion in “unfunded liabilities,” the gap between assets and obligations, an exposure critics insist put the state at risk.

The bill offers an “investment plan” as an option to more than 644,000 active employees, 432,258 annuity recipients, 15,512 disabled retirees and 33,593 enrolled in the Deferred Retirement Option Program (DROP).

Author(s): John Haughey

Publication Date: 2 March 2021

Publication Site: The Center Square

Illinois taxpayers paying former lawmakers $2.1 million a month from underfunded pension system

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/illinois-taxpayers-paying-former-lawmakers-2-1-million-a-month-from-underfunded-pension-system/article_ac37e44e-6d84-11eb-a861-9372dad286d9.html#new_tab

Excerpt:

Illinois taxpayers pay more than $2.1 million a month to retired part-time state legislators or their surviving spouses from a fund that’s only 16% funded. The individual monthly payouts are as high as $18,000 per month. Some pensioners aren’t actually retired but still getting paid.

There are 425 people drawing off the General Assembly Retirement System, ranging from $122 a month to $18,000.

At 16% funded, state Rep. Mark Batinick, R-Plainfield, said GARS is the worst of the state’s five public sector pension funds.

Author(s): Greg Bishop

Publication Date: 14 February 2021

Publication Site: The Center Square

Nashville’s financial health earns it ‘sinkhole city’ designation

Mary Pat Campbell

Link: https://www.johnsoncitypress.com/news/state/nashvilles-financial-health-earns-it-sinkhole-city-designation/article_bc49b4a1-8c1f-5f63-a129-31093266adfe.html

Excerpt:

Nashville recently was named a “Bottom 5 Sinkhole City” by the nonpartisan think tank Truth in Accounting (TIA) in its fifth annual Financial State of the Cities report.

TIA examined the fiscal health of the 75 most-populous U.S. cities and graded and ranked the cities accordingly. The 2021 report is based on fiscal year 2019 comprehensive annual financial reports.

“At the end of the fiscal year 2019, 62 cities did not have enough money to pay all their bills,” the report’s executive summary read. “This means that to balance the budget, elected officials did not include the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.”

Author(s): The Center Square

Publication Date: 13 February 2021

Publication Site: Johnson City Press

Even if underfunded lawmaker pension system ends, taxpayers still on the hook for $320 million

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/even-if-underfunded-lawmaker-pension-system-ends-taxpayers-still-on-the-hook-for-320-million/article_274a2a54-6261-11eb-9fc3-177599b837c0.html#new_tab

Excerpt:

The Illinois General Assembly Retirement System, or GARS, is only 16 percent funded. 

This could be the year lawmakers end it, but that will come with a cost to taxpayers.

Some incoming state lawmakers are opting out of the underfunded pension system for Illinois legislators.

Author: Greg Bishop

Publication Date: 29 January 2021

Publication Site: The Center Square