A few graphs to illustrate.
First, from the Illinois Policy Institute, a projection of CPS pension funding costs:
More on the projections of the teachers' pensions from the IPI here.
It's not clear to me, but I believe these numbers are just from status quo – not even factoring in the 16% cumulative pay raise "compromise" from Rahm. No wonder the charter schools are looking good coming out of this.
Of course, that's a short time period. What does it look like over a longer time period?
Yeah, that bump up just keeps increasing and increasing.
As noted in both links, the Chicago taxpayers are pretty much tapped out. Tax rates have been hiked already on both income and property. To get an idea of where a lot of that jump is coming from — the last few years of contributions would have been required to have been higher of pension funding "relief" hadn't been passed:
But while there was that funding "relief" there was no relief in the pension promises. The salaries weren't cut, the benefit levels have not been adjusted downward. Funny that the payments are cut by more than a third, but you don't see those promises being adjusted at all.
HMMM.
Anyway, teachers, I wouldn't be surprised if there were further "relief", but ultimately that "relief" will come out of your hides, and not only the taxpayers. Because the taxpayers will not be able to fill your appetites.
Adjusted by law, or adjusted by reality. Take your pick.
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Starless on September 11, 2012 at 9:41 am said:
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eatingdogfood on September 11, 2012 at 11:27 am said:
Give The Teachers Everything They Want !!! The Sooner That Illinois And The Democrats Declare Bankruptcy, The Better !!!
Tough Love on September 11, 2012 at 12:09 pm said:
Mary Pat,
A Plan failure accompanied by significant beneft reductions is assured, just the timing is not yet clear. Let's look at this in a positive light in the wider landscape … sometimes a "sacrafice" (in this case the pensions of Chicago teachers) must be made for the greater good.
When the Public Sectort workers (especially the youger actives who are throwing their money down the toilet) in CA, in NJ, and the many cities and towns with woafully underfunded pensions see that material pension reduction are indeed a likely outcome, it may finally sink in that 100% of a reasonable pension is better than 0% (or even 50%) of a big but financially unsustainable pension. Perhaps then, real reform can begin.
Blaine Dunning on September 11, 2012 at 2:05 pm said:
Same old story, different city and the tax payers are the ones who will draw the short straw once again.
TheBeachBum on September 11, 2012 at 7:00 pm said:
The unions have a stranglehold on this city. To engage them is like trying to topple a communist government. But like communism, which eventually ran out of other people’s money, Chicago is teetering on fiscal implosion.
Get rid of the unions and tenure, instate a teacher performance system, and you’ll begin to fix education.
Tough Love on September 11, 2012 at 10:08 pm said:
In some places (like Chicago, and many towns in CA and NJ State pensions) the problem won't be "solved" until at least half the pesnions for already accrued service are erased. The problem is simply too big to address with tax hikes or further service cuts, and as we all know, hikes in employee contributions are never material.
jefferson101 on September 11, 2012 at 8:04 pm said:
Chicago is going to wind up like Detroit, or even worse.
They will be broke and in default, and there is no way the State of Illinois can bail them out. The whole State may be in the same boat before it's over, anyway.
If we releect Obama, they will get a Federal bailout, but at that point the whole Country is going to be broke and in default anyway. If we don't, we need to let them die, as an object lesson to everyone else to get their houses in order before it's too late. That assumes, of course, that it's not already too late.
When the Chicago Teachers and the Delphi Salaried pensioners are in the same boat, I'll believe that someone may be able to learn from the mistakes of others, but it's not happening yet. So bring it on.