(From Springfield, IL)
Get used to this folks. At one point people worked for living, now we vote for a living. At one point the government served us, now we serve the government.
Didn't see this coming...(yes we did)
According to the proposed tax levy, the bulk of the property taxes — $16.2 million — would go toward police and fire pensions. Other expenses covered by property taxes would be contributions to the Illinois Municipal Retirement Fund, payments of Social Security and Medicare taxes, and judgments.
The pension scam has finally caught up to us. How much time before we can expect further tax increases? How much time before we've maxed out every fee and creative tax option to make the tax burden less transparent? Do we think we can just grow so fast and furious that we can offset this burden? What happens when all the baby boomers retire on government pensions and we have the new guys coming in that we have pay additional benefits to?
When the private sector realized this model wasn't sustainable, it adjusted. If you feel it is appropriate to continue this unsustainable model, at the very least admit that the only thing that state and local governments can do to sustain this scam is by drastically increasing taxes and/or reductions on other services. Steadily increasing over time as we've done just will not be good enough.
It is greedy to expect good, hard working taxpayers to provide government types benefits that can only be guaranteed on the backs of taxpayers who don't have government benefits. Pretty soon, people are going to finally catch on.
In the local municipalities, liberals don't have the luxury to simply suggest that we tax the investors and employees and pretend that the average taxpayer is not on the line. This is going to be very interesting to watch.
Watch what happens...it's just getting started.....
For one thing this article is about the City of Springfield which was certainly not clear from your post. For another, it would raise the City's portion of the property tax by 23% not the entire bill which is implied by your headline.
As we witness the great Obama money grab/spend the effect on state and local governments has been ignored. While the feds seem to have, for the moment, the power to take our money without us having a say the state and local governments do not have that luxury. State and local governments seem far more closely connected to their constituents and will find it nigh impossible to raise taxes to cover shortfalls in their budgets. In other words, the taxpayers can stop state and local governments from raising taxes a lot easier than they can stop the feds.
So like a 600 pound sow the feds will crowd state and local units away from the public trough in their relentless pursuit of other people's money. What this means, ironically, is less pork on the local and state level. Seeing this over the horizon it would seem that the state and locals better get their increases rammed through in a hurry becasue when the Democrat tax increases trickle down onto the base the base will not be happy and getting local taxes increases will be much, much harder
"For one thing this article is about the City of Springfield which was certainly not clear from your post. For another, it would raise the City's portion of the property tax by 23% not the entire bill which is implied by your headline."
You can tell easily from the link, but I updated the post to make it more clear that this news is out of Springfield. You can try to marginalize a huge tax increase all you want, but increasing any portion of a property tax is a big deal. The article even makes it clear how much more each person would be paying vs before based on the taxpayer's assessment.
Before they would tell you that it's only this or that much. All those marginal tax increases have added up. Now can look for serious tax increases on top of all the other creative taxes and fees that are already excessive, unless they can creatively find new ones like a Gross Receipts Tax. Unbelievable.
It is easy to blame the result of 8 years of Republican Tax Cut, Borrow, and Spend policies on the 9 month Obama administration. It is easy to blame the Republican give aways to Wall Street and the Banks on the incumbent President as we begin to emerge from the Great Bush Recession of 2007-2008. The fact is that we are faced with the economic dilemma those misguided policies created. The hard reality is that every governmental level the public demand for government services out strips the revenue to pay for them.
Cutting government costs means fewer policemen on the streets. It means fewer fire fighters responding to situations that directly threaten property and life. It means streets and alleys with unfilled pot holes in the Spring and Summer and unplowed snow and ice covered roads in the winter. It means more crowded schools and fewer, less experienced teachers.
The alternative is equally unpleasant. So long as we must rely on 19th Century tax schemes - the ad valorum real property tax coupled with regressive excise taxation - to finance 21st Century government increases in local real property taxes are inevitable, a progression which is unsustainable as the affluent flee to communities in which the budgetary dislocation has not yet reached the tipping point.
Three Score and Ten Plus One
Keith Hays
To Keith Hays @ 10:14 A- Ditto
To B for Business original posting--what suggestions do you have for changing the manner in which monies are generated to take care of business on the various government levels. Easy to complain; harder to make constructive suggestions followed by implementation and then evaluation as to effectiveness and equity. :-)
Pattsi Petrie
"It is easy to blame the result of 8 years of Republican Tax Cut, Borrow, and Spend policies on the 9 month Obama administration. It is easy to blame the Republican give aways to Wall Street and the Banks on the incumbent President as we begin to emerge from the Great Bush Recession of 2007-2008. The fact is that we are faced with the economic dilemma those misguided policies created. The hard reality is that every governmental level the public demand for government services out strips the revenue to pay for them."
How do you blame bush for places like Springfield, Champaign, and Urbana who are certain to be in deficit territory if they are not already? Are you kidding me?
"The hard reality is that every governmental level the public demand for government services out strips the revenue to pay for them"
Yet there are ridiculous waiting lists of people applying to be fire fighters. Something is horribly wrong with that scenario.
It is easy to blame the result of 8 years of Republican Tax Cut, Borrow, and Spend policies on the 9 month Obama administration.
In no way would I defend the drunken sailor spending of previous administrations. However, the knee jerk reaction of the current administration and it's defenders seems to be either (1)blame Bush or (2)state that's what Bush did. This administration ran on change, not on copying what Bush did. If they're going to hide behind copying what Bush did they sure don't look any different than Bush and they can throw away the bumper stickers
The fact is that we are faced with the economic dilemma those misguided policies created
So the policy seems to be spend and tax and borrow. I guess doing it in a different order makes it different. And it would be interesting to see what the increase in the federal budget deficit looks like in comparison to Bush
The point I was trying to make is the feds are getting to the trough first and the local units are going to have a heck of a time plugging holes in their budgets with tax increases due to competition form the feds. Local units are typically hamstrung in having to have balanced budgets (at least on paper) while the feds clearly are under no such restraint
"To B for Business original posting--what suggestions do you have for changing the manner in which monies are generated to take care of business on the various government levels. Easy to complain; harder to make constructive suggestions followed by implementation and then evaluation as to effectiveness and equity. :-)"
Not provide platinum plated benefits to government employees that the taxpayer cannot even afford for themselves.
Stop accepting that it is our job as taxpayers to insulate government employees from the economic challenges of the real world. Currently, their pay and benefits are essentially guaranteed no matter how bad our treasury is looted to pay off special interests.
Make it a culture that pay and benefits are function of the financial well-being of the government's situation. Why should a government employee get a raise when they are spending more than they take it? Why shouldn't they when things are going well?
Make government employees accountable. They have no skin in the game. They get paid no matter what. They get benefits no matter what. In many instances they are not even required to live in the munipalities where the taxpayer is working to serve them. It seems you have kill somone, molest someone, or try and sell a senate seat to be removed from a government job.
Look for every opportunity to eliminate dependence on any monopoly so they can't tell you that demand exceeds revenue. It's pretty much too late for that, but if you don't even try, you are going to pay them as much the union in the next town negotiated and it's only going to get worse until you make a stand.
Start doing these things today and not wait for the next financial crisis to point out how over priced government services are.
Don't like these ideas? I suppose we would risk all the government employees flocking to the abundance of available jobs in the private sector. : )
When the next 20 pension receipients retire, we're going to pay out of pocket for their pension and ALSO pay the defined contribution for the new employee. This problem doesn't even go away when we start to fix it. Sad part is, people are fighting the argument to even start fixing the problem while the problem continues to compound.
Or we can think it was Bush's fault and that Obama and Pelosi will solve our problems by printing more money. Jeesh.
This is happening in Springfield. Right now, the City of Champaign owes the Police Pension fund millions of dollars. Its funded somewhere around 68% IMRF that is where the City Manager has his money? Over 100% Fire is underfunded too, but not as bad as the police.
The city has simply not kept up with its obligations over the years.
Take a close look at the percentages. The City of Springfield's take on the property tax bill ($.98) is extremely low in comparison to other communities in the area. Normal's take is $1.17, Champaign is $1.29, Bloomington $1.27, Danville $1.78, Urbana $1.29. Even at the proposed $1.15, Springfield will still be much lower than most of the other communities its size.
As for the Bush years, the tax cuts have reduced federal services to communities like Springfield, and have pushed the tax burden onto local and state communities. Just basic economics - if the feds reduce services somebody is going to pick up that tab.
Lastly, do we really need more hyperbole like, "At one point people worked for living, now we vote for a living. At one point the government served us, now we serve the government?" I mean, we're talking about a $61 tax increase in a city with very low rates. It's not like this is suburban Moscow in 1975, or something. Take it easy there, cowboy.
IMRF that is where the City Manager has his money? Over 100%
Don't turn this into a conspiracy about the city manager. IMRF is fully funded because they are the only ones by law that can force the municipality to pay them everything that they are owed. Also, don't get too worked up over the underfunding thing. Talk to an actuary and you'll most likely come to the conclusion that being somewhat underfunded isn't the end of the world.
The financing scheme of state and local government relying on regressive ad valorum, flat rate income taxes and excise (sales tax) revenues is especially vulnerable in periods of sustained economic contraction. When the national economy is flushed down the toilet local revenues are already in the septic tank. That is how the profligate policies of the past administration's 8 years directly impact Springfield, Champaign, and Urbana as well as the State of Illinois.
Any effective solution involves reform of the revenue side of the equation to shift the stream to a progressive income tax structure on the state and local levels eliminating the ad valorum real estate tax and restricting excise taxes to those areas in which they play a part in an overall regulatory scheme as, for example, alcohol and legalized gambling.
Three Score and Ten Plus One
Keith Hays
The financing scheme of state and local government relying on regressive ad valorum, flat rate income taxes and excise (sales tax) revenues is especially vulnerable in periods of sustained economic contraction.
So this seems to mean that when the economy is down there is less tax money to go around. Makes sense to me. When private business has to lay people off due to lack of work there is less income for the government to tax.
Any effective solution involves reform of the revenue side of the equation to shift the stream to a progressive income tax structure on the state and local levels eliminating the ad valorum real estate tax and restricting excise taxes to those areas in which they play a part in an overall regulatory scheme as, for example, alcohol and legalized gambling.
If this means there has to be a way to tax people on income they don't have so we can preserve the size of government under any and all conditions then this is lunacy. Take this to the extreme - every body loses their job except one guy. The prescribed solution is to tax that unlucky person at higher and higher rates until he's paying the entire load for everybody else? How about simply recognizing that government has to suffer just like everybody else when the economy goes bad?
The other rarely discussed topic about taxing is government's priorities. I am amazed that when municipalities do tax us, they usually spend the money on something to do with cars or police/ and fire. Maybe everyone is okay with that. I don't know. What should the pension be for the average retiring police officer or fire fighter? I know our guilt toward their "laying their lives on the line everyday for our behalf" is often exploited, but really, what's it worth? Should a pension be the size of most of the current salary?
I always find it confounding that people blame bottom line government employees for them wanting adequate compensations and benefits, while those voting the tax increases are compensated far more for doing far less.
The police on the street do far more, at far higher risk for a tiny fraction of what the chiefs and politicians make. Maybe we should spend less on the fat and more on the quality.
If we did, maybe we could go back to the time when EVERYONE could get decent benefits and compensation.
What should the pension be for the average retiring police officer or fire fighter?
What do you think it is? I have a feeling you don't really know. You are aware that they don't get Social Security benefits, right? And that's even if they pay into it from other jobs (it's greatly reduced, anyway).
I have often wondered why it is thatteachers and certain other civil servants don't get Social Security. Why is this? Is it constitutional or can this be changed?
You are aware that they don't get Social Security benefits, right? And that's even if they pay into it from other jobs (it's greatly reduced, anyway).
Please explain this. You do realize you contradicted your self, don't you?
We put in the same money and don't get the same benefits. We lose spousal compensation after our passing for one.
Please explain this. You do realize you contradicted your self, don't you?
No, I didn't contradict myself. It's just a little too complex to explain in one sentence and I know the attention span of most people is pretty short. Police don't pay into social security through their work. Instead, anyone in an Article 3 (downstate police pension) fund pays 9.91% of their salary into their pension fund. In return, they receive a pension when they retire. However, because they receive a pension, they are now subject to the Government Pension Offset (GPO) provision of Social Security. This provision effectively wipes out any SS funds that they would have coming to them. So someone who worked a second job during their career or didn't get hired by the PD until age 30 basically gets all of their SS credits flushed down the drain. And, as someone else briefly mentioned, your spouse gets hit by the Windfall Elimination Provision (WEP). I'm not as sure on that one, but my understanding is that it basically cuts your spouse's SS income should your spouse ever get anything from your pension after your death. That's only one scenario that I'm aware of. I think Pattsi has talked about it in the past.
I think it's messed up that the original poster completely and utterly fabricated and twisted reality to serve their own agenda, and then accuses others of "contradicting themselves" simply because he is ignorant of the civil servant/SS situation and is blissfully willing to avoide educating himself.
It says a great deal about this site that this person has front page privileges.
"I think it's messed up that the original poster completely and utterly fabricated and twisted reality to serve their own agenda, and then accuses others of "contradicting themselves" simply because he is ignorant of the civil servant/SS situation and is blissfully willing to avoide educating himself.
It says a great deal about this site that this person has front page privileges."
Who did I accuse of contradicting themselves? What did I fabricate?
What did I fabricate?
Uh ... you're using an incremental increase in taxes that will still leave Springfield's rate lower than comparable cities in the area to claim, "At one point people worked for living, now we vote for a living. At one point the government served us, now we serve the government."
Personally I find it more interesting that one of the leading Republicans from Champaign County is on a public blog advocating defunding of the police and firemen's pension funds. That should play real well during the next election.
It's too bad nobody from the MSM is paying attention to this thread. The damage to the local GOP could be pretty devastating.
"Personally I find it more interesting that one of the leading Republicans from Champaign County is on a public blog advocating defunding of the police and firemen's pension funds."
Once again a little blogger is getting way too much credit. Now you're telling me what I advocated for.
Sometimes it gets so silly that even the leading democratic strongholds start to do things that make fiscal sense: http://www.nypost.com/p/news/opinion/editorials/item_iQX0sxRQtMug2kEVlVg9rO or http://www.officer.com/web/online/Top-News-Stories/NYPD-Considers-Retiring-20-and-OUT-Rule/1$45921?keepThis=true&TB_iframe=true&height=650&width=850.
Looking for a more fair and balanced pension solution? http://www.governing.com/column/search-fair-pension-formula.
"It's too bad nobody from the MSM is paying attention to this thread. The damage to the local GOP could be pretty devastating."
Devastating like our state budget? Devastating like our municiple budgets? Devestating like our school budgets? If they are not in deficit now, they will be soon enough.
This provision effectively wipes out any SS funds that they would have coming to them. So someone who worked a second job during their career or didn't get hired by the PD until age 30 basically gets all of their SS credits flushed down the drain. And, as someone else briefly mentioned, your spouse gets hit by the Windfall Elimination Provision (WEP).
Windfall Elimination Provision does not apply to to survivors benefits. Also, if you get a relatively low pension you are protected. The reduction in your Social Security benefit cannot be more than one-half of the amount of your pensioin that is based on earnings after 1956 on which you did not pay Social Security taxes. Per SSA Publication No. 05-10045
Government Pension Offset: Your Social Security benefits will be reduced by two-thirds of your government pension. Per SSA Publication No.05-10007
"It's too bad nobody from the MSM is paying attention to this thread."
After some thought, it would be great if the MSM looked into this.
How much are benefits of total compensation costs for the local municipalities who continue to raise taxes, fees, and cut services? Because any amount over 30% is a premium over the private sector. I am really interested to understand the extent of that premium.
What is reasonable? 35% (5% premium)? 40% (10% premium) 45% (15% premium)? Keep in mind, you have to include all compensation costs, including pension and health care. I have actually heard people argue that those are entitlements and not compensation, as whacky as that sounds.
Did the pension recipients even live in the munipalities where the taxpayers have to work hard to "pay the bill"? Do they currently, or do checks get mailed to support someone else's econonomy?
B,
You seem to be getting your streams crossed. Two of the articles you posted deal with NYPD retirement. Here in Illinois, it's not like that. You can retire after 20 years with 50% of your final salary, but you cannot draw that salary until you reach age 50 (This is for Article 3 funds). It maxes out at 75% after 30 years. It's essentially the same as what your 'fair and balanced' article states, other than he mandates that you have to be 57 to draw a pension. While most cops don't work until 57, most of them don't draw a full 75% pension either. Even if you started at age 21 (which is not very common), you'd still have to work until age 51 to get all 75%. I'd wager to guess that most people don't start until around age 30. This would put them at 67.5% by age 57. And something else to consider is that the city is not mandated to pay anything toward retiree healthcare costs. It's a good pension, but it's definitely not enough to go jetsetting around the world. I also don't feel that it's excessive.
Also, I noticed that in one of the articles dealing with the NYPD retirement, the person they talked to stated that they get no cost of living raises. If this is true, then what might seem excessive at age 40 would be a pittance at age 80. I don't know if this is true (whether they get cost of living raises or not), but it's the first thing that popped into my head when I read that.
Also, if you get a relatively low pension you are protected.
How does this apply to what we are discussing? If you work 20 years for the fire department and have a second job (which is extremely common), your Gov't pension will be enough to effectively wipe out any SS benefits you have coming.
Further, there is more to the Offset Provision than stated. If one receives SS via a spouse, one could possibly lose all of the amount against another retirement, such as what is being discussed, because a spouse only gets 1/2 of the spousal SS. If, perchance, the spouse is dead, then the amount received is the full amount received by the dead spouse. This amount is reduced by the Offset Provision, but one might possibly actually receive some reduced amount of SS. Maybe even enough to cover the Medicare B monthly payment. :-)
Pattsi Petrie
Private accounts, Pattsi, and then the pension offset issue can go away.
Private accounts, Pattsi
What are you referring to? 401K's? That's a real scary thought.
http://www.pbs.org/wgbh/pages/frontline/retirement/view/
I was referring to soc security (pension offset rules make no sense if your federal benefit is a private account), but switching state and muni pensions to 401k's is a good idea also.
Have you noticed how many private employers offer pensions these days? Darn few. Too expensive.
Privatizing social security is one of the worst ideas that have been floated in a long time. Do I even have to remind you of the meltdown last year? SS is not a retirement account. It is a social safety net that (barely) keeps people out of absolute poverty. And again, if you are such a fan of 401K's, I'd ask that you actually watch the frontline show I linked. And note that it was produced in 2006, back when the market was rolling right along. As an aside, don't you work at the UofI? Maybe that's run, I always confuse the two of you.
How does this apply to what we are discussing? If you work 20 years for the fire department and have a second job (which is extremely common), your Gov't pension will be enough to effectively wipe out any SS benefits you have coming.
Depends on whether your talking about GPO or WEP. You are making generalized statements that may or may not be true, dependant on the specific situation. In the case above, yes, your SS benefits would probably be wiped out. But not everyone has the same work history/pattern. Say I worked 20 years in the private sector paying into SS then switched to a federal/gov job for another 7 years that did not pay into SS. If I have 900 @ mo. in SS benefits plus 400@mo. from a pension then my net would be 1166@ mo. since my SS can not be cut by more than two-thirds of my pension benefit.
Unsure of the legislative status on this date (no time to research at the moment) but last I knew Sen Fienstien (S484) and Rep. Berman (HR235) had sponsored acts calling for the repeal of both WEP and GPO, and Sen Milulski & Rep Voinovich were going to introduce in 111th acts calling for reform of one or both.
Oh, yes, I forgot to ask you how your statement: I was referring to soc security (pension offset rules make no sense if your federal benefit is a private account) makes any sense at all in the context of this discussion. You do understand that we're talking about people who earn a gov't pension and don't pay into social security for that job. When privatizing social security was being discussed years ago, they weren't talking about taking your money out of SS and investing it elsewhere (that would be a 401K). They were talking about making individual accounts within SS in which you could decide how you wanted your little piece of the pie invested. So your plan really has no bearing at all on this discussion.
"Too expensive."---Not quite true RSW as expense was far from the prime factor for private employers to quite offering pensions. Private pensions were exploited for years by employers and some unions, who used them as a revenue/power source until the government enacted control legislation. This left employers to find a 'arms length' benefit system with protected $'s to fund worker retirement. Additionally, workers wanted more control and more choices for investment options as well as limited ability to get at the $'s prior to retirement and pension portability between jobs. The 401k plan met these needs so nicely, the federal government created a limited version with its 'Thrift Savings Plans', integrating it with a new minimal annuity retirement system.
Yes, and if your SS "benefit" is not a pension calculation that is skewed to reward low wage workers, as it is now, there is no need for the pension offset rule.
Take our cop example - who paid into Soc Sec for a few years before joining the force at 30, and worked a few part time jobs later. If the Soc Sec money is in a private account and his benefit is just a return of that money and its earnings, why would anyone care if he is getting a big police pension?
If the Soc Sec money is in a private account and his benefit is just a return of that money and its earnings, why would anyone care if he is getting a big police pension?
Well, I would respond that if your scenario was the case, it would go against everything SS ever stood for. SS is there so people can't fall through the cracks. That's why it's referred to as a safety net. You can't fall....it will be there to catch you. If you screw around with SS and remove the net, there will be a lot of people who fall and break their proverbial backs when they hit the ground.
If you screw around with SS and remove the net, there will be a lot of people who fall and break their proverbial backs when they hit the ground.
Which is just fine with the Social Darwinists who press for a privatization raid on Social Security.
Three Score and Ten Plus One
Keith Hays
that's fine, anon, but I am not the one griping that my big gov't pension means that all my soc sec taxes amount to donations.
I think you are confusing anon's, RSW.