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Respected Contributor
Posts: 2,985
Registered: ‎03-15-2010

Re: Underfunded pension again, but these folks have a plan to fix it.


@hckynut wrote:

@mememe

 

Curious, y the tiny font?

 

 

hn


It is the same size as this (3)  it is not tiny on my screens.

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Honored Contributor
Posts: 19,443
Registered: ‎11-03-2013

Re: Underfunded pension again, but these folks have a plan to fix it.


@mominohio wrote:

That's IL and their politics for you. 

 

I guess people aren't understanding that the money for pensions and government entitlements is going to have to come from somewhere, and they are going to take it from wherever they think they can get it, any way they think they can take it. 

 

Look out, it's going to be a bumpy ride.


The never ending legacy of Blagojevich lives on.  I've lived in IL all my life and where we are is so maddening, painful and frightening.  He took an already bad situation and shot it full of steroids.  I don't hold out a lot of hope for the candidates coming up for many elections but there is one that may give Emanuel a run for his money and maybe a flicker of light to start the process of righting this ship.

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Honored Contributor
Posts: 25,147
Registered: ‎08-19-2010

Re: Underfunded pension again, but these folks have a plan to fix it.

Texas, when you turn 65, freezes your property tax. The main gobbler will always be the schools, but, that freezes. Little stupid taxes like "noxious weed control" is still there, but, it's really small. 0..5% something like that.

No state income taxes on your paycheck either. They make it up on high property taxes, annual car inspections you have to get, etc.

 

Our biggest drain is electric !!!!!!!!!!!!!!!!!!!!!   Ay carumba!!!!!!!!!!!!!!

Gas, is reasonable, though.   Everything is 6 of one, half dozen of the other.

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Respected Contributor
Posts: 3,596
Registered: ‎03-10-2010

Re: Underfunded pension again, but these folks have a plan to fix it.

An audible gasp went out in the breakout room I was in at last month’s pension event cosponsored by The Civic Federation and the Federal Reserve Bank of Chicago. That was when a speaker from the Chicago Fed proposed levying, across the state and in addition to current property taxes, a special property assessment they estimate would be about 1% of actual property value each year for 30 years.

Evidently, that wasn’t reality-shock enough. This week the Chicago Fed published that proposal formally. It’s linked here.

It surely ranks among the most blatantly inhumane and foolish ideas we’ve seen yet.

Homeowners with houses worth $250,000 would pay an additional $2,500 per year in property taxes, those with homes worth $500,000 would pay an additional $5,000, and those with homes worth $1 million would pay an additional $10,000.

Is the Chicago Fed blind to human consequences? Confiscatory property tax rates have already robbed hundreds of thousands, maybe millions, of Illinois families of their home equity — probably the lion’s share of whatever wealth they had.

Property taxes in many Illinois communities already exceed 3%, 4% and even 5% of home values. Across Illinois, the average is a sky-high 2.67 percent, the highest in the nation

 

In south Cook County they already average over 5%. Most of those communities are working class, often African-American. The Fed says maybe you could make the tax progressive by exempting lower values, but that’s very difficult to do and, if you did somehow exempt the poor and working class, the bill pushed to the others would be astronomical.

Those rates have already plunged many communities into death spirals, demanding an immediate solution, but the Chicago Fed apparently wants to pour on more of the accelerant.

Don’t they understand that people won’t build on or improve property when property taxes are that high? When taxes are 3 percent to 6 percent, any value you add to your home is going to be taxed at that high rate forever. Have they never been to our communities with countless disrepaired, abandoned homes and commercial properties, which are the result?

Get this, which is part of the Fed’s reasoning:

“New taxes wouldn’t affect people thinking of moving to Illinois. While they would have to pay higher property taxes, that would be offset by not having to pay as much for their new homes. In addition, current homeowners would not be able to avoid the new tax by selling their homes and moving because home prices should reflect the new tax burden quickly.”

In other words, just confiscate wealth from current owners because they will pay, whether they stay or not, through an immediate reduction in home value.

This proposed tax would only address the five state pensions. What about the other 650-plus pensions in Illinois, particularly those for overlapping jurisdictions in Chicago which are grossly underfunded? The Fed was asked that at last month’s seminar and they, without explanation, said they didn’t bother to cover that.

I’ve earlier met Rick Mattoon, one of the Chicago Fed authors of the proposal. He’s a smart, likeable guy who I thought had lots of interesting information. For the life of me, however, I can’t understand how he would put his name on this proposal.

Property can’t leave, so seize it. That’s the basic idea

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Esteemed Contributor
Posts: 7,881
Registered: ‎03-14-2010

Re: Underfunded pension again, but these folks have a plan to fix it.

Texas has the WEP that takes away a huge chunk of your social security if you are getting a gov't pension, including public school teachers. No teachers unions here but they still find a way to abscond with our money.
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Honored Contributor
Posts: 25,147
Registered: ‎08-19-2010

Re: Underfunded pension again, but these folks have a plan to fix it.

Did U see where Arizona teachers got a 20% increase ?

That was a whopper.

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Honored Contributor
Posts: 8,011
Registered: ‎06-08-2016

Re: Underfunded pension again, but these folks have a plan to fix it.

It's like a very bad ponzi scheme.

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Respected Contributor
Posts: 3,345
Registered: ‎03-23-2010

Re: Underfunded pension again, but these folks have a plan to fix it.

My Dh is a retired CPD officer. We were life long Chicagoans until last October. We moved to AZ. after snow birding for 9 years.
DH contributed to his pension fund. He also maxed his 401 contributions.
Another poster mentioned Blagojevich's name. Well, I'm here to tell you, the plundering of municipal pensions started long before him. The previous mayor gave contracts for investments to his family members and cronies. Unions are huge in Crook County and Illinois.
DH cannot simply *cash out". His pension check is calculated on his last 3 years of earning and is 75% of that. He gets a 3% yearly raise based on this
He retired in 2006 with 30 years service. Many, many men and women were hired from 1976 and retired anywhere from 20-30 years of service. However, there have not been enough hired to keep up with people living linger.
Politicians borrowed from the municipal pensions and never paid back.
We have enough savings in case. Also, if DH dies before next, I only get 59% of his pension
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Honored Contributor
Posts: 37,772
Registered: ‎03-10-2010

Re: Underfunded pension again, but these folks have a plan to fix it.


@mememe wrote:

@MarieIG wrote:
Ours is about 3.4 which means that part of our retirement plan will have to mean selling our home and moving someplace with lower property taxes. I notice a lot of homes in my neighborhood are in foreclosure.

This may be easier said than done as the situation in Chicago is playing out almost everywhere.  Fabulous pensions to state workers and teachers with no way to fund them - in part due to medical costs skyrocketing.

 

We are "lucky" in that our property taxes have a low % but the only reason for that is the home prices are extremely high with lots of  multi-million $ homes in the area so there are plenty of pockets to reach into.

Our % maybe considered low but we still pay almost $5000 a year just for school taxes and the pension is still crying poor.  (??!?!?)

So in exchange for reasonable taxes we pay very high housing prices.

 

As we are also looking at retirement this seems to be the formula-- an inverse relationship to home $ and real estate tax %  (ugghhh)

 

An adorable and once VERY desirable community near us is now going through mass exodus due to the township ignoring the infrastructure, now it has to make repairs taxes soared to cover the cost.  Many people esp the younger families and seniors left they could not afford the taxes and due to the taxes the home values tanked.  For people with mortgages they were underwater and many just walked away....

Shame for a once recently prized "high society" community.

 

We know several couples who have retired out of the country.

 


 @mememe    I would like to know which state offers state employee and teachers fabulous pensions?  I'm pretty sure there isn't one.  I'm the recipient of a pension from one of if not the best state funds and I can assure you the pension I receive is in no way "fabulous".  Teachers receive quite a bit less than I.

 

I know a woman who retired and moved to Mexico.  Lost her SS benefits.

New Mexico☀️Land Of Enchantment
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Honored Contributor
Posts: 25,147
Registered: ‎08-19-2010

Re: Underfunded pension again, but these folks have a plan to fix it.

Strange, they're all leaving there and coming here why would anybody want to move there ? Wonder why she would lose her SS ? Be the last place I'd go because of gangs and such.