Findings from TUA’s pension project on Bloomington-Normal, Illinois, are featured in this story from The Pantagraph.
BLOOMINGTON — Jim Tobin, president of Taxpayers United of America, is traveling throughout Illinois, including a stop Tuesday in Bloomington, pitching his ideas for pension reform.
“Illinois is in horrible financial shape and yet taxpayers are still expected to pour their hard-earned money into a failed government pension system,” said Tobin. “The state’s in such bad shape. It can’t sell bonds; it can’t borrow money.”
Taxpayers United of America, which its website says was founded in 1976 as National Taxpayers United of Illinois, suggests, “Without sweeping and immediate reform, Illinois’ pension system will collapse.”
Tobin said reform must include: raising the retirement age to 67; increasing employee contributions by 10 percent; increasing health care contributions to 50 percent; eliminating all cost-of-living adjustments; and replacing the defined benefit system with a defined contribution system for all new hires.
While he used to lobby for reform, Tobin said he’s now “letting taxpayers know” through the media and by direct mail to TUA members and other known “activists.”
Tobin said the results of his organization’s new pension study of government employees in Bloomington, Normal, McLean County, schools and Illinois State University will be available on its website www.taxpayersunited.org.
The Pantagraph also has detailed pension information from a December 2011 series which can be found by clicking here.
Linda Horrell, communications director for the Illinois Municipal Retirement Fund that covers non-contract government employees in nearly 3,000 downstate local governments, said IMRF is not a state-funded pension system so it is not included in the state pension reform discussions.
IMRF is funded by employee and mandated employer contributions as well as investment income. Horrell said IMRF does not include compounded cost-of-living adjustments and doesn’t offer retirees health insurance. Recently adopted guidelines also change benefits for employees hired after Jan. 1, 2011, including raising the full pension age to 67 — up from 60.
Charlie McBarron, director of communications for the Illinois Education Association, said the IEA took part in a summit Monday to discuss the state’s pension problems. He said the organization is bringing numerous ideas to the table to solve the pension problems in a “fair and constitutional” way.
Illinois has a $96 billion pension shortfall.
Findings from TUA’s pension project on Bloomington-Normal, Illinois, are featured in this story from WGLT.
The head of a conservative anti tax group is publishing pension benefit amounts for retired McLean County teachers and government officials.
“And the biggest problem with Illinois’s catastrophic financial system are these lavish gold-plated pensions.”
Jim Tobin, the head of National Taxpayers United, says eliminating defined benefit plans and putting all new government workers into 401k accounts is necessary to rescue the state from fiscal crisis.
But, representatives for workers point out the group’s allegations of pension millionaires assume that retirees will live to age 85. Most don’t. They also accuse NTU of cherry picking data and using only top earners as examples, not the average retiree who receives between $32,000 and $46,000 depending on which union workforce is involved. Larry Alferink heads the ISU Annuitants Association and says state pension costs are not exhorbitant when taken as a portion of total compensation.
The cost of the pension system to the state of Illinois was 9.1%, recognizing that the cost of social security is 6.2%. So the actual cost of the pension system above what every other employer pays is less than 3%.
State employees, Alferink says, do not get Social Security and the state does not pay into that system for its employees. Alferink says private universities average at least 5% retirement costs above the 6.2% of compensation they contribute to Social Security. Alferink also notes the state’s problems stem not from the size of the pensions but from the state’s failure to pay its share of the costs over decades.
During the anti pension campaign stop in Bloomington Tobin said recovery will require Illinois to convert state workers to 401k accounts moving forward.
“They have to stop the government pensions for new government hires. That will eliminate all unfunded liabilities in the long run”
Tobin also wants the retirement age raised to 67 and workers in the current plan to pay 10% of their income toward retirement. Alferink says 401k systems typically do not work out so well.
“One out of every six people outlive their benefits and then they have to fall back on the state. In this case, since the state is paying for the pension system it doesn’t work out so well because they end up paying a second time when those individuals are destitute.”
Tobin’s group likes to claim that only 2% to 4% of lifetime pension benefits are paid by direct state employee contributions. But, Alferink notes that is misleading because nearly 70% of pension payments come from earnings on worker contributions over decades.
Jim Tobin, President of Taxpayers United for America, was quoted in the Chicago Tribune on turning the Elgin-O’Hare into a tollway.
The federal government has signed off on an agreement allowing the Elgin-O’Hare Expressway to be converted into a tollway, officials said this week.
The decision will give the Illinois Tollway the authority to include the 20-year-old highway in its Elgin-O’Hare Western Access Project, according to officials in Washington, D.C., and Illinois.
The $3.4 billion project calls for building a tollway running along the western border of O’Hare International Airport. The tollway will link the Jane Addams Memorial Tollway (I-90) and the Tri-State Tollway (I-294).
This “bypass” tollway will connect with the existing Elgin-O’Hare Expressway, which will be widened and extended east along Thorndale Avenue. The decision by the U.S. Transportation Department allows tolls to be charged.
In addition to federal approval, the tollway agency said it also needs approval from the state and is working on a General Assembly joint resolution to include the Elgin-O’Hare plan.
The U.S. has the authority to make the Elgin-O’Hare eligible to be a tollway under terms of the transportation bill that President Barack Obama signed into law in July, said a spokesman for Transportation Secretary Ray LaHood.
“I am pleased that we found a solution, so that when built, this project can provide mobility for the people of Illinois for generations to come,” LaHood said in a statement.
The decision was hailed by U.S. Sen. Dick Durbin and Rep. Tammy Duckworth, who represents the area, as well as Gov. Pat Quinn and tollway Executive Director Kristi Lafleur.
The 12.5-mile Elgin-O’Hare was built in 1993 for $220 million. Despite its name, it connects neither Elgin nor O’Hare. It runs between U.S. Highway 20 (Lake Street) near Hanover Park and Interstate 290 in Itasca.
Backed by an advisory council’s report, Quinn in 2011 called for the project to be built to help stimulate the regional economy and potentially create thousands of jobs. At Quinn’s urging, the tollway authority later adopted the project.
But the move to turn the expressway into a toll road has stirred some critics.
James Tobin, president of Taxpayers United of America, called the plan an example of “empire-building” on the part of tollway officials.
“The road already exists as freeway,” Tobin said. “The tollway was set up to build new roads. … It’s a new revenue source and allows them to line their pockets, get pay raises and retire in pension glory.”
Tobin’s group took the tollway to court last year in an unsuccessful challenge of the near-doubling of tolls to pay for the agency’s $12.1 billion rebuilding program, called Move Illinois. The Elgin-O’Hare project is the centerpiece of that effort.
The new Elgin-O’Hare is expected to take 12 years to complete. To begin work, the tollway plans to spend $95.6 million this year. Potential construction includes noise walls along the existing Elgin-O’Hare, a Rohlwing Road (Illinois Route 53) grade separation and the construction of a new bridge to carry southbound Elmhurst Road traffic over I-90.
As part of the project, the tollway plans to build a $30 million ramp via York Road to access O’Hare property.
There are, however, no plans to construct a western terminal, as once hoped, because of the lack of an agreement between the city of Chicago and the major airlines at O’Hare, led by United and American.
The tollway authority, meanwhile, announced that 10 financial firms will be the underwriters for the first $1 billion in bonds for Move Illinois. An additional 10 firms will underwrite $500 million in refinanced existing debt.
The underwriting fee will not exceed $2.50 per $1,000 worth of bonds, tollway finance chief Michael Colsch said.
Tollway officials also announced Thursday a proposal to give motorists a total of three months instead of two to respond to toll violation notices.
Officials said the plan would be fairer to customers and is in line with toll agencies in other states. The proposal will need further approval, however.
The tollway board also approved a $1 million contract with Gilbane Building Co., of Chicago, to review construction practices and work that has been performed, officials said.
