I was infuriated to read a presentation by a senior economist from the Federal Reserve Bank of Chicago. It was at a seminar titled "Navigating Pension Reform in Illinois: What Lies Ahead?" We've already taken a hard look at Illinois' self-inflicted financial and pension woes, and how they threaten the economic future of every resident of that state. Now, to solve them, the presentation proposes to hit those residents even harder.
The title of the presentation is "Can (or Should) a Statewide Property Tax Be Used To Payoff the Unfunded Pension Liability?" (Link is to an Adobe Acrobat document in .PDF format.) Here are a couple of key slides used by the speaker. Click each slide image for a larger view.
Note the blatant contempt and indifference displayed by the speaker for the average Illinois taxpayer. A few lowlights:
- "The tax would be capitalized into real estate values which would prevent people leaving the state to avoid paying for the liability." We have decided that you, peasant, must pay for our unfunded promises to trades unions. Don't like it? Well, **** you! What's more, we're going to make sure you can't afford to move away to escape the tax, by making it more difficult to sell your house with its suddenly higher property tax.
- "A dedicated property tax would only be used to pay off the pension liability. Once this occurs, the tax expires." Suuuuure it does! I'm willing to bet, once the tax is put in place, it'll never expire. It'll simply be repurposed for other uses. When have politicians ever been willing to let people have their money back? If it wasn't for President Trump pushing with might and main, Congress wouldn't have passed tax reforms recently - and if the Democrats regain the majority, they're already promising to repeal the reforms.
- "It avoids squeezing out other state government services by making them compete for the same tax base." In other words, we don't need to save money on other state expenditure - we can go on spending like drunken sailors, and force our citizens to pay for the pension shortfall by imposing an additional tax that won't affect existing taxes. Pay up, peasant!
- "Communities with high effective property tax rates could be exempted since the additional property tax burden might have serious development consequences." Let's be clear. By "communities with high effective property tax rates", the speaker means Chicago, the heartland of tax-and-spend politics. In so many words, he's saying that property taxes can be raised for every other community in Illinois, while leaving Chicago - with its high city property tax rates - minimally affected. You live outside Chicago? Too bad, peasant!
I can only repeat what I said in the heading of this blog post. These proposals display nothing so clearly as "The incredible contempt of the political class for ordinary people". The politicians can and will make whatever promises they think will keep them in power . . . and then they'll make their people - you and I - pay for those promises, by hook or by crook, whether or not we think their promises, and the expenditure needed to make them work, were, or are, or will be, a good idea.
If it were up to me, I'd simply cancel the impossible pension promises and deals, and tell the unions to get real. However, the politicians rely on those unions to bring out the vote for them - so that isn't about to happen.
Illinois politicians. Tar. Feathers. Rails. Some assembly required.