denisdman wrote:
Couple of things-
States cannot file bankruptcy. This was an issue back in the 1930's, and because states are considered sovereign entities, federal bankruptcy law does not apply to them. I suspect it would take something similar to what is being done in Puerto Rico to provide relief, meaning an Act of Congress.
The state constitution expressly prohibits meaningful pension reform. Every attempt has been shot down by the State Supreme Court. And let's be honest, pension reform is simply code for cutting benefits guaranteed to workers.
The answer, as it always is, is to live within one's means. But no one will accept meaningful cuts. So it is on the backs of taxpayers. And yes, with a shrinking population base, it makes the job that much tougher.
Some pension reform can be done now:
https://www.illinoispolicy.org/reports/ ... on-crisis/Quote:
Here is a list of what Illinois lawmakers can do immediately to address the state’s growing pension shortfall:
1. Ditch politician pensions. With no unions to oppose reforms, Illinois politicians should lead by example and transition their own pensions into self-managed plans such as 401(k)s.
2. Offer 401(k)s for new workers. The Illinois Supreme Court’s ruling on SB1 doesn’t affect the retirement plans offered to new government workers. Illinois lawmakers should follow the lead of states across the country – from Michigan to Oklahoma to Alaska – and adopt self-managed plans for all new state and municipal workers.
3. Offer optional 401(k)s to current employees. Government workers shouldn’t be trapped in insolvent, politician-run retirement plans over which they have no ownership.
4. Require all teachers to make contributions toward their own pensions. In Illinois, most public-school teachers don’t pay the required 9.4 percent employee contributions toward their own pensions. Instead, many school districts pay, as a benefit, some or all of the teachers’ required payments.
5. Get the state out of the business of managing local school-district pensions. School districts should be responsible for the true costs of their employees and should pay for their annual pension costs. Going forward, the annual benefits accrued each year by teachers should be paid for by local school districts and not the state.
6. Limit the growth of pensionable salaries. Government-worker pension benefits are growing at a pace that far exceeds the growth of taxpayers’ ability to fund them. With no way to structurally reform pension benefits for current government workers, the General Assembly’s only lever is to limit salary growth and other items that drive up pensionable salaries.
7. Allow municipal bankruptcy. Without the ability to reform pensions for existing workers, local governments should have more control over how they operate. That means having the option to file for bankruptcy. Bankruptcy should be the option of last resort, but it can help struggling municipalities restructure their debt, renegotiate contracts and reform pensions.