Govt. Pensions Created Most of $9 Billion State Revenue Gap
CHICAGO–Lavish, gold-plated pensions for retired local and state employees have created most of the current $9 billion state revenue gap projected through June 30, 2011, according to Jim Tobin, President of National Taxpayers United of Illinois (NTUI). Some Springfield politicians suggest a “solution” for closing this gap: Raise the state personal income tax as much as 67%. Gov. Patrick Quinn is expected to announce his support for the income tax increase on Wednesday, March 18.
Tobin presents these examples of budget-busting state pension benefits:
• There are 3,195 retired state and local government employees in Illinois who receive over $100,000 a year in pension benefits.
• Suburban & downstate government school employees can retire at age 55 after 34 years employment and receive 75% of their salaries, plus annual cost-of-living increases. Most suburban public high school teachers retire with salaries higher than $100,000 a year. Their subsequent pension benefits are astronomical. The highest retirement pension received by a former public school teacher in the state is $238,884 a year…a retirement pension of $19,907 a month.
• Retiring at 55 with a salary of $100,000 a year, the average Chicago suburban high school teacher will receive a total retirement income of $3,100,000.
• Tapas K. Gupta, of the State Universities Retirement System, is receiving a pension of $379,356 a year…$31,613 a month.
• Edward Abraham, in the same retirement program, receives an annual retirement pension of
$368,460…$30,705 a month.
• Former State Senator Arthur Berman, sponsor of the “Berman Tax Increase Amendment” to the State Constitution, receives an annual retirement pension of $186,156…$15,513 a month.
“One solution,” says Tobin, “is to require all new state hires to save for their retirement with their own contributions to 401(k) programs. Workers in the private sector now must rely on 401(k)s. They shouldn’t also have to contribute their hard-earned money to fund future retired government employees who will become pension millionaires.”
“The legislature also should increase the amount government employees have to contribute to their pensions by up to 10 percentage points.”