Illinois Supreme Court Rules Against Chicago Mayor
In a 5-0 decision today, the Illinois Supreme Court today trashed mayor Rahm Emanuel’s pension reform plan.
The ruling, welcomed by unions, dealt Another Blow to Chicago Taxpayers — and Mayor Emanuel.
Chicago Tribune Translation: “City and state politicians have known well that they were awarding pension benefits that Illinois governments cannot afford. Rather than properly fund pension systems, the politicians have spent on other priorities the tax revenues they should have set aside to fulfill all the generous retirement promises they made to their friends in public employees unions.”
I am pleased by the Illinois Supreme Court ruling. Ironically, so are the unions.
One of us is wrong but I don’t believe it’s me. This ruling should end the charade games.
Let the mayor blame the governor, but here’s the reality: The pretending period is over. The only solution to this mess is bankruptcy.
Mike “Mish” Shedlock
Bailout demands coming tomorrow.
It is for the children.
Mish – can Chicago file for bankruptcy? A friend at a rating agency told me that in IL cities cannot file for bankruptcy. Seems odd to me. Thx.
Bankruptcy law is strange. States can either allow it or not.
But once they do, it falls under Federal, not state jurisdiction, no matter how they try to rig the rules.
Illinois does not allow bankruptcy, but many cities in Illinois (Chicago is not one of them) are ready to file the moment they can.
If Emanuel asks for bankruptcy for the schools, I believe it would be granted.
The only other option is outright default
Mish
It isn’t strange when you think about it. One of the real and good purposes of federal law is to deal with judicial claims and issues that cross state borders and involve entities in multiple states, which practically any bankruptcy proceeding is going to involve.
Like you, I think it won’t matter one whit what Illinois state law says regarding bankruptcy of a city- when it is filed, the federal court system will take it up regardless. Sure, someone can file suit in Illinois court, but they will just end up in the queue of bondholders in the federal case.
My long term prediction on these cases is this- eventually state courts will try to impose taxes by judicial fiat, bypassing the legislatures and city governments. It will interesting to see the reponse.
The truth of the matter is :
This Judge made the correct decision.
The Judge is not to change the law.
The Judge is to enforce the law.
A change in the Law is the Legislature’s job.
At the same time Rahm Emanuel’s pension reform plan was necessary
as was the litigation. Just step by step to bankruptcy being permitted.
They can say they tried everything else, you have to change the law to
let bankruptcy be permitted.
.
.
One has to wonder what the judge was thinking. Perhaps he was thinking about his own pension. Perhaps he was thinking, Rahm, you idiots dug this hole, you find a way out.
” One has to wonder what the judge was thinking. Perhaps he was thinking about his own pension ”
It reminds me of the TBTF bailouts.
.
.
Overheard In Congress.
Gentlemen we will not use taxpayers monies to bail out these banks.
—- Ahh Well Ahhh you do realize your stock account and IRA will be cut in 1/2
and these banks won’t have money to give your campaign next year
Gentlemen we must save these banks for the sake of the Country.
.
.
I can’t think of a more appropriate song, Promises Promises by Dionne Warwick:
A new and worse Detroit has been born as the exodus becomes a mass exit of businesses and people fleeing this tax tyranny they did not cause! The court retirees will lose too as this continues to unfold. Maybe they can replace the taxpayers with refugees that will get the handouts from Washington as long as that lasts. However no new tax revenue will come with these people so the retirees are still toast.
Toast and I mean burnt toast! Goodbye to the windy and now crumbling city!.
Only three words to the people of Chicago and Illinois. GET OUT NOW!
Public education is not a right. Chicago public education is not a benefit to the nation, nor the children.
Government OF and BY and FOR government officials and government employees, is DISGUSTING and has got to be ended asap … !!!!
Anyone know what the average pension payouts are given for the different fire, police, teachers sectors? It would be interesting for the taxpayers to know if the union guy next door was able to retire after 20 years with outrageous benefits or not.
Mish: there was an article some years back that the number of Chicago retirees who were receiving over $200k annually in benefits numbered in the 1000s. Do you have an update?
Chicago will continue down its road to destruction before outright bankruptcy. Default may be on the horizon as the state still does not allow bankruptcy, or default followed by bankruptcy if the state does not allow it.
I am not going to bad mouth Chicago as most cities and states are in the same boat. Most have not arrived at the point Detroit or Chicago has but it is coming. Public works like stadiums, Art and Cultural centers never really generate much income for the city. Yet we continue to build them. Major corporations get all sorts of tax breaks to include cheap land to build, energy usage breaks, state tax breaks all in the name of jobs which local politicians claim 100’s of jobs but usually fall way short of projections.
An example of this is HP wanting to place its corporate help center here in the city. They were going to create approximately 500 jobs, the state and city granted them 48 million dollars to build and they have created about 200 jobs. What a waste of money to be honest. We are a small city I just cannot imagine what large metro areas grant.
Giving into teachers unions is another big waste of money. We vote on property tax hikes here in our state. The last two tries have failed. Eventually they will win as it is all about the children. What a crock. The biggest problem is the lack of transparency at the local level of government and where they actually spend the money. Go take a look at your cities’ budget or expenditures and try to find out where it went. Tough to do I have tried. You cannot even get a receipt for a line item.
Old said: “Public works like stadiums, Art and Cultural centers never really generate much income for the city.”
And also: “Giving into teachers unions is another big waste of money.”
Think of it as checking off the boxes for the real estate industry. Sports teams? Check. Big budget schools? Check. Concert hall? Check.
The reality is far different. Aside from watching the big game on TV, very few people actually use the public works projects. The main driver is so that the real estate agents have another talking point about how “great” their city is.
With transportation so inexpensive it is much better to travel to Disney World once a year than go to the local amusement park -sure it’s cheaper, but the experience is so much better in Orlando. And listening/watching a concert on the home theatre is going to be a much better experience overall, unless you think you might “hook up” of course.
Look, there’s nothing the Iklinois Supreme Court could’ve fone: the citizens of Illinois placed the relevant provision protecting public pensions in their state constitution. Unless & until (a) that provision is repealed or (b) Spkr. Madigan allows municipal bankruptcy proceedingd, the courts, legislature & governor’s hands are all tied.
“I am pleased by the Illinois Supreme Court ruling. Ironically, so are the unions.
One of us is wrong but I don’t believe it’s me. This ruling should end the charade games.”
In the end, math wins.