Keep in mind that states legally cannot declare bankruptcy. Municipalities can, but *SURPRISE* Illinois's constitution has an amendment that prohibits that from occurring, except under special consideration from the legislature. (We really do have the constitution from hell...) But short other options, bankruptcy or not, its not like Illinois can just not default. If it doesn't have the funds for essential payments, then those payments aren't being made. Hell, the state is technically soft defaulting right now. There are hundreds of organizations that have been waiting months to be paid by the state.
Assuming a rising interest rate enviroment, and legislative breakdown on pushing through more tax hikes almost assures the state's failure to make essential payments (to pensioners and existing employees) in the next few years, and this will cause the federal government to get involved. The question is, do they help the state do what needs to be done to fix its constitution (axe the pension amendment), or do they punish the state economically by forcing the state to abide by its own laws and pushing through onerous taxes, thereby making an example out of us? Considering there are a dozen other states who have less than 50% of their pensions funded and could be coming up to the same fiscal cliff Illinois is already struggling to keep from fall off of, I fear that that it might lean towards the latter.

Same here, on both counts.

I've heard this before. Idk how much truth there is to this next part, but I've also heard that the management fees for many of the pension funds are greater than their returns. If that's true, I have little faith the current batch of leaders will do much to right the ship...not that I had any faith before that...

Yeah, it's the truth. The funds have had various returns. In 2016 that may have been correct, I don't know. In 2107 I believe the largest state fund had a return of over 12% over the employee and state contributions.

Republican governor Edgar is a huge part of today's problem. He created the current pension payment ramp where while he was governor, very little was paid into the system and it ramped up to the huge payments due today.

It appears you are correct that COLA was 3% before the attempt at reform and would stay that way after reform was struck down. I don't even know how this became about COLA, my theory about the collapse of the pension racket has to do with massive interest rate increases causing the enormous costs of serving these pensions to balloon. Perhaps state reveunes would increase rapidly under such a scenario, but I doubt they would outrun the rising interest rate costs of these liabilities.

Rising interest rate costs of what liabilities? Pensions liabilities are not driven by “interest rate costs.”

How do you think the State of Illinois covers the massive gap between it's revenue and it's operating budget? It's called debt, lots and lots of debt. The pensions will continue to be what they are, but what they are drives a huge budgetary shortfall year after year and we aren't even coming close to fully funding the pension liabilities. Guess what you have to do when you take out lots of debt? You have to pay interest on it. The State has been barely solvent for years despite a decade of the lowest interest rates in human history. What exactly do you think is going to happen when rates rise significantly?

Illinois will never pay off its pension obligations. I don't care what the stupid Constitution says. Those State employees are screwed.

Too many promises and lies.

But whatever, keep voting for the same people. Like clockwork, they will probably put that slimy hack ("make the rich pay their fair share.....but not really") Pritzker in office.

I wonder how Pritzker would respond to this question:

Mr Pritzker, what do you think about imposing a State tax on Capital gains to help fund pensions?

Watch him try to mumble and stutter his way out of that.

The majority of pensioners in Illinois are on the municipal, not state, level. Those municipalities can be allowed to go bankrupt if necessary, but even then those pensioners are not likely to get "screwed." If large level municipal bankruptcies start occurring here in Illinois, we'll likely see something similar to the grand bargain that Detroit came up with. That came with a restructuring and haircuts, but the pensioners didn't get told to take a hike. Michigan also has a similar state level constitutional amendment as Illinois does, and they managed to come up with their bargain nonetheless.

Detroit's bankruptcy left plenty of unanswered questions though, and the district courts here and the 7th Circuit might handle things differently than what happened up in Michigan. Who knows.

A lot, if not most of those municipal pensioners have pensions paid for by the state (ie school teachers.)

^ Yep, except for Chicago

Given the track record of Illinois courts with the pension amendment, I think any bargain will just get thrown out by higher courts outside of the bankruptcy court which (as mentioned above) is pretty much prohibited anyways.

The whole state is going to go down in flames, it's mathematically impossible to tax our way out of this. Let's not even consider the giant waiting list for payment we still have. Do you think those creditors will just accept what they are owed or do you think the unpaid bills have late fees and interest charges attached? They pay off those bills and what do they use? Debt which just means more servicing costs.

The state is currently adding about $6 billion a year in debt. Right now it's priced around 6-6.5%. That means, at current interest rates, the state's debt service costs rise by about a third of a billion dollars a year.

Filing for chapter 9 bankruptcy supersedes state constitutions because it is done in a federal court. Municipalities have that right, but states as we know it do not.

I like this idea of use of money to keep the museum from raising prices every few years. Id like to see them lock in the current rates for at least another decade or longer, till 2030 would be nice, especially for international and out of state visitors IMO. That's what the donors would really like to happen, all cost raises, but gave most of the money without restrictions.

I would also like to see a big portion of the 50 M used in an endowment or used to create wealth in a mutual fund of some sort to grow larger over the years and make it untouchable for a long time and not blow it all in one stupid Warhol POS purchase or something like that. I'm ok if they use the rest of the non invested money to cover the rail tracks and create an additional wing for their Asian art and ancient Indian sculpture collections and free up that space for their other art that is just stored away. That would expand the footprint and allow more visitors access at the same time.




http://www.chicagotribune.com/entert...418-story.html



Art Institute lands largest cash donation, $70 million in total







The Art Institute of Chicago publicly revealed the largest announced monetary gift in its history Tuesday, an unrestricted $50 million donation from trustee Janet Duchossois and her husband, Craig Duchossois, officials said.

In addition, trustees at Tuesday’s board meeting received news that board Chairman Robert Levy and his wife, Diane v.S. Levy, had ponied up another $20 million for operations and acquisitions at the not-for-profit institution.


..

There are no specific, immediate plans for the new money, Rondeau said, but he suggested it could be influential in shaping the museum’s future. The museum’s long-range plan has included hopes to put up a new building, possibly devoted to Asian art.

...

Levy said he hopes one of the things his family’s gift will do is “provide support to limit future price increases. … For us, access is a very important issue.”

The museum has had at least two price increases this decade. Most recently, in June 2015 general admission went up to $20 for Chicago adults, $22 for Illinoisans and $25 for those from outside the state.

My mistake.

Detroit's entry into Chapter 9 wasn't this cut and dry though. It was actually uncharted territory. Prior to Judge Rhodes' ruling, there had even been a popular assumption that the pensions would be given heightened protection rather than getting treated like any other contract.

Due to the uncharted nature, a different bankruptcy court in a different district might rule differently, but Detroit's precedent will certainly be taken into consideration either way.

While I do agree that price increases should be kept to a minimum when it comes to Chicago's major cultural facilities, especially its world-renowned museums, I'd still say that the Art Institute prices are amazingly inexpensive given the quality and quantity of art that is on display. Let's face it, we're talking about one of the world's great art museums, one with very, very few equivalents, not only in this country but throughout the world.

I do like the idea of adding additional space for their Asian collections, though. The one thing that seems to be relatively lacking is modern, contemporary art, even with the large amount of space in the Modern Wing. By moving some of what is in the Modern Wing to the current Asian galleries if and when a new wing is constructed for those works, it would be an overall win-win situation.

Aaron (Glowrock)

Aldermen's absolute veto power over ward projects gets unlikely court challenge
Posted By Maya Dukmasova on 04.16.18 at 02:55 PM

GlenStar, the luxury developer at odds with 41st Ward alderman Anthony Napolitano over a proposed 299-unit apartment building near the Cumberland Blue Line, has sued the city in an attempt to secure the necessary zoning changes to proceed with construction. But buried in its demands that a judge find city officials' actions regarding its proposed building unlawful is a major legal challenge to the age-old practice of "aldermanic prerogative."

This tradition, while not articulated anywhere in city code, has historically given aldermen veto power over developments in their ward. As the case of GlenStar's proposal has shown, when Napolitano decided he didn't want its apartment building in his ward, the City Council's zoning committee complied and didn't grant the developer a hearing or vote on its proposal...

https://www.chicagoreader.com/Bleade...ourt-challenge

^ Interesting... if this case works out in the favor of GlenStar, it could set a powerful precedent that aldermanic prerogative is no longer acceptable in Chicago... which would be absolutely fantastic!

^ I feel like we’ve seen this movie before re:lawsuits... even a victory for the developer would be narrow and only apply to the project in question, not aldermanic prerogative generally. Aldermanic prerogative is just a shortcut that enables City Council to function, imagine if every alderman had to weigh the pros and cons of every zoning change across the city. Now, aldermen generally have an obligation to conduct a predictable and consistent process for evaluating zoning changes before rendering a decision of support or no support, but this development did not really receive that.

https://www.google.com/amp/s/www.chi...media=AMP+HTML

The development went through the community process and was generally supported, Ald. Napolitano even wrote a letter of support before suddenly getting cold feet and deciding his ass was on the line if the new development brought more traffic and poor people into his ward. Basically he got scared after the NW Side racist NIMBYs turned out in force against a different affordable housing proposal in Jefferson Park.