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State senator warns day of reckoning is near as Illinois’ pension liability leads nation

State senator warns day of reckoning is near as Illinois’ pension liability leads nation

FILE - Illinois State Capitol
The Illinois State Capitol in Springfield, Illinois.

Yinan Chen | Wikimedia Commons

ILLINOIS NEWS NETWORK

Illinois has the highest unfunded pension liability of any state, and a state senator says it’s because policy makers are making the wrong decisions.

Fitch Ratings agency put out their 2017 State Pension Update this week. It shows that Illinois’ pension crisis is the worst in the nation at more than $151 billion. That’s $60 billion more than second worst New Jersey’s liability.

“Six states have long-term liability burdens that Fitch considers elevated [in excess of 20 percent of personal income],” the report said, “with Illinois carrying the highest liability burden at 28.5 percent of personal income.”

Fitch Senior Director Doug Offerman said taxpayers should care because the burden takes up more than 28 percent of all personal income in Illinois, “which is essentially a proxy for the wealth level, the resource base of a given government.”

Some Illinois lawmakers have been warning for years that the pension liability is going to take up a quarter of every tax dollar the state brings in.

Fitch Ratings Senior Director Karen Krop said Illinois’ problem has gotten worse over the years with delayed payments, pension holidays, and even statutory ramps from the era of former Gov. Jim Edgar.

The recent income tax increase on individuals and corporations, bringing in an estimated $5 billion more a year to the state’s coffers, doesn’t seem to help the state’s massive liabilities, especially with other necessary spending, she said.

Lawmakers “did not over solve the budget in terms of bringing spending below the projected revenues,” Krop said.

This summer, over the governor’s veto, lawmakers imposed a $36 billion budget that spends every bit of the estimated $5 billion tax increase. Rauner’s office said the budget is already $1.7 billion out of balance.

“Pensions have been a rising demand on budgets but in most states, pensions are a much lower demand on budgets than other rising areas of demand, such as Medicaid and education in some places,” Offerman said.

Illinois also has to battle growing Medicaid costs along with the massive pension debt.

“For the last several years the [pension] increases did grow faster, and I would say do crowd out other spending that might have otherwise taken up organic revenue growth,” Krop said.

State Sen. Dan McConchie, R-Hawthorn Woods, said people are already fleeing Illinois because of its high tax burden.

“Whether it’s through their property taxes or because of the recent income tax increase, they just can’t afford to [stay here],” McConchie said. “This day of reckoning is fast approaching us. I don’t think we want to wait until the absolute last minute to try and do everything we can to really right the ship.”

Recent IRS data indicates that Illinois lost more than 40,000 wage earners on net in the 2015 tax year, following a trend of net losses year after year.

McConchie said the health of the state’s pension funds relies on policy makers who have a history of kicking the can down the road making pensioners nervous.

“And this is why certainly we need to have a safety net, but at the same time we definitely need to have the ability for people to control their own future and to control their own retirement,” McConchie said.

The solution is to move employees from politician-controlled defined benefits to to employee-controlled 401k style plans, he added.

Earlier this week, Moody’s Investor Services announced it is considering weighing pension debt more heavily when it evaluates a state’s credit worthiness. Such a move could make Illinois the first state whose bonds fall to junk status.

Source: Will County News

Futures offerings legitimizes Bitcoin, will increase digital currency’s value

Analyst: Futures offerings legitimizes Bitcoin, will increase digital currency’s value

FILE - Bitcoin, cryptocurrency
Shutterstock photo

ILLINOIS NEWS NETWORK

With the Chicago Board Options Exchange offering bitcoin futures since last Sunday and the Chicago Mercantile Exchange set to offer futures this Sunday, one analyst says it’s just the beginning for digital currencies.

Bitcoin is an open-source digital currency that uses digital ledger technology called the blockchain, a single line of code where every transaction is transparent, yet highly encrypted and secure. Bitcoin is decentralized, which means it’s not controlled by a central bank like the U.S. dollar is controlled by the Federal Reserve.

The transactions are facilitated using peer-to-peer technology through the internet, where high-powered computers answer a complex mathematical equation to approve individual transactions.

High powered computers are also used to “mine” bitcoin as part of the process. There will only ever be 21 million bitcoins available. As of Dec. 12, there are about 16.7 million bitcoin in circulation.

Bitcoin has been around since 2009. It was worth a penny per coin in May 2010. By the first quarter of 2011, it had gone up to $1. By mid 2014 it was up to more than $600 per bitcoin. Just this month, bitcoin has gone from $13,000 to a peak of more than $19,000 per unit. As of Thursday afternoon, bitcoin was trading for just under $17,000.

The CBOE were first to offer bitcoin futures last Sunday. Futures are agreements to buy or sell something in the future at a set price, but futures aren’t purchasing actual bitcoins.

CME said in an email that offering bitcoin futures on a regulated exchange provides the market with greater transparency and price discovery.

LDJ Capital CEO David Drake has been watching bitcoin since its inception in 2009 and said the lesson over the past six days is bitcoin is not a gimmick.

“I’m expecting when the CME comes in and starts trading we’ll see more value and more justification that this is a new crypto asset class,” Drake said. “I think now Wall Street can come in and buy the futures. I think more and more hedge funds are going to be entering this space.”

With the exponential growth of bitcoin’s value over the past eight years, there are concerns that it is a scam, a fraud or a bubble. Drake said it’s here to stay.

“I don’t think we’ve even started,” Drake said. “I think this is a nascent beginning of a brand new asset class.”

Drake expects the value of bitcoin and other so-called crypto currencies to increase, thanks to the futures providing legitimacy. He even estimates it will be up to $20,000 per bitcoin by the end of the year.

There are anecdotes of people getting a second mortgage to purchase bitcoin futures. Drake said that’s not smart.

“You shouldn’t allocate more than 5 to 10 percent of your net worth into it, even that is high,” Drake said. “I think you should just get your feet wet and learn about it and feel comfortable with what you’re doing.”

CME said it’s incorporating several risk management tools for its offering set for this Sunday, like putting limits of a certain quantity that can be traded to ensure the market operates efficiently.

To purchase futures, CME said participants “need to work through a futures commission merchant to access the futures market. They also need to post initial margin and meet a number of requirements to participate.”

To purchase bitcoin, investors must set up a digital wallet or go through a broker like Coinbase. For added security, you can store bitcoin in a so-called cold wallet offline on a thumb drive. More information can be found at bitcoin’s official open-source website Bitcoin.org.

Drake recommends doing as much research as possible before investing.

Source: Will County News

Homer 33C Hadley Middle School students join effort to save Ross School Raise $500 to restore one-room schoolhouse

News Release

Homer CCSD 33C

Goodings Grove   Luther J. Schilling   William E. Young   William J. Butler

Hadley Middle   Homer Jr. High

Contact: Charla Brautigam, Communications/Public Relations Manager

cbrautigam@homerschools.org | 708-226-7628

 

For Immediate Release:

Dec. 21, 2017

 

Hadley Middle School students join effort to save Ross School

Raise $500 to restore one-room schoolhouse

 

Hadley Middle School students may be focused on their futures, but they also value the past.

 

On Nov. 28, members of the Hadley Middle School Student Council presented $500 to Homer CCSD 33C to help restore Ross School, the one-room schoolhouse on Bell Road.

“As 21st century learners, it makes sense that we are focused on our futures,” they told the Board of Education. “But a focus on the future does not mean that we cannot appreciate what has come before us.”

 

The Student Council began raising awareness about Ross School in the fall, posting informational flyers around Hadley Middle School and encouraging students and staff to donate.

Assisting in the efforts were members of a sixth grade ELA class who researched one-room schoolhouses and created an informational display for the school’s Family Reading Night in October.

 

The student exhibit included facts about Ross School, the experience of learning in a one-room school house and family life in the 1850s.

 

“Ross School stands as an important symbol of learning and how learning has evolved in this area,” students explained. “It is our hope that as exciting as the future is, as a learning community we will always appreciate history and the important lessons we learned in history.”

 

Also helping to preserve Ross School are several local businesses, including Old Plank Trail Community Bank, which donated $500; Midland Federal Savings Bank, which donated $100; and Big R, which donated $250 in gift cards.

 

BI Rental waived the rental fee for a roof nailer and compressor, which volunteers used to install a new roof with materials donated by Filotto Construction and Richards Building Supply Company.

 

The school still needs a lot of work, however, including two new doors, 392-square-feet of cedar dutch lap siding, window repairs and corner trim.

 

If you would like to join the effort to Save Ross School, please contact Homer 33C Communications/Public Relations Manager Charla Brautigam at 708-226-7628.

 

 

 

Like us on Facebook at https://www.facebook.com/homer33c?fref=ts&ref=br_tf

Source: Will County News

Springfield fiddles while Illinois cities burn

Op-Ed: Springfield fiddles while Illinois cities burn

Danville store closing
A store in Danville, Illinois, closing after 120 years in business. (Daniel Schwen | Wikimedia via Creative Commons)

The City of Danville’s struggles aren’t all that different from those of downstate communities across Illinois. Danville has seen its population drop by more than 20 percent from its peak last century. Residents’ earnings, adjusted for inflation, have fallen by more than 9 percent since the year 2000.

And manufacturing, once a staple of the community, has declined significantly. Gone are the General Electric, General Motors and Hyster factories and the 7,000 manufacturing jobs they provided.

But unlike so many other unfortunate downstate communities, Danville has found a way to persevere. It has diversified its economy and fought to attract new development.

Today, the city is host to many smaller industrial companies that alone provide 5,200 jobs. And companies like WatchFire, a maker of LED electronic signs and billboards, provide a solid jobs base for the city.

Those changes have been necessary to keep people and businesses from moving right next door. Danville is just three miles away from the Indiana border, where sales and property taxes are much lower and where the state is friendlier to businesses.

But Danville’s ability to stay competitive is in jeopardy. Decades of state mandates created by politicians in Springfield have pushed up costs, taxes and debts in the city to unsustainable levels.

And those state mandates have negative effects far beyond Danville. They overwhelmingly favor local bureaucracies over residents. They give some government unions the power to strike and others the benefit of binding arbitration laws. They enforce expensive prevailing wages that drive up the cost of public works and infrastructure improvements.

And most of all, they offer government worker retirement benefits that are no longer affordable to the residents that pay for them.

Cities simply have no power to control the costs that Springfield piles on.

The situation deeply frustrates Danville mayor Scott Eisenhauer: “Springfield makes the rules but localities have to pay for them.”

The budget cuts he’s had to make over the years to manage mandates have negatively affected Danville: “It has really started to impact simple capital purchases. It has impacted our staffing levels to pay the pensions. All those cuts hurt everything.”

Mayor Eisenhauer is far from the only local official that’s had to make hard choices. The General Assembly’s failures have put city officials across the state between a rock and hard place.

Many cities are facing ruin, no matter what their choices have been. They’re either at the brink of bankruptcy through unfunded pensions or have lost people and businesses due to high taxes and fewer services. The most unfortunate cities are suffering both.

Source: Will County News

Illinois officials react to FCC’s net neutrality vote

Illinois officials react to FCC’s net neutrality vote

FILE - Net Neutrality
Demonstrators rally in support of net neutrality outside a Verizon store in New York on December 7, 2017.

Mary Altaffer | The Herald Journal

ILLINOIS NEWS NETWORK

While Illinois Attorney General Lisa Madigan promises an appeal, an Illinois U.S. representative says lifting federal net neutrality rules will hold internet service providers accountable by fostering more competition.

The FCC voted to repeal net neutrality regulations Thursday 3 to 2. Madigan and other state AGs followed up with a promise to appeal. She said the move “undermines the public interest by putting our free and open internet at risk.”

Thursday’s vote, Madigan’s office said in a statement, means “internet service providers will be allowed to interfere with customers’ use of the internet by blocking or slowing down access to content. Providers will now be able to favor their own content over third-party sites by slowing down access, or charging content providers for priority treatment or access to an internet ‘fast lane.’”

U.S. Rep. Rodney Davis, R-Taylorville, said under the current standards, his constituents in rural areas already have problems.

“I get calls from constituents who are supposed to be served by the lone broadband provider in rural areas that are actually subsidized by the federal government and the texts I get from my friends down there are, ‘They’re supposed provide us at this speed, but they don’t,’” Davis said.

For those complaining about a lack of ISP competition, Davis said talk to local officials.

“You should stand up to to your local officials and demand more choices,” Davis said. “That is what will get you better service, better speed, more options and cheaper prices.”

He argued that’s where the real battle for more choice should take place, not the federal government.

Some consumers may worry that the new policy would result in fewer choices. Davis said it’s the opposite.

“You’re going to continue to see growth, better access, better speeds, more competition,” he said.

Before the FCC’s order can be entered officially to the Federal Register, the language of the measure must pass through several federal agencies to test for transparency and other requirements.

Source: Will County News