tv The Stream Al Jazeera December 23, 2013 12:30pm-1:01pm EST
al jazeera. i'm richelle carey. the strea"the stream" is next. thank you for watching. go to www.aljazeera.com. >> hi, i'm lisa fletcher, and you're in "the stream." detroit is not alone. chicago's public pensions are short $28 billion and the city that works is in trouble. our digital producer, ra raj is here, and most people are familiar with detroit's crisis, but chicago's is whooshes. >> people have been
streaming:. however, on facebook, we have the flip side: >> yeah, and there's a lot of subtext to this covering. >> it would be easier if michael jordan came today. >> it would be nice, right? a super hero? the city's pension systems for the police and city laborers were sort by $20 billion by the entof 2012. and to put that
in perspective, for every dollar owed. there's only 20 cents in the bank, and that doesn't even include the teachers, which has it's own $8 billion shortfall. so that all adds up to that $28 billion hole that we were talking about. just this month, the state legislature put into law rules that will help to fix it. elaine has been active on the new legislation. and joining us, fred, a retired k-5 art teacher out of chicago. the former president of the district's 54 parkridge association. in our google hang out, tony martin, firefighter and secretary for the firefighter's benefit fund of chicago. and if investigation with the better government's association. weapon to all of you. so representative, earlier
this month, the legislation passed a pension reform bill, but chicago was not included. and give us the highlights of how the state is trying to solve the problem and why chicago is not in the process. >> the state has a $100 million liability that was putting a squeeze on the rest of the budget. so just in the last two years alone, out of our revenue expenditures, the pension had increased $2 billion just in the last years, and we devoted 22 cents of every tax dollar to making our pension payment, while most states in the country are in the 4 to 5-cent range. so we needed a plan to allow us to pay down that debt over the next 30 years, and i think that we have a sound plan now that will allow us to do that. the city of chicago has it's own
pension funds, as you mentioned, and we have a think the sense was that we wanted to come to some conclusion on the state funds before we would turn our attention to the city funds. but i think their payments are increasing dramatically and having a very dramatic squeeze on their ability to provide other current city services >> and also, the state to put a plan in place to help chicago, or can chicago choose to act independently? >> the city's funds are state statutes, so it will require with the legislature. with local pension funds, we have the county-wide reclamation district. and they came with their own plans, and came to us and we passed them. >> so bob, with detroit and other cities, this is not something that happened overnight, but are there key factors that you can point to
that are major contributors to this crisis. >> i think that the biggest factor is that it was a problem that was ignored way too long, and as a result, a lot of the problems piled up. you have the fact that the pension funds were not funded properly for years at a time. and in addition to that, it may not be realistic, and when you put it all together, you have a real problem, and then the backdrop, a weakening and slowing me, and this is one of the reasons that this is such a flashpoint for the general population, they see their paychecks getting small for their bills going up, and they look at public employees, and the pensions that they're supposed to be getting, and they're angry about that. not always justified. but they're definitely angry about it. and you saw that in the state of illinois, where there was an
an reform. >> we have seen that. tony, you're a firefighter in the nation's third largest city, and did chicago make promises to you that you feel they're not going to keep? >> first of all, i would like to address something that i have said. number one, the mayor and the commission came out and said that our benefits are much more generous and we contribute more on average to pay for our benefits. i believe that we can resolve this issue. we have never not been here. our pensions almost went broke from 1837 to 1981. in 1981, we started a new system. the secretary treasurer said that we would be broke in the year 2013. and just like the firemen, we're
still standing. we have big challenges. >> lisa, illinois residents are upset: >> chicago's pension fund is underfunned. but it's not because of its employees of our employees have faithfully paid into the fund for the past 118 years, never missing a payment. but the schools skipped their payments from 1996 to 2005. and then they got a pension
holiday from the illinois legislature of $1.2 billion. and that's why we're in trouble these days. >> fred, i want to bring in the conversation, you are a retired teacher and talk to us. who would you blame for this crisis? >> the state legislature. for the last 60 years, the republicans and democrats have failed to meet their obligation into paying into their share of the pension fund. those of us like myself, who taught for 30 years, we got hired under the understanding that we would pay 9 and a half percent out of our salary into the future retirement system, run by the state of illinois. that we would invest that money and get a return, which they have, and that the legislature would pay their share. the legislature has not paid their share, and they have not paid it for decades.
representative makes it sound as if -- and bob kind of suggested that everyone is to blame. but the employees aren't to blame. the state employees aren't to blame and the teachers are not to blame. what we did, we signed a contract in which we were guaranteed a certain percentage of our sally when we retire. and a 3% cost of living adjustment. representative has decided that the driver for the economic problems in the state of illinois is the retired teacher down in paducha, who might be 70 years old, and gets a pension of less than $40,000 a year, and a cost of living adjustment, which is what their bill took away that it's somehow going to solve the problems of the state. and it's ridiculous. >> hang on, and pause there for a second, fred. and i want to get the representative in here.
you were the first to agree that the problems with illinois, they have had a funding problem for decades, but is it a reasonable representation on the part of illinois residents to expect at some point, over the last 10, 20, or 40 years that someone in the state legislature would have said, hey, guys, we have a problem here. and we need to hold up and fix this before it gets worse. how could this possibly have snowballed for decades? >> it has always been my goal to not fix the blame, but to fix the problem. and the facts are what they are right now, and i agree that the teachers and the state employees and the university employees faithfully paid in, and they didn't have any choice in that matter. and the state didn't make it's required payments and was never required by law to do so. and that's one of the major fixes.
>> representative, is that how it happened? because they weren't required to do it by law? that they sort of shrugged and said, there's a problem, but we're not required to address it by law. >law. i realize that you weren't part of the legislature 10, 20, 30 years ago, but in your estimate t. is that what happened. >> i don't know if it was the pension systems or the leng similarities, or governors, we have never looked to the actual waries to tell us what is required to fund the pension system and how to get there. over the next 30 years, beer on a scheduled plan, with no gains to get us the funding in 30 years. >> representative, you have found someone to blame, because the only ones paying are the employees in the state
retirement system. nobody else is paying other than what they were originally required to pay. it's those of us who were either retired or will be retired who are the only ones paying a price for 60 years of fraud. we had a contract. >> can i respond? >> you violated that contract. >> of the $100 billion that is owed right now, $79 billion is still going to be paid by taxpayers. and that debt is going to have to be paid by taxpayers over the next 30 years. so of the $100 billion, almost $80 billion, we did not touch. and that's going to be required to pay by taxpayers. >> we need to get to break. we're going to get back to the conversation in 2 minutes, i promise. still ahead, the dollar figures that we're talking about are in
a lot of ways too big to wrap your arms around. when we come back, retirees and younger workers caught up in a broken system. (vo) al jazeera america we understand that every news story begins and ends with people. >> the efforts are focused on rescuing stranded residents. (vo) we pursue that story beyond the headline, past the spokesperson, to the streets. >> thousands of riot police deployed across the capitol. (vo) we put all of our global resources behind every story. >> it is a scene of utter devastation. (vo) and follow it no matter where it leads, all the way to you.
al jazeera america. take a new look at news. here is more. >> beneath the fluorescentsun in a former meat packing plant is the latest trim in farming. they call it "vertical farming." these fields grow on floors on at industrial park and farmer john adel and his staff agrees user. >> my shipping proceed did you say 1500, 2,000 miles to get are. >> the plant of the indoor -- as the indoor formers call it doesn't grow corn or soybeans but mustard, high end micro greens on the plates of white-napkin restaurants. these fish supply the vert liser that number issues the
mayor, ron immanuel, says that if the city doesn't change retirement benefits and changes, chins will see a cut in vital services, and do you see a way forward here where everybody gives in a little to mitigate some of the damage. >> you have to understand, the city doesn't have the same problems that are just with the state of illinois. the state of illinois is paying 20 cents on the dollar toward their pension plans, and the city of chicago is paying 5 or 6 cents. we're going to have to pay $300 million more. to suggest that the city doesn't have room in order to pay is ludicrous. i think when we all sit down and work together, we are going to be able to come up with a solution that's fair to everybody involved. but obviously, what's important
to me is upholding article 13, not reducing or diminishing benefits for current employees. there's nothing to take for us. most of us don't have 3%. we have 1 and a half percent for age 60. >> chicago, stockton, san bernardino, and riverside, and san jose and new york, they have some pension problems. but talk about the nation, and what people predict to be a wave of bankruptcies coming. >> they're probably early indicators, because they're all running into the same problem. when we look at it nationally e. from rhode island to california, you're looking at unfunded pensions and the train on budgets, whether it's state or county budgets.
there has to be a way to rationalize the system. i agree with tony, there's a way to find an answer to this. there's a political way to do it, and it can be done. the issue to me, you have to balance it between the cuts, and then the revenue side. and i think the question in illinois that's going to come up next is, what do you do with a temporary state income tax hike that we have? does that become permanent? you have to start addressing the revenue issue as well. and i think that has been part of the discussion that has been somewhat ignored as we focused on cuts and trying to get on the good side. >> bob, i'm going to get to chicago:
>> what would you sigh as a short-term solution to save illinois? >> short and long-term solution on this is very simple. you had a situation in illinois where the richest man in illinois, ken griffin, a friend of the mayor, he's the richest man in illinois, and he pays the exact state interest rate as an associate of wal-mart. >> i want to thank all of our guests, until next time, raj and i will see you online at aljazeera.com/"the stream." with
joy. >> this is al jazeera. >> hello and welcome to the news hour, from al jazeera's news center in dho doha and london these are the top stories. trying to force rebels out of the strategic city. another day of death in aleppo. 45 people have reported to have lost their lives in just one day. >> all the news in europe including, finally
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