by Anna Manning
JLF’s Roy Cordato’s research featured in a Truth In Accounting article on teacher pensions in Illinois:
The TRS states that it uses net, not gross payments, subtracting taxes from gross payments to active and retired teachers “to be more conservative.” But there is a bigger reason to be more conservative, if not more accurate.
Where did the money paid to teachers in salaries and benefits come from?
Consider the argument in an article by Ray Cordato at the John Locke Foundation titled “Economic Impact Studies: The Missing Ingredient is Economics.” Cordato identifies a key flaw in many of these studies: they don’t account for opportunity cost, one of the most fundamental concepts of economics:
Every dollar that is spent as these “impacts” occur and every resource that is used, including labor, has an unseen opportunity cost. … What economic activities would have occurred if that money remained in the hands of the taxpayer?
The State of Illinois and the City of Chicago are fiscal disasters. The prospects for government services and future tax policy changes are driving significant outmigration. Claims that TRS or other pension plans “boost” the economy deserve close scrutiny — and skepticism.
You can find the full article here.