No One Is Happy With Emanuel's Pension Plan
By Chuck Sudo in News on Sep 27, 2013 8:40PM
Photo credit: Vaughnchicago
The bill introduced at the end of the spring legislative session by Illinois Senate President John Cullerton (with Emanuel’s backing) calls for postponing the balloon payment to Chicago’s Police and Firefighters’ pension funds to 2022 and implementing a series of annual property tax increases starting in 2018. Emanuel is also working to change a 2010 state law requiring the city to make a $600 million payment to the underfunded police and firefighters’ pensions in 2015. During a trip to Springfield last year to lobby for pension reform, Emanuel called the law “mindless, reckless and irresponsible.” He told the Tribune Wednesday his plan requires “reform, revenue and time” but critics charge it’s more of the same “kicking the can down the road” solution to the problem.
Both Civic Federation President Laurence Msall and Fraternal Order of Police Chicago President Mike Shields told the Sun-Times the Emanuel proposal is unappetizing at a time when state lawmakers have yet to reach an agreement on reforming Illinois’ underfunded pensions. Shields went so far as to say the bill would fail if Cullerton and Emanuel move forward with it because the police and firefighters’ unions would work to kill it.
“I don’t think there is much of an appetite by the Illinois Legislature to grant Mayor Emanuel a pension holiday when the pension funds are so poorly funded. If the S&P 500 catches a cold, the police pension fund will catch pneumonia,” Shields said.
“Time is not on our side. We cannot ignore what the actuaries are telling the city about the necessity for more money into these funds. The answer is to follow the law, beginning in 2015, and change the actuarially required contribution which pays the true cost to operate a pension fund.”
Shields said the FOP backed a bill introduced during the spring session that would divert a portion of potential future casino revenues in Chicago to shore up the pension funds, proving that Shields is looking at a Chicago casino as the same handful of magic beans as Emanuel, who's touted theoretical Chicago casino revenues to fund everything from infrastructure projects to improving public schools.
Msall told the Sun-Times delaying the balloon payment is not an option. “The city’s pension funds are dangerously close to a point where they may not be able to be saved. There’s going to have to be shared sacrifice with employees paying more and receiving less, and taxpayers paying more and receiving less service. Anything short of that will not save these funds without destroying Chicago’s economic base.”
But labor leaders such as Chicago Federation of Labor President Jorge Ramirez are optimistic that at least Emanuel is at least talking numbers. “It’s the first time I hear them saying, ‘You’re right,’ ” said Ramirez, who’s also pushing for a portion of Chicago casino revenues to be set aside to shore up pension funds.