Chicago homeowners and businesses would face annual property tax increases to solve the city’s pension crisis — but a balloon payment to shore up police and fire pensions would be put off until 2022 — under legislation backed by Mayor Rahm Emanuel that is drawing fire from all sides.
Fraternal Order of Police President Mike Shields flatly declared that the bill introduced at the close of the spring legislation session by Senate President John Cullerton (D-Chicago) stands no chance of passing because police and fire unions will work to defeat it.
In 2015, the city is required by state law to make a $600 million contribution to stabilize police and fire pension funds that now have assets to cover just 30.5 and 25 percent of their respective liabilities.
The mayor’s City Council floor leader has repeatedly suggested that the General Assembly “relieve us of these artificial dates they’ve put on us and allow us to solve the pension problem over time.” A seven-year “ramp up” was built into a tentative contract with police sergeants but overwhelmingly rejected by the rank-and-file after Shields worked to defeat it.
On Thursday, Shields vowed to torpedo the Cullerton bill that would not only postpone the balloon payment but also give the city until 2061 to get the police and fire pension funds up to a 90 percent funding level.
“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.”
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