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 A rejected House bill that would have extended new pension
perks to select Chicago aldermen could see another day.
State lawmakers will reconvene Nov. 13 for veto session, during which they will
have the opportunity to override Gov. Bruce Rauner’s veto on any bill from the
regular session.
One of those bills will be House Bill 5342, a proposal sponsored by state Rep.
Robert Martwick, D-Chicago, that would provide an exclusive pension boost to
Chicago aldermen who formerly worked for the Chicago Fire Department. The bill
would amend the Illinois Pension Code by redefining “active fireman” under the
Chicago Firefighter Article to include former firemen currently serving on the
Chicago City Council.
The bill would apply to any alderman with a history of fire department work who
has served on City Council for at least five years, regardless of how long they
were firefighters. Under HB 5342, applying council members would have the option
to forgo their municipal pension plan and instead transfer their aldermanic
pension credits to the city’s fire pension system. Rauner vetoed HB 5342 in
August.
The fire pension system delivers more lucrative retirement benefits than the
municipal fund. Those who stand to lose are firefighters whose retirement
security is jeopardized by a severely indebted pension system, and taxpayers on
the hook to cover those deficiencies.
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As of fiscal year 2017, Chicago’s fire pension fund
had less than 21 cents on hand for every dollar owed in benefits. In
September, the Firemen’s Annuity and Benefit Fund of Chicago filed
two claims with the Illinois comptroller for a combined $3.3 million
shortage, alleging the city shorted it by $1.8 million in 2016 and
by $1.5 million in 2017.
All told, Chicago’s combined pension debt stands at $42 billion.
Outgoing Mayor Rahm Emanuel’s solutions to the
city’s pension crisis have largely consisted of massive multiyear
tax hikes, including a property tax increase of $543 million, new
taxes on ridesharing and e-cigarettes, tax increases on water and
sewer services and 911 calls, and hikes in fees ranging from garbage
collection to building permits. But those revenue increases have
failed to tame the city’s pension debt. Moreover, the city’s
required pension contributions are projected to more than double
during the next decade.
The reforms needed to rein in growing pension costs must come
ultimately from state lawmakers, beginning with a constitutional
amendment, and ending with an affordable 401(k)-style alternative.
Any efforts aimed at encouraging participation in – and increasing
the cost of – unsustainable defined-benefit pensions systems would
be a step in the wrong direction.
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