Ask Terry Questions Chicago Pension Reform

Chicago Pension Reform

By Terry Savage on June 04, 2014 | Taxes & Economy

Dear Terry, as you may know Gov. Quinn has until 6/9 to sign pension reform for part of Chicago’s employees and retirees. Do you think this will then be part of the stay or injunction that is currently in progress for the state employees?

Terry Says:  I find it very difficult to figure out the politics of the situation.  But Gov. Quinn has until next Monday to decide whether to sign, veto outright or amendatorily veto legislation that increases employee contributions by 29 percent and reduces employee benefits to save the Municipal Employees and Laborers pension funds.  If he does nothing, the bill will automatically take effect, according to news reports.  So the bill, which would increase property taxes over the next 5 years, AND increase employee contributions by about 29 percent, is likely to become law in any case.

And that’s not the worst of the problem.  This covers some city employees (61,000) — but not the police and fire pensions!  I wrote about this six years ago, and people called me a scaremonger.  So now we face the music and decide which is worse:  defaulting on a portion of the pension promises (lawsuits would take years) or raise taxes and drive homeowners out of the city!

 

 

 

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