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* AP…
A bill that supporters say gives Chicago some “breathing room” in making payments to its police and fire pension funds has advanced in the Illinois legislature.
The Illinois House and a Senate committee approved legislation Saturday to reduce Chicago’s annual mandatory payment for the next five years. The bill now goes to the Senate floor.
Chicago’s payments to the two funds were set to jump from about $300 million this year to roughly $840 million next year. The legislation sets the 2016 payment at about $620 million.
* Tribune…
House Republicans opposed the measure, saying putting off pension payments helped create the funding problem in the first place. They questioned the wisdom of relying on money from a Chicago casino that has yet to be approved by lawmakers and is unlikely to pass before lawmakers adjourn on Sunday.
“Talk about putting the cart before the horse,” said Rep. Ron Sandack, R-Downers Grove. “This is not a panacea, it’s actually a step backwards.”
* Reuters…
House Republicans chastised the bill for letting Chicago off the hook for the larger payments the city has been aware of for years and for promising benefits to its workers it could not afford.
* ABC 7…
“So instead of a $600 million increase, we’re talking about a $200 million, $225 million dollar increase,” said state Rep. Barbara Flynn Currie, D-Hyde Park. “That is sustainable, that is palatable.”
The measure, opposed by most Republicans, also says any city revenue from a yet-to-be-approved Chicago casino must be applied to pension payments. It now goes to the Senate, where one Republican called it another example of Chicago kicking the police and fire pension can down the road.
“They need to start facing this problem,” said State Sen. Matt Murphy, R-Palatine. “They can’t continue to put it off. They’re going to really hurt their police and fireman one day.”
* Another topic mentioned over and over during yesterday’s debate was Chicago’s low property tax rate for homeowners. Several Republicans said the city needed to face up to that fact.
I don’t disagree at all.
However, when Cook County’s pension reform bill was debated last year, Republicans said they couldn’t vote for it because it would lead directly to a property tax hike.
* The reality is that the governor doesn’t want to give Chicago anything until he gets his Turnaround Agenda passed. It’s just another Rauner brick on the road.
posted by Rich Miller
Sunday, May 31, 15 @ 11:40 am
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Reduced pension payments are better than a total holiday.
Comment by Mama Sunday, May 31, 15 @ 11:43 am
It’s not even really that reduced considering the payments are still going up by 100% instead of 200%. As long as the inflows exceed the outflows it’ll be fine, just takes longer to get to a healthy percentage of funding.
Comment by PMcP Sunday, May 31, 15 @ 11:46 am
Its a start. It will give them an opportunity to get a handle on it. They can choose to grab the handle and turn the ship around or use it to dig themselves a deeper hole. Time will tell.
Comment by Beatgrunt Sunday, May 31, 15 @ 12:01 pm
=== “They need to start facing this problem. They can’t continue to put it off. They’re going to really hurt their police and fireman one day.” ===
I hope Sen. Murphy and the other Republicans remember this principle if and when Gov. Rauner tries to shortchange the state pensions.
Comment by nona Sunday, May 31, 15 @ 12:38 pm
Chicago needs to deal with the problem NOW.
It very clear that none of the current group can solve this problem so they delay it. They have run out of things to sell and no one wants buy them. A new small tax increase does fix this.
Unless the player change quickly Banktuctcy is the only solution.
Comment by cannon649 Sunday, May 31, 15 @ 12:50 pm
What PMcP said. The question is how will the rating agencies react.
Comment by Norseman Sunday, May 31, 15 @ 1:10 pm
Better than nothing …
Comment by RNUG Sunday, May 31, 15 @ 1:19 pm
Darn right, RNUG. Doubling the payment in one year is real progress.
Comment by Arthur Andersen Sunday, May 31, 15 @ 1:40 pm
-AA-, yes it is … and probably the best that could have been hoped for given the overall situation, but still a long way from where it needs to be.
Comment by RNUG Sunday, May 31, 15 @ 1:54 pm
===The question is how will the rating agencies react.===
Only time will tell but I think that it will probably be seen as a negative by the rating agencies. The rating agencies probably would have a more positive reaction to a property tax increase seeing how low the current property tax rate is in the city.
===Reduced pension payments are better than a total holiday.===
True, but would not an increase in pension payments be even better?
Comment by Hit or Miss Sunday, May 31, 15 @ 2:09 pm
The ratings agencies will react positively when the city raises long term revenues to a level adequate to pay their bills. It’s as simple as that.
Comment by PublicServant Sunday, May 31, 15 @ 2:55 pm
I wonder if any other municipality would get such treatment. My guess is there would be a lot more complaining here and from unions if such a measure had wider scope. Just sayin’.
Comment by Shemp Sunday, May 31, 15 @ 9:01 pm
Come on Rich Daley had one year before mayor Rahm and he had 4 years, and you mean they couldn’t even put 10 million towards it
Comment by Big City Sunday, May 31, 15 @ 10:20 pm