* Sun-Times…
With the spotlight focused elsewhere, such as the Mike Madigan saga and the Black Caucus push for criminal justice reform, the Illinois Senate voted Monday to raise retirement benefits for 2,200 Chicago firefighters in a way that would saddle beleaguered city taxpayers with $850 million in added costs by 2055.
The bill already had passed the Illinois House and now awaits Gov. J.B. Pritzker’s signature or veto.
It was introduced by Sen. Robert Martwick, D-Chicago, when Martwick was a state representative. Martwick, a political nemesis of Mayor Lori Lightfoot, has since been appointed to the Illinois Senate to fill the vacancy created by the retirement of state Sen. John Mulroe.
Martwick’s bill removes the “birth date restriction” that prohibits roughly 2,200 active and retired firefighters born after Jan. 1, 1966 from receiving a simple, 3% annual cost of living increase. Instead, they get half that amount, 1.5% — and it is not compounded.
“Mayor Lightfoot believes strongly that we must work toward a comprehensive pension solution which keeps the promises made to retirees and which sets pension funds across the state on a path to solvency,” the mayor’s office said in a statement issued after the vote.
Passing this bill, “effectively under the cover of darkness in a rushed lame duck session, accomplishes neither of these important objectives, but does pass on a massive, unfunded mandate to the taxpayers of Chicago at a time when there are no extra funds to cover this new obligation,” the statement continued. It called the bill “irresponsible” and said it would leave taxpayers “on the hook” for $18 million to $30 million per year, or over $850 million by 2055.
* Martwick’s explanation…
State Senator Rob Martwick (D-Chicago) passed a measure Monday that creates transparency regarding the true conditions of the firefighter pensions system and provides an accurate path for stability.
Under current law, the cost of living for firefighters in every community other than Chicago is set at 3% compounding. Chicago firefighters receive a far lower cost of living adjustment of either 3% simple or 1.5% simple with a 30% total cap, which is the lowest cost of living adjustment in the state. However, while the law suggests that that firefighters who are born after a certain date will receive the lower 1.5% cola amount, in practice that date has been moved forward nearly every 5 years for the last 40 years.
The effect is that every Tier 1 Chicago firefighter ultimately receives a 3% simple cola, but the City’s pension contribution are calculated on the lower amount that is written into law. This knowingly and intentionally underfunds a pension system that is currently only 18% funded, and teetering on the brink of collapse. Continuing to knowingly short the payment for short term relief could force the fund into insolvency, and will make the problem exponentially worse and causing massive tax increases in the near future.
House Bill 2451 removes this outdated language and sets the cost of living adjustment for all Tier 1 Chicago Firefighters at 3% SIMPLE. This remains substantially less than the compounding COLA that their counterparts receive, but is reflective of the actual benefit they will receive in retirement.
“This legislation shines a light on the true financial condition of the fund and prevents the City from knowingly and intentionally kicking the pension can down the road, forcing bigger tax increases in the future,” Martwick said. The only way to truly fix our finances is to first acknowledge the true depth and nature of the problem. Only then can we adequately address it for the good of both our first responders and our taxpayers.”
…Adding… From comments…
Lightfoot could not convince a single Chicago legislator to vote No.
The elected school board bill was moved from 2nd to 3rd today.
Expect more fireworks.
- walker - Tuesday, Jan 12, 21 @ 11:49 am:
“”under cover of darkness “”
for a bill passed by the House and waiting in the Senate to be dealt with when back in Sfield??
- Perrid - Tuesday, Jan 12, 21 @ 11:50 am:
Martwick and Lightfoot are still the best of friends, I see.
- Wow - Tuesday, Jan 12, 21 @ 11:52 am:
Never saw a Mayor so irrelevant to Springfield. Passing major legislation without any input from the 5th floor. And, we have a battle for a New Speaker, NOBODY cares or is asking for the Mayor’s input.
- James the Intolerant - Tuesday, Jan 12, 21 @ 11:57 am:
From the Chicago Fire Department’s website: “Beginning with the calendar year ending December 31, 2021, the City is required to fund the FABF on an actuarial basis sufficient to produce a funding level of 90% by the year ended December 31, 2055″ So the can is finally being kicked down the road. So that part of Martwick’s argument seems incorrect.
- Rocco CPA - Tuesday, Jan 12, 21 @ 11:57 am:
Martwick’s bill is beyond irresponsible. Look at the yield curve today. You don’t get 3% on a 30 Year Bond, but somehow a pension fund is supposed to get a greater return than this ! The people in Illinois have lost their minds. The closing yield yesterday was 1.88 %. Where is the extra rate of return supposed to come from? The tooth fairy? Taxpayers that don’t get pensions?
- 1st Ward - Tuesday, Jan 12, 21 @ 12:03 pm:
The mayor of the city that drives the economic engine and much of the State politic is irrelevant at the State level. If irrelevant at the State level I assume irrelevant at the Federal level as well. The next mayor needs to have better relationships with Chicago’s congressional delegation and Springfield pols to better the city. Lori is the biggest loser politically coming out of the lame-duck.
- Donnie Elgin - Tuesday, Jan 12, 21 @ 12:09 pm:
=90% by the year ended December 31, 2055=
That’s true, in fact, all the state and local pensions have similar clauses. But 2055 is so far away, the ILGA thinks only in terms of the next election.
- Thomas Paine - Tuesday, Jan 12, 21 @ 12:11 pm:
Lightfoot could not convince a single Chicago legislator to vote No.
The elected school board bill was moved from 2nd to 3rd today.
Expect more fireworks.
- Too cute by half - Tuesday, Jan 12, 21 @ 12:19 pm:
I’m definitely a pro-labor guy but if this truly would cost tens of millions of dollars a year, why now? Covid has already reduced the inflow of taxes to government, and people are actually hurting now.
Realistically, we need to ditch the 3% COLA if we’re ever going to dig ourselves out of this hole. The state employees took a massive hit to their pensions when the Nekritz/Biss bill passed, and they continue robbing peter to pay paul.
- Maximus - Tuesday, Jan 12, 21 @ 12:23 pm:
Without a funding mechanism this should not even be considered. Any legislation that needs money should be required to show how the money will be acquired or else the financial hole just keeps getting deeper.
- May soon be required - Tuesday, Jan 12, 21 @ 12:48 pm:
Everyone knows that pension costs are too high, there really is no excuse for increasing benefits unless the state is going to fund the increase cost.
- Shemp - Tuesday, Jan 12, 21 @ 12:52 pm:
It’s real easy for the State electeds to get all the credit for enhancing benefits and repaying donors when they get to pass the entire cost on to a whole different set of electeds.
- Roll Tide - Tuesday, Jan 12, 21 @ 1:00 pm:
Passage of this bill (assuming Governor Pritzker signs it) shows how little influence Mayor Lightfoot has….2023 election gonna be fun.
- Cook County Commoner - Tuesday, Jan 12, 21 @ 1:06 pm:
Check the Illinois Dept of Insurance’s bi-annual report on public sector pensions. Check the total number of folks currently receiving pension payments and those working toward retirement. Multiply by two to include a spouse or significant other with an interest. And there you have probably the most powerful special interest constituency in Illinois armed to the teeth with bulletproof Illinois constitutional protection.
- RNUG - Tuesday, Jan 12, 21 @ 1:29 pm:
== Where is the extra rate of return supposed to come from? ==
Investments they didn’t make because the fund never had the money put it. Doesn’t mean they can’t get decent returns in excess of 3% on what they do have to invest.
Making those kind of returns isn’t that hard. Admittedly, last year was a mostly boom year for the markets. I was just looking at my wife’s portfolio that is very conservatively invested; it still earned almost 8% last year. My more aggressive investments earned a whole lot more. If we can earn that with a bit of professional help, so can the pension funds.
- Moe Berg - Tuesday, Jan 12, 21 @ 1:36 pm:
Lightfoot would lose in a landslide if the election were held today.
Poor relationship with the city council.
Poor relationship with the governor.
Poor relationships with other elected officials at all levels of government.
- Rich Miller - Tuesday, Jan 12, 21 @ 1:41 pm:
===lose in a landslide if the election were held today.===
It ain’t today. It’s in 2+ years.
- Precinct Captain - Tuesday, Jan 12, 21 @ 2:01 pm:
==Passing this bill, “effectively under the cover of darkness in a rushed lame duck session==
Has been in the same form for nearly 2 years.
https://ilga.gov/legislation/billstatus.asp?DocNum=2451&GAID=15&GA=101&DocTypeID=HB&LegID=118459&SessionID=108
Here’s a pro-tip for Lori and reporters, READ THE BILL before saying and printing junk
- Southsider - Tuesday, Jan 12, 21 @ 2:34 pm:
At least one active fire member of the FABF, Timothy McPhillips has opposed these increases…it is not just the mayor. He is active on the web at ourcfd.com. Check him out…can’t be too popular in the firehouse.
- May soon be required - Tuesday, Jan 12, 21 @ 2:40 pm:
When was the last time a bill passed the House in one calendar year and the senate passed it (without any amendment) in a non-consecutive calendar year?
I have no idea, but it seems like that has to be very unusual for a bill to pass the two chambers 21 months apart.
- Rich Miller - Tuesday, Jan 12, 21 @ 2:42 pm:
===When was the last time a bill passed the House in one calendar year and the senate passed it (without any amendment) in a non-consecutive calendar year?===
It happens. What’s truly rare is that the bill’s original House and Senate sponsors are the same person.
- Thomas Paine - Tuesday, Jan 12, 21 @ 2:42 pm:
=== I’m definitely a pro-labor guy ===
No, you’re not.
A pro-labor guy would realize that the only thing Martwick’s legislation does is give firefighters something they were going to get anyway.
Only now, the city needs to make the requried contribution.
- Urbs in Horto - Tuesday, Jan 12, 21 @ 3:30 pm:
More state-imposed burdens for a bankrupt City. More power to a rapacious union. A once-great city in accelerating decline. A sad time.
- Woody - Wednesday, Jan 13, 21 @ 12:19 pm:
I don’t know who gets a 3% compounded COLA. I’m retired under the City’s municipal pension. I’ve NEVER received a compounded COLA. It’s always been a simple 3%.am I missing out on something?