Another know-it-all
Thursday, Aug 28, 2025 - Posted by Rich Miller
* Sun-Times…
Sounding like he’s testing the waters for a 2027 mayoral campaign, U.S. Rep. Mike Quigley said Wednesday it’s time for Chicago to make the “drastic changes” needed to solve its myriad financial crises without “socking it” to taxpayers. […]
Quigley said the next mayor of Chicago will have no choice but to try again to reason with organized labor because the “talk of a constitutional convention is still a couple years off.”
“You’ve got to take another swing at it one way, legally or not,” Quigley said. “The most effective approach is to show the public the reality of the situation and, hopefully, they can help convince our labor partners that, ‘We’re behind you, but this can’t work the way it is. What’s Plan B for them?’” […]
Quigley said he’ll decide whether to enter the mayor’s race after he sees how the public responds to his tough-love message about what’s needed to solve the intransigent problems of a city that he views as “12 years past” the crossroads. He compared the city’s government to an antique car that can no longer be rebuilt and needs to be replaced.
“Legally or not”? That ain’t gonna work.
* Rahm Emanuel cut a deal with organized labor on pensions, but the Illinois Supreme Court completely knocked it down. Analysis from the Civic Federation…
The high court rejected the City’s first argument that the reforms are a net benefit, citing its previous rulings in the Kanerva case dealing with retired state employee healthcare benefits as well as other court rulings. Because members of the funds are already guaranteed their full benefits under the pension protection clause and because legislative pension funding choices are outside the protections of the constitutional pension guarantee, the court rejected the “notion that the promise of solvency can be ‘netted’ against the unconstitutional diminishment of benefits.” The court went on to say that the “fundamental principle here is that determination must be made, if at all, according to contract principles by mutual assent of the members, and not by legislative dictates.”
On the City’s second argument that the reforms were the result of negotiations agreed to between representatives of the City and its labor partners, the high court also rejected that argument and agreed with the circuit court’s ruling, stating in its opinion that “the members of the Funds did not bargain away their constitutional rights in the process.” This is because “the unions were not acting as authorized agents within a collective bargaining process.”
Finally, the City has also argued that it is not legally required to fund the benefits of retirees if the funds become insolvent and thus the funding provisions of the pension reform laws are another benefit conveyed to members. However, the high court provided clarity on that matter by stating that members of the Funds are entitled to receive the benefits they were promised and “not merely to receive whatever happens to remain in the Funds.” How the courts could enforce funding if any of the pension funds were to go insolvent is unclear.
Pension benefits are constitutionally protected individual rights. They can’t be collectively negotiated away. Also, the city had to cough up refunds after that “not legal” ruling came down.
* However, the Supremes also said this…
As we explained in Heaton, the pension protection clause was not intended to prohibit the legislature from providing “additional benefits” and requiring additional employee contributions or other consideration in exchange.
Likewise, nothing prohibits an employee from knowingly and voluntarily agreeing to modify pension benefits from an employer in exchange for valid consideration from the employer.
In other words, if the city and the unions can come up with a scheme which allows workers to agree to individually opt-in to some sort of plan to reduce the pension debt, then that’s allowed.
This will only net you incremental change, however.
* The state has a pension buy-out program (click here for more) that has knocked a small chunk off its unfunded liability and reduced annual costs since it was approved by the legislature in 2018. From GOMB earlier this year…
Illinois is benefiting from reductions in its pension liabilities from the pension buyout program – so far reducing liability by an estimated $2.5 billion.
• FY25 contribution to SERS is estimated to be $41 million lower and to TRS $130 million lower than it would have been without the program.
OK, what about the borrowing to pay for it? Well, there is a cost, for sure. But the borrowing costs are lower than the 7 percent it costs the state every year for the unrealized gains due to the unfunded liability.
Again, this is a small win, but it’s still a win. Maybe some Chicago geniuses can come up with an even better idea.
* Also, the last time Illinoisans voted on a constitutional convention (which I supported), it lost 67-32. If you’re pushing a convention to cut pension benefits, I’m guessing you ain’t gonna win.
- Dan Johnson - Thursday, Aug 28, 25 @ 9:14 am:
We should probably put all pension funds in passive index funds to save on costs. And we should probably tax pension income and distribute those resources back to state and local pension funds. I think it’s $2B or so in annual revenue lost from not taxing pension income. Just takes a statutory change and if all the money went back to pension funds to help with solvency, maybe some of organized labor would support it.
- Steve - Thursday, Aug 28, 25 @ 9:23 am:
Mike Quigley wants financial changes.That’s fine but the votes aren’t there for changes. If pension funds can’t pay benefits promised then the options are:
1)Higher taxes
2)Bailout from the state
3)Bailout from the federal government
4)Cuts in other programs to pay for promised benefits
5)Check is in the mail: like when Walgreens didn’t get paid on time a few years back on Medicaid.
- Steve - Thursday, Aug 28, 25 @ 9:26 am:
-And we should probably tax pension income-
This would pass constitutional muster. Nothing in the Illinois state constitution prevents it. Many other states do tax pension income.
- SWSider - Thursday, Aug 28, 25 @ 9:30 am:
==“The most effective approach is to show the public the reality of the situation and, hopefully, they can help convince our labor partners that, ‘We’re behind you, but this can’t work the way it is.==
There are BVRs everywhere for those with eyes to see.
- Chicagonk - Thursday, Aug 28, 25 @ 9:34 am:
The way out of the pension crisis is to either cut services or raise taxes. Illinois and Chicago have the ability to do either.
- Three Dimensional Checkers - Thursday, Aug 28, 25 @ 9:34 am:
I’d suggest a “hold it in” strategy for Congressman Quigley. Even a con-con is going to get what he wants because of the U.S. constitution’s contracts clause.
- JS Mill - Thursday, Aug 28, 25 @ 9:36 am:
=We should probably put all pension funds in passive index funds to save on costs.=
Are you in the state pension system?
=we should probably tax pension income=
I used to agree with that, but I am only a few years from my pension so now I disagree. Kidding. I am only a few years away, but we should tax pension income like regular income. Same with Social Security.
But Quigley isn’t going to get much response except for the “reform ” the pension crowd who really just want to eliminate pensions.
This is another recycled issue that has actually been resolved except bringing Tier 2 into compliance with safe harbor (which is really a fairly easy fix). Every year Tier 2 save more and more money for the state. The legacy debt is the real cost and that one isn’t going anywhere.
- Homebody - Thursday, Aug 28, 25 @ 9:37 am:
Even if you make a deal with specific unions, all it takes is one employee to sue.
- RNUG - Thursday, Aug 28, 25 @ 9:40 am:
== probably tax pension income … ==
One of the few benefits for retirees living in Illinois is that retirement income is not taxed. The other benefit, for most of the state, is relatively low housing costs … although property taxes are relatively high.
Retirees already moved out of state for better climate. Start taxing it and watch the retirees move out, taking that potential revenue (and their other spending) with them.
While you can never know for sure, I seriously doubt taxing some or all retirement income will be a big revenue generator.
- RNUG - Thursday, Aug 28, 25 @ 9:42 am:
== Many other states do tax pension income. ==
Yes, and those states have better climates and social / cultural attractions.
- Been There - Thursday, Aug 28, 25 @ 9:51 am:
Bill Daley would have probably become mayor instead of Lori if he would have kept his mouth shut about pensions before the election. As soon as he started talking like Quigley is now he was doomed. A lot of those voters ended up with Jerry Joyce because of his stance.
- TheInvisibleMan - Thursday, Aug 28, 25 @ 9:55 am:
“Start taxing it and watch the retirees move out”
I always hear this retort, but have never seen any data that supports it would actually happen.
Lets say you are retired and getting a pension. Lets be generous and assume that you are getting a 100k/yr pension.
Taxing that at the current flat rate, would be $4950 in taxes paid per year.
I certainly wouldn’t uproot myself and move to another state for less than 5k supposed benefit per year.
Moving isn’t a fun process. Moving when you are elderly is even less fun.
I’m sure some people would move, but I have yet to see any data that shows it would be a statistically significant amount which would impact state revenue negatively. I wouldn’t be surprised if the data shows a far more significant factor in where people move in retirement is the availability of health care. Nobody in retirement making rational decisions is going to move from DuPage county to rural Tennessee to save on state taxes while leaving behind the access to medical facilities in DuPage.
- jimbo - Thursday, Aug 28, 25 @ 10:01 am:
==Start taxing it and watch the retirees move out, taking that potential revenue (and their other spending) with them==
I think I’d be willing to make that trade. I don’t have the data, but at least around me it’s all snowbirds. I’d be fine with them moving to FL and opening up the housing stock to a family that is here and spending year round.
- Huh? - Thursday, Aug 28, 25 @ 10:01 am:
-And we should probably tax pension income-
So you are in favor of reducing the fixed income of senior citizens who are already having a difficult time with the economy.
Got it.
No.
- City Zen - Thursday, Aug 28, 25 @ 10:02 am:
According to the latest TRS CAFR, the normal cost (which doesn’t include debt) of a Tier 1 TRS pension is 15.5% of payroll. That’s nearly double what it was right before Tier 2 was implemented.
We have a system where the the actual cost of retirement benefits keeps increasing but remains totally dtached from the compensation of today, the only place it’s legal to do anything about it. This won’t change until the local districts have more pension skin in the game.
- Leatherneck - Thursday, Aug 28, 25 @ 10:14 am:
=Sounding like he’s testing the waters for a 2027 mayoral campaign, U.S. Rep. Mike Quigley=
If he’s “testing the waters” for Mayor, maybe Rep. Quigley should decide soon whether or not to run for another congressional term.
- May soon be required - Thursday, Aug 28, 25 @ 10:21 am:
==the normal cost of a Tier 1 TRS pension is 15.5% of payroll==
I think this is a Tier 1 population issue. The remaining Tier 1 employees have more service and are older and closer to retirement, therefore the normal cost of their year of service is a lot higher.
- City Zen - Thursday, Aug 28, 25 @ 10:36 am:
==we should tax pension income like regular income. Same with Social Security.==
Unlike my 401k (and your pension), I already paid taxes on my social security wages. Why should I pay twice?
I find it comical that the pension crowd gets upset with the thought of social security being tax exempt. You already won by not having to participate.
- JS Mill - Thursday, Aug 28, 25 @ 10:45 am:
=I think this is a Tier 1 population issue.=
Precisely.
= This won’t change until the local districts have more pension skin in the game.=
The “local districts” you so blithely refer to are not just superintendents, they are all kinds of people working very hard with an enormous amou nt of skin in the game. All kinds of skin, more than just financial. The state has almost no skin in Tier 2. Most districts pay the full pension payment for the teacher (on behalf) and the district portion. Lots of skin.
All of these decisions are made for us, in terms of what we must pay and minimum salaries. Teacher and admin salaries still lag behind industries that require similar education, training, and responsibility.
The benefits were what made the jobs attractive. And, for Tier 1 they are great.
And, as I have stated many many times, you could eliminate the annual pension payment costs and you would still have a massive debt payment to deal with. That cost over shadows the annual cost and it has to be paid. “Local Districts” were making their required payment for the 100 years or so that the legislatures and governors was not making their payments.
Plenty of skin in the game.
- Shytown - Thursday, Aug 28, 25 @ 10:57 am:
Can he go away please?
- Steve - Thursday, Aug 28, 25 @ 10:59 am:
-Taxing that at the current flat rate, would be $4950 in taxes paid per year.-
That’s a lot of money. That’s over $400 a month. That’s a lot for retired folks.
- Amalia - Thursday, Aug 28, 25 @ 11:00 am:
blabbing comments can come back to haunt, but he’s exploring now. Quigley is in the cut spending, raise fees lane and I like that.
- City Zen - Thursday, Aug 28, 25 @ 11:08 am:
==Moving isn’t a fun process. Moving when you are elderly is even less fun.==
You’re old and trapped isn’t exactly a winning message.
This always seems to be the argument in any tax discussion. The “I’m gonna keep raising your taxes” because you’re locked into a low rate, kids in school, family nearby, tied to job, physically unable, etc. Just a sinister vibe.
“Where else you gonna go?” is a morally vacant argument. And I say this as someone who thinks we should tax retirement income. Maybe we can think of a better framing.
- TheInvisibleMan - Thursday, Aug 28, 25 @ 11:10 am:
“That’s a lot of money. That’s over $400 a month. That’s a lot for retired folks.”
How much does it cost to not have accessible health care nearby? I don’t know if you’ve noticed the ambulance fees lately, even for non-emergency transport. But $400 wouldn’t cover a single trip. Adding a larger distance to access good healthcare could easily erase any supposed tax savings with just a single trip per year. Because that’s what happens when you get older, no matter where you live.
Not everyone is laser focused on dollars above all else. Some people are certainly stuck in that mindset, and that’s fine for them.
But not a single retiree I know would move *farther* away from the easy health care access they have now to ’save’ $400/mo. That $400 isn’t just money - it’s used to buy things. Like convenience and piece of mind when the inevitable realities of aging arrive.
- Give us Barabbas - Thursday, Aug 28, 25 @ 11:15 am:
I’m deeply concerned about the recent fifth circuit attack on an already crippled national labor relations board. I think Illinois has to sprint to duplicating NLRB protections at the state level to ensure unionization votes can’t be suppressed.