* Click here for some background. WTTW in August…

Chicago has pension problems, and Illinois House Bill 3657 might exacerbate the issue. Gov. JB Pritzker recently signed the bill into law.

Per the bill, the city’s first responders under the Tier 2 pension system will receive better benefits — namely, a big retirement boost. It comes, however, at a steep financial cost to the city. According to a warning from a Wall Street ratings agency, the bill will worsen Chicago’s already fragile fiscal state by adding more than $11 billion to its pension liabilities, deepening the projected 2026 deficit of $1.2 billion, and lead to another credit rating downgrade.

The bill is designed to make sure that Chicago police officers and firefighters earn pension benefits at the same level as downstate first responders. It also ensures that pensions for police officers and firefighters hired after 2010 offer benefits that are in line with Social Security payments earned by private sector employees, as required by federal law.

From Rich: The bill passed both chambers without a single “No” vote.

* Also in August, here’s Crain’s…

When Johnson was asked about the pension bill during a City Hall press conference Tuesday, he said his administration “made it very clear that this legislation would certainly make our situation far more difficult because of the fact that there wasn’t any revenue attached to it,” but stopped short of saying he asked Pritzker to veto the bill.

“He was in a tough position. I understand that,” Johnson said of the governor. “I’m going to continue to work with the governor around ways in which we can generate the revenue to respond to pensions, transportation and education.”

While Johnson has been criticized for not opposing the bill more forcefully in public, his team worked against it in the lead-up to the vote, including his chief financial officer, Jill Jaworski, signing a witness slip opposed to the legislation. When the mayor visited Springfield in late April with a list of “modest” funding requests, his financial team met separately with the bill’s lead sponsor, Sen. Robert Martwick, and other legislators to discuss it.

From Rich: Martwick is one of the mayor’s strongest legislative supporters.

* Days later, Gov. Pritzker was asked about the topic at the Illinois State Fair…

Pritzker: Look, first of all, I stand up for our police. Always have. … And they deserve to have the same rules applied to them as they’re applied to police all over the state of Illinois. And that’s all that this bill did.

Secondly, the mayor never once called me, or as far as I know, any legislators to oppose that bill or to ask for any changes in that bill. And you know, when a municipality that’s affected by some piece of legislation doesn’t speak up about it, opposing it, then how can people know that the mayor opposed it?

And he didn’t until, oh, after it passed. I know that some of the members of his administration have said so. I really don’t know that the mayor himself opposes it. What I know is that we have helped the Chicago Police get fairness in their contract.

From Rich: The mayor never actually said that he called the governor about the bill.

* Fox Chicago yesterday…

[A]n internal memo obtained by Fox 32 Chicago shows that the city’s Chief Financial Officer Jill Jaworski warned Andy Manar, a top official in Pritzker’s office, about the financial ramifications of the bill.

“Through 2055, the bill would increase accrued liabilities by $11.1 billion,” for the city police and fire pension funds, the memo states, going on to say that the bill doesn’t offer any way to pay for the new liabilities, and that the debt would push those accounts below 20% funded, or “technically insolvent.”

The memo was dated July 8. A follow-up email dated July 28 reveals that Manar failed to receive the initial memo.

“My apologies for not getting this to you earlier,” Jaworski says in the email. […]

In a statement, Johnson’s office says the memo: “corroborates what we said all along: that both the legislators and the Governor’s office were aware of our concerns. We raised these concerns both publicly while testifying on the potential impact of this bill and privately. We respect that they saw the issue differently and will work with them moving forward to find the necessary revenue to meet these mandates so that the retirements for Chicago’s first responders are secured.”

* From the governor’s office…

This bill was passed with a supermajority in the legislature and we are unaware of this input ever being given to legislative leaders. The Governor’s Office always appreciates this kind of input earlier in the legislative process. The legislation codifies adjustments the City of Chicago has been implementing over the years to tackle pension system challenges and represents a proactive step to prevent significant financial or legal issues in the future. The Governor remains committed to maintaining fiscal responsibility at all levels of government and expects the city to implement with careful planning and fiscal discipline.