Latest Post | Last 10 Posts | Archives
Previous Post: Isabel’s morning briefing
Next Post: Pritzker takes heat over event pic with accused criminal (Updated)
Posted in:
* 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.
posted by Isabel Miller
Thursday, Sep 18, 25 @ 11:13 am
Previous Post: Isabel’s morning briefing
Next Post: Pritzker takes heat over event pic with accused criminal (Updated)
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
For once, IPI has it right (from the WFLD story):
“you would think that for a bill that has this impact on only Chicago, that the mayor and the CFO would be on the phone every day talking to state representatives, state senators and the governor’s staff, but instead they were totally missing in action.”
Comment by Google Is Your Friend Thursday, Sep 18, 25 @ 11:19 am
More shady machinations from the Mayor’s Office. The goal was probably for the Governor to veto it, so MBJ could try to say “see, he is the real police defunder” or some similar nonsense. MBJ, SDG, and their hatchet men are obsessed with petty politics, perceptions of power, and not being at the “kiddie table” anymore. They really do not care about the substance of government.
Comment by Three Dimensional Checkers Thursday, Sep 18, 25 @ 11:40 am
-This bill was passed with a supermajority in the legislature-
Those are the facts. The money must come from somewhere. You can’t expect people who’ve worked decades to not get what they were promised. If you don’t want ever increasing pension sweetners don’t vote for politicians that will do it.
Comment by Steve Thursday, Sep 18, 25 @ 11:47 am
It would be nice if the GA would adopt an agreed bill process for pensions. Running massive pension changes that have both constitutionally-binding and financial implications on the last week of May sounds like a recipe for disaster. Even if it was discussed prior to it being filed on May 27th, there is no way the city could reasonably review and analyze the fiscal impact of the legislation in 5 days. Actuaries typically take months to analyze benefit and funding changes.
Comment by Blazzzer Thursday, Sep 18, 25 @ 11:50 am
Increasing the unfunded pension liability by over 11 billion dollars “might” exacerbate the issue?
They are now technically insolvent
Comment by Harrison Thursday, Sep 18, 25 @ 11:56 am
“The goal was probably for the Governor to veto it, so MBJ could try to say “see, he is the real police defunder” or some similar nonsense. MBJ, SDG, and their hatchet men are obsessed with petty politics, perceptions of power, and not being at the “kiddie table” anymore.”
I think you’re giving folks way too much credit. Their IGA team can’t stop a resolution at the moment. There doesn’t have to be an ulterior motive.
“It would be nice if the GA would adopt an agreed bill process for pensions.”
The bill passed unanimously in both chambers. Doesn’t get much more agreed.
Comment by *ducks* Thursday, Sep 18, 25 @ 11:58 am
“You can’t expect people who’ve worked decades to not get what they were promised.”
You don’t expect it but it happens all the time. Over the last 50 years housands of private sector pensions have been stolen or more often just went poof due to underfunding and mismanagement, and the members never got made whole or close to it.
I don’t know if the IL legislature or the city of Chicago are going to be able to conjure the magic beans that would make these kinds of retirement benefits sustainable. I realize these are extra protected classes we’re talking about but that doesn’t make money exist.
Comment by Larry Bowa Jr. Thursday, Sep 18, 25 @ 11:58 am
-review and analyze the fiscal impact of the legislation in 5 days. -
Very true but the votes were there. The money must come from somewhere, that’s what the voters wanted via their elected representatives.
Comment by Steve Thursday, Sep 18, 25 @ 12:02 pm
Maybe I missed it but did the Mayor ever actually say he wanted the bill vetoed? The mayor’s office said his concerns were relayed to people but even assuming that’s true (I don’t), being concerned about a piece of legislation is not the same as asking people to vote against it.
Comment by uialum Thursday, Sep 18, 25 @ 12:55 pm
=They are now technically insolvent=
No they aren’t. They can raise revenue by increasing property taxes. They choose not to. Or perhaps they could defund the police as you suggest.
Comment by Pundent Thursday, Sep 18, 25 @ 12:57 pm
@Ducks and @Steve
The bill passed unanimously because who is going to vote against pensions for first responders? The city couldn’t even come out and publicly ask for a veto for fear of the political blowback. This is why an agreed bill process is necessary. It gives management an ability to have a say in the process without having to take a public, politically unpopular stance on feel-good bills. The House Labor committee does it. Why not pensions?
Comment by Blazzzer Thursday, Sep 18, 25 @ 1:19 pm
===This is why an agreed bill process is necessary===
Agreed. But what’s done is done.
Comment by Rich Miller Thursday, Sep 18, 25 @ 1:35 pm
It’s pretty transparent that the mayor is trying to have it both ways. He didn’t want to kill the bill, but he doesn’t want to get blamed for its financial impact.
Even Brandon, who has no game in Springfield, understands what the mayor of Chicago needs to do to hold up legislation. First, personally call the leaders and ask them to put a brick on it. Second, have your team work Chicago members. If that fails, use the bully pulpit to fire up public opposition before the bill is called. There’s no guarantee any of that will work — and it probably wouldn’t have for Brandon, given his horrific political standing. But the fact he didn’t even try speaks volumes.
Comment by Roman Thursday, Sep 18, 25 @ 2:11 pm
@Rich
Agreed. Let’s hope the mayor stops pointing fingers and starts looking at revenue options. He’s going to need them. I keep waiting for the other shoe to drop…
Also, there will always be more pension asks in the future. Maybe the State can learn from this experience and start implementing an agreed bill process? Perhaps just wishful thinking on my part.
Comment by Blazzzer Thursday, Sep 18, 25 @ 2:16 pm
First, its tough to have an Agreed Bill process if Republicans are not willing to be partners in the legislative process. That said, lawmakers were all in agreement here.
Secondly, it is important to note the bill increases liability by $11 billion *over the next 30 years*, so we are talking about $400 million a year, roughly.
Third, the bill — again as I understand it — creates parity between the retirement system for Chicago first responders and downstate first responders.
If lawmakers never intended to increase benefits for Chicago widows, they never should have increased benefits for downstate widows, because it was pretty foreseeable that Chicago police and fire were going to seek equal treatment.
If someone wants to argue “we can’t afford to treat Chicago firefighters equally” go ahead. Voters are not going to buy it.
This all seems like a roundabout way of the mayor trying to get more money from the state. Especially after Rich lampooned the City for always asking someone else to pay for their stuff.
Johnson might find it more productive to say “I agree in principle that Chicago responders deserve to be treated equally, but this is a huge unfunded mandate imposed by the state, and we want to work with them to fund it,”
Comment by Thomas Paine Thursday, Sep 18, 25 @ 2:34 pm
Most amusing thing Johnson may ever said is Chicago does not have a spending problem but instead it has a revenue problem- anyone with more then a high school education would know is if you are spending more then you are making- you have a spending problem
Comment by Sue Thursday, Sep 18, 25 @ 3:01 pm
The Governor’s failure to AV the bill and attempt to replace it with a more sensible bill that included the “safe harbor” protections without the massive cash outlay is a massive failure of the Governor’s office. Our children’s children will suffer because he, like many, chose inaction over action. Regardless, the mayor’s office didn’t do a good job either and is trying to score cheap points here. The mayor should let this go.
Comment by Garfield Ridge Guy Thursday, Sep 18, 25 @ 3:02 pm