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* The Chicago pension reform bill is about to start moving as I write this. There’s a noon committee hearing scheduled.
One of the more interesting developments in this legislation was SEIU’s reaction…
.Christine Boardman, president of the Service Employees International Union (SEIU) Local 73, said she supports the “basic constructs” of the pension deal that impacts 10,000 of her members.
“We’re in support of the increase in employee contributions. We’re in support of the Emanuel plan to try to fund it through property tax increases. The bill is going to pass. I know that. You know that,” she said.
“We’re not gonna work against the bill. We’ve told that to Speaker [Mike] Madigan. We’re gonna be neutral, only because of the effect it has on retirees.”
* To the bill, with new stuff bolded…
There shall be printed on each [property tax] bill, or on a separate slip which shall be mailed with the bill: […]
there shall be a separate statement of the dollar amount of tax due which is allocable to the Pension Stabilization Levy under Articles 8 and 11 of the Illinois Pension Code
So, Chicago property taxpayers will get to see how much they’re paying toward this pension fix.
* Also in the bill…
for payment years 2016 through 2055, the annual amount determined by the Fund to be equal to the greater of $0, or the sum of (1) the City’s portion of the projected normal cost for that fiscal year, plus (2) an amount determined on a level percentage of applicable employee payroll basis (reflecting any limits on individual participants’ pay that apply for benefit and contribution purposes under this plan) that is sufficient to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of 2055.
* Some Republicans are saying that the above language means there is a mandated property tax increase in the legislation. Yes, there are definitely minimums set, so taxes will absolutely have to rise because of the statute. But aldermen are gonna have to put a little skin in the game as well…
For levy years 2015 through 2020, the city council of the city shall levy a separate tax annually upon all taxable property in the city that shall be known as the Pen Stabilization Levy and shall be at a rate that, when extended, will produce an amount that is no less than one-half of the city’s required contribution amount under subsection (a-2) for each year.
posted by Rich Miller
Wednesday, Apr 2, 14 @ 12:01 pm
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Is there a section of the bill explaining if/how TIF districts are treated?
Comment by Toure's Latte Wednesday, Apr 2, 14 @ 12:14 pm
Rahm wants to get this law passed quick before the ILSC declares the reductions unconstitutional.
The tax funding part will probably stand.
Comment by DuPage Wednesday, Apr 2, 14 @ 12:15 pm
The line item on Chicago property tax bills should read “Richard M. Daley Legacy Tax” in honor of the man who built his reputation in large part by punting his obligations on future generations.
Comment by gopower63 Wednesday, Apr 2, 14 @ 12:24 pm
Property tax increases of this magnitude will kill Chicago neighborhoods.
Comment by downstate hack Wednesday, Apr 2, 14 @ 12:31 pm
Smell a storm a brewin’.
Comment by A guy... Wednesday, Apr 2, 14 @ 12:31 pm
“Rahm wants to get this law passed quick before the ILSC declares the reductions unconstitutional.
The tax funding part will probably stand.”
Funny strategy for Rahm since the provisions of SB 1922 are “mutually dependent and inseverable”.
Comment by Chi Wednesday, Apr 2, 14 @ 12:49 pm
If and when passed when does it go into effect? Will 2015 be the first year for COLA decrease?
Comment by Jack Wednesday, Apr 2, 14 @ 1:04 pm
Would you please stop automatically referring to these bills as pension “reform?” “Reform” is a biased term because it implies that there was something untoward about the benefits accrued. Pension “reduction” would be more neutral, fair and objective.
Comment by anon Wednesday, Apr 2, 14 @ 1:09 pm
Thank you, Anon. Really it is pension theft!
Comment by Jack Wednesday, Apr 2, 14 @ 1:29 pm
@Chi12:49PM=mutually dependent and inseverable=
I stand corrected if that is the case. Most of them have the “if one part is thrown out, the rest of this law is valid” or something similar.
Comment by DuPage Wednesday, Apr 2, 14 @ 2:00 pm
I probably didn’t emphasis it as much as I should have in the 1:50 pm post, but that COLA change to only calculate on the 2014 / original pension amount, is a HUGE hit to the retirees.
Comment by RNUG Wednesday, Apr 2, 14 @ 2:29 pm
- Toure’s Latte - Wednesday, Apr 2, 14 @ 12:14 pm:
No mention of TIF’s that I saw
Comment by RNUG Wednesday, Apr 2, 14 @ 2:30 pm
- Jack - Wednesday, Apr 2, 14 @ 1:04 pm:
Assuming it gets passed soon enough to take effect on 1/1/2015 from a simple majotity or it gets a supermajority later to take effect 1/1/2015 … yes, the first lowered COLA would be 2015.
Comment by RNUG Wednesday, Apr 2, 14 @ 2:57 pm
===Toure’s Latte - Wednesday, Apr 2, 14 @ 12:14 pm:
Is there a section of the bill explaining if/how TIF districts are treated?====
Why would it need to? The property tax paid at the new rate (above the frozen TIF level) would go into the TIF fund just as it would now, allowing that increment to grow until the TIF expires. TIF funds not used for development would be proportionally and annually redistributed to the taxing bodies in the district. I don’t see how this would change that. The question on the existence of the TIF, a whole nother ballgame.
Comment by A guy... Wednesday, Apr 2, 14 @ 3:21 pm
I am not sure why “downstate hack” thinks the property tax increase will kill Chicago neighborhoods. Please explain? I live in Chicago and honestly don’t see that happening.
There are communities. like Englewood on the south side, where the median price of homes currently listed is $24,900 and the median price of homes that sold is only $47,000. Really for lower priced homes in many communities the rate increase will not add up to much cash out of people’s pockets.
In higher income communities, with more expensive homes we are talking about a much bigger impact. Lakeview on the north side for example where the median home on the market is $450,667 and the median price of homes sold in the last year was $429,000 will experience a bigger impact than poor communities.
But most people with money who live in Chicago are there because of proximity to downtown jobs and it is not likely they will pack up, sell their homes and condos at a loss, and move to Hinsdale.
Comment by Rod Wednesday, Apr 2, 14 @ 3:31 pm
This is going to cause a major stink when folks think the pensions are bleeding them dry. The dollars shown as pension contributions should not reflect repayment of the unfunded obligation. That amount is standard debt service, not pension contributions.
Comment by Jimbo Wednesday, Apr 2, 14 @ 4:21 pm
- Jimbo - Wednesday, Apr 2, 14 @ 4:21 pm:
It’s pension funding that was never paid in. People weren’t complaining when they were paying too little.
How would you label it / pay it?
Comment by RNUG Wednesday, Apr 2, 14 @ 4:51 pm
RNUG, debt service. It’s no different than paying bond holders. The money was borrowed and is now being paid back. Not that it would happen, but phrasing it this way makes it look like the pensioners are bleeding taxpayers dry, when in reality, the bill is now due for years of low taxes. People will see this and get outraged about pensions. Just wait. That appears to be the plan.
Comment by Jimbo Wednesday, Apr 2, 14 @ 5:06 pm
- Jimbo - Wednesday, Apr 2, 14 @ 5:06 pm:
The money was never paid in the first place. Now it has to paid (not repaid) with the interest it should have earned. It may be semantics, but that is different than borrowing from the fund and having to repay it.
Comment by RNUG Wednesday, Apr 2, 14 @ 5:23 pm
And what people should get outraged about is the politicans who didn’t pay the bill when first due and / or took pension “holidays” …
Comment by RNUG Wednesday, Apr 2, 14 @ 5:25 pm
BTW - Hinz is predicting the bill will be passed by both chambers by the end of the week.
Comment by RNUG Wednesday, Apr 2, 14 @ 5:29 pm
“WHOOPS!”
Comment by Dirty Red Wednesday, Apr 2, 14 @ 11:39 pm
RNUG, yes it is just semantics, and it doesn’t matter because it isn’t like they would ever call it what it is. I would argue deferred payments are exactly the same as borrowing money. It is a debt on the balance sheet, so paying it is different than funding a line item for a program. I think it is a shame that they plan to whip up anti-government worker sentiment just so they don’t take any heat for the tax increase. Oh well, I think as far as that being a bad thing we agree.
Comment by Jimbo Thursday, Apr 3, 14 @ 8:35 am