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* Remember this comment from the governor about the city’s new water and sewer tax hike?…
“My concern with the proposal so far, is they’re largely based upon re-ramping the payment schedule and slowing down the payment schedule and backloading it,” he said. “That’s what we’ve done in Chicago for decades and it’s the reason Chicago has the worst credit rating of any city other than Detroit.
* Well, the inimitable Fran Spielman put one and one together and got veto threat…
Although the City Council easily approved the mayor’s plan to slap a 29.5 percent tax on water and sewer bills to save the Municipal Employees pension fund, the Illinois General Assembly still needs to sign off on employee concessions tied to the deal as well as the funding schedule.
Same goes for the mayor’s plan to save the Laborers pension fund, bankrolled by a previously-approved, 56 percent tax on monthly telephone bills. […]
In an emailed statement, Molly Poppe, a spokesperson for the city’s Office of Budget and Management, said the governor fails to recognize that Chicago is moving “from a woefully insufficient contribution level set by state law that ensures bankruptcy in the next ten years to a responsible payment plan with a ramp” to an “actuarially required contribution” that “ensures actuarial funding in perpetuity.”
Pressed on whether Rauner was, in fact, threatening a veto, his spokesperson Catherine Kelly would only say that the “dialogue” continues about “enacting comprehensive pension reform for both the city and state.”
* She also pointed to a new report by Nuveen Asset Management…
“Unlike the state, the city of Chicago is taking steps to address its challenges head-on . . . While the state’s credit rating is susceptible to rating downgrades, we think Chicago’s identified pension funding proposals should forestall further downward rating pressure,” the report states.
“Illinois’ unprecedented budget impasse is ultimately political and the path to compromise is still unclear . . . By operating without a budget for so long, state leaders have created a structural budget gap too severe to address without significant new revenues or drastic cuts.”
The last time Rauner vetoed a Chicago pension bill, both chambers overrode it with a couple of House Republicans jumping on board. So, a veto might be futile again. We’ll have to see.
posted by Rich Miller
Friday, Sep 16, 16 @ 2:09 pm
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Previous Post: *** UPDATED x4 - Rauner refuses to comment - Sandack issues statement *** Get ready for horribleness
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As I’ve said before, the Governor doesn’t want Chicago to solve the problem. He wants them to declare bankruptcy. Anything short of that he’s against.
Comment by Demoralized Friday, Sep 16, 16 @ 2:13 pm
At least the City is doing something, which is better than nothing, so give them some credit for that. Raising taxes isn’t an easy thing to do.
Comment by Not It Friday, Sep 16, 16 @ 2:14 pm
“Illinois unprecedented budget impasse is ultimately political…”
Not economics? I’m shocked.
Comment by Anonymous Friday, Sep 16, 16 @ 2:15 pm
Well, if the GA cannot override a veto, I suppose Chicago can change the assumed rate of return on investments to something in the neighborhood of 15%.
Comment by SAP Friday, Sep 16, 16 @ 2:25 pm
The veto may be futile, but will backbones regrow after the General??? The Veto Session is gonna be very interesting.
Comment by Anon221 Friday, Sep 16, 16 @ 2:26 pm
I don’t want to pay more for my water but this pension-mess needs to get straightened out.
Gov appears to be negative just for the sake of negativity.
Comment by Belle Friday, Sep 16, 16 @ 2:29 pm
Does this mean that the Emanuel Christmas party list is going to be culled for names starting with Rauner?
Comment by Huh? Friday, Sep 16, 16 @ 2:38 pm
—
Gov appears to be negative just for the sake of negativity.
—
Gov appears negative in order to leverage politicians to support for his (now stale, now tiring) Turnaround Agenda.
Everybody knows the punchline now.
Comment by Bobby Catalpa Friday, Sep 16, 16 @ 2:45 pm
“My concern with the proposal so far, is they’re largely based upon re-ramping the payment schedule and slowing down the payment schedule and backloading it,”
I wonder if Rauner is suggesting that the payment schedule be frontloaded rather than backloaded? In the end, frontloading the payment schedule would save the taxpayers a large amount of money but would probably be politically unpopular.
Comment by Anonymous Friday, Sep 16, 16 @ 2:54 pm
Governor Rauner, please define legal “comprehensive pension reform”.
Comment by RNUG Friday, Sep 16, 16 @ 2:59 pm
Leverage, leverage, leverage. It’s all about destroying unions.
Comment by Norseman Friday, Sep 16, 16 @ 3:05 pm
Rich,
If those Republicans jump ship again on the Veto vote, we will have them on Double Secret Probation.
-ck-
/Extra snark
Comment by WhoKnew Friday, Sep 16, 16 @ 3:39 pm
Property, water, sewer, phone, garbage, taxis — when it comes to “reverse Robin Hood” tax hikes to fund pensions, Rahm is remarkably creative.
If Rauner wants to style himself as a champion of the working class, Chicago Dems are giving him some help.
Comment by Anon Friday, Sep 16, 16 @ 3:40 pm
Rahm is at least trying to fix the problem, unlike Daley throughout his 22 yrs of fiscal malpractice. No need to veto it. If Chicagoans don’t like it they can dump Rahm or their aldermen in ‘19.
Comment by Independent Friday, Sep 16, 16 @ 4:31 pm