Chicago Mayor Brandon Johnson has set up a task force to explore a solution to the city’s pension deficit and called on the city to address one of the city’s most serious and most intractable financial problems. asked the group.
Johnson announced the formation of the task force late Friday, but did not specify who would serve on the task force, but included “state legislators, the city’s budget director, the city’s chief financial officer, It will include representatives from the city’s various trade unions, including both the police and police.” firefighting union. ”
“As mayor of Chicago, I will work to protect both the retirement security of our workers and the financial stability of our government, helping us achieve our goals of investing in talent and strengthening communities in every corner of our city,” Johnson said. said. said in a statement. “I am working with Springfield’s State Law Partners to work together to find sustainable pathways to address the gaps that exist in the city’s four municipal pension plans (Firefighter, Police, Municipal, and Workers). We are forming a group.”
Meanwhile, local police fraternity president John Catanzara released a video and said he was working with city officials on a broader solution. The video was seen as a positive sign because of Mr. Catanzara’s controversial ties to city hall and Mr. Johnson’s claim that some police forces would quit if Mr. Johnson were elected.
But Mr. Johnson’s predecessors have struggled to raise money for the city’s pension increase, so it would be easy to set up a task force. For example, former mayor Rahm Emanuel promoted a plan that was ruled unconstitutional by the Illinois Supreme Court.
Former Mayor Lori Lightfoot secured a Chicago casino from Illinois legislators, but failed to persuade state officials to take over the city’s pension. She launched the move early in her administration.
Bulging police and fire pensions have long been a political headache for the mayor of Chicago. Mr. Lightfoot failed to stop Gov. JB Pritzker from signing into law a 2021 funding structure for firefighters.
Now it’s time for Johnson to seek solutions to a politically thorny problem with few clear legal remedies.
As of the end of 2021, the City of Chicago’s sworn police pension plan was only 24% funded, with unfunded liabilities totaling more than $11.8 billion. Firefighter pensions were 20.9% funded by $5.6 billion of unfunded debt.
Legislators have long struggled with how to curb Chicago’s retirement benefits, but the state’s constitution doesn’t allow pension cuts for existing workers, so the curtailment doesn’t affect future employees. can only be done against But some say the changes from just over a decade ago have gone too far, refusing to pay municipal workers pensions at the level required by the federal government.
Lightfoot had argued that the 2021 state bill would increase firefighter pension costs and could lead to higher property taxes, but proponent Democratic state Senator Robert Martwick Proponents, including Mr., said the bill would put Chicago’s firefighters’ pensions on par with those in suburbs and downstates.
This bill repealed the pension law that required Chicago firefighters born after January 1, 1966 to receive a non-compounded cost-of-living adjustment of 1.5% per year in their pensions, up to the age of 30. . %. Firefighters born before that date received a 3% annual salary increase.
The new law eliminates Chicago’s pension gap based on date of birth and eliminates the 30% cap on cumulative cost of living adjustments. The scheme is now more similar to the out-of-town scheme, with firefighters hired before 2011 receiving a 3% compounded annual pension increase, and firefighters hired within the last 10 years less generous. not receiving an increase.
Part of the reason is that the city has historically avoided paying small raises to young firefighters, instead asking Congress every few years to bring the deadline date forward. is. However, the city continued to base contributions on lesser amounts, leading to a permanent underfunding of the pension system.
Still, Lightfoot warned that the change would double pension costs by $18 million to $30 million each year. She argued that similar bills introduced by Martwick related to police pensions, if enacted, would increase the city’s annual costs by $57 million to $96 million annually.
The bill, which was defeated in the Senate, would eliminate the age limit for officers (over 55) and receive an automatically increasing pension of 3% per annum, without a 30% cap.
On the police side, the city funds two funds. One sworn he is a CPD police officer. other civil servants. Payments to the Chicago Police Department Pension and Benefits Fund totaled $5.3 billion from 2012 to 2022, while payments to the City Employees Pension and Benefits Fund totaled $300 million, according to city budget documents. exceeded $30 million.
Total pension payments for 2022 were $832 million for Chicago Police sworn officers and $64 million for civilians. In addition to his annual benefits of $175 million, police “general finances” are estimated to cost him over $1 billion.
Mr Johnson has not taken his position on Martwick’s pending bill on the police pension structure. His deputy chief of staff, former state senator Cristina Pacione Zayas, voted in favor of Martwick’s firefighter pension bill in 2021.
Meanwhile, plans to bring casinos to Chicago, which are being negotiated under Lightfoot, are expected to bring new revenue streams to police and firefighter pensions. The project, led by casino chain operator Bally’s, is expected to raise between $56 million and $70 million over the next three years after the temporary casino opens at the Medina temple in River North, according to the latest projections. Beginning in 2026, he’ll see his revenue soar to $170 million, and in 2028 he’ll reach $246 million as the current Chicago Tribune Freedom Center printing press’s permanent facility opens.