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A spokesman for the mayor said the measure “would transfer a massive, unfunded mandate to Chicago taxpayers at a time when there are no additional funds to cover this new obligation.”
The bill’s sponsor, Sen. Rob Martwick, D-Chicago, said in a brief debate this afternoon that the legislation only codifies an existing city practice of winking and nodding. head. The current law is “one of the weirdest quirks of pension law” and is “the most austere COLA offered in any retirement system in the state of Illinois,” Martwick said. The proposal was approved by the House in the spring of 2019.
Currently, two firefighters who start on the same day and work the same length of time could have “significantly different” COLAs depending on their date of birth. People born after January 1, 1966 benefit from a COLA adjustment of 1.5% with a ceiling of 30% (which they would reach in 20 years). People born before this date receive an annual increase of 3% in the cost of living with no ceiling.
Since 1982, says Martwick, “the Illinois General Assembly, with a nod to the city of Chicago, has shifted this (birth) date bit by bit.” The last year the date was brought forward was 2017.
“This bill makes the law reflect actual practice, and I would suggest that if what we’re trying to do is achieve pension stability, the first thing to do is make the finances transparent,” he said. said Martwick. “This bill enshrines in law exactly the benefits they will receive, and it forces the city of Chicago to calculate the benefits on this actuarial ramp that they are on to get funding so that they can actually hit 90 for. percent of the funding they promised to do. “
The Chicago firefighters’ pension “is a seriously underfunded plan,” according to the fund’s latest actuarial report. “The funding ratio is only 18.4% using the market value of assets and the unfunded actuarial liability is $ 5.1 billion as of December 31, 2019.”
The majority of the fund’s costs are paid with property taxes, and the mayor’s office warns that passing the legislation could result in higher taxes.
“If this irresponsible law becomes law, Chicago taxpayers will have to pay $ 18-30 million per year, for a total of more than $ 850 million by 2055,” according to a statement. “These are the same types of actions that further erode trust in government.”
The measure would cost the city more than $ 850 million by 2055, according to a city spokesperson.
Lightfoot has already faced important repression of aldermen following a relatively modest increase in property tax in its last budget. She and Martwick have heads thrown back in the past.
Brad Cole, executive director of the Illinois Municipal League, said in a statement that this only worsened the city’s unfunded retirement debt debt. “It is better to leave this to the normal agreement process, where all parties can negotiate and develop their respective positions in full transparency and dialogue.”
Laurence Msall, chairman of the Civic Federation, a budget watchdog group, said his organization would urge the governor to veto the legislation. “It’s a complete disconnection from the tax reality that Chicago and its pension funds are facing. Adding benefits without any plan or connection to how the city should pay for them is of real concern. The total cost of over $ 850 million through 2055 to Chicago taxpayers is difficult to deal with, and why this would be an urgent priority for the Lame Duck Legislative Session is elusive. “
