On May 30, the General Assembly voted to override Gov. Bruce Rauner’s veto of Chicago Mayor Rahm Emanuel’s plan to delay payments to Chicago’s police and fire pension funds – at a cost to Chicago taxpayers of an additional $18.6 billion over the next 40 years.
Thanks to new government reporting standards, Chicago’s municipal-workers and laborers pension funds’ debt doubled in 2015 to more than $21 billion. That’s $20,500 of pension debt per Chicago household.
Recently retired career state workers receive an average annual pension of $63,000. On top of this, more than 60,000 workers in Illinois’ State Employees’ Retirement System participate in Social Security.
The Illinois Municipal Retirement Fund’s relative health compared with other government-worker pension funds is only due to its ability to force localities to fund it at the expense of other pension funds and vital local services.
Despite being sentenced to 15 months in prison for a financial crime intended to cover up his sexual abuse of high school students, former U.S. House Speaker Dennis Hastert will continue to receive $28,000 annual pension payments for his six years as an Illinois state representative.
Illinois’ public colleges and universities used to be affordable, but schools have increased tuition from 74-112 percent over the last decade to help pay for administrative hiring sprees and skyrocketing pensions.
Retirement ages, COLAs and out-of-sync pension payouts
Concept of “consideration” allows state workers to negotiate for new benefits and could pave a path toward pension reform.
The city’s rating from Fitch is now just one notch above junk status.
The Illinois Supreme Court’s overturning of Chicago’s modest pension reform means Chicago faces higher pension contributions, rapidly growing pension debt and an increased risk of total insolvency for its pension funds.
Despite striking down a pension-reform package aimed at reducing Chicago’s pension debt, the Illinois Supreme Court opened the door for future legislative reforms.
While striking down modest reforms to Chicago city-worker pensions, the Illinois Supreme Court has effectively given state lawmakers the green light on other avenues for pension reform.
Pension holidays, steep increases in teachers' salaries, and lopsided ratios of teacher contributions to pension payouts have caused the Chicago Teachers’ Pension Fund’s unfunded liabilities to shoot up to $9 billion in 2015.
Illinois’ growing pension costs – not the state budget gridlock – are taking away funding for essential government services, such as education.