There is nothing in this legislation barring the use of outside revenue to fund pensions. A pension obligation bond, airport revenue, a casino or another source of cashflow could be the alternate source of revenue. Mayor Daley is trying to scare the property tax payer. He doesn't speak of addressing the problem that wouldn't have been here if he had taken action 22 years ago.
Rest assure though, he will still get his, of course. Here is the article from the Sun-Times:
Rest assure though, he will still get his, of course. Here is the article from the Sun-Times:
Daley to Quinn: Veto state pension bill
By Fran Spielman City Hall Reporter Dec 8, 2010 10:26PM
Mayor Daley pleaded with Gov. Quinn on Wednesday to veto a bill that, the mayor warned, would choke Chicago homeowners and businesses with a $550 million property tax increase in 2015 to solve the city’s pension crisis.
“They say the taxpayers of Chicago will pay for 100 percent of all pensions and, if you don’t pay for it, we’re gonna take it out of your state income tax [share]. …. What are you gonna do for the Board of Education? We can’t go tax crazy,” Daley said.
“This is the highest real estate tax increase in the history of Chicago and that’s only for fire and police. If you put the other unions in there, it’s about $1.2 billion in one year….This will really hit the people. How are you gonna sell your home even if you’re retired? Who would want to buy your home? Buyer beware.”
The governor’s press secretary Annie Thompson was noncommittal when asked whether Quinn intends to veto the bill. She would only say that he would “review this legislation when he receives it.”
“Gov. Quinn is proud of the state’s recent pension reforms and looks forward to working with the General Assembly on additional measures to stabilize pension systems throughout Illinois,” she said in an e-mail response to the Chicago Sun-Times.
Last week, the state House and Senate approved a bill that amounts to a trade-off between police and fire unions determined to restore their pension funds to fiscal health and local governments desperate to reduce their pension costs.
Chicago and other municipalities won a two-tier pension system that would force newly-hired police officers and firefighters to wait until age 55, instead of 50 to retire with full benefits. They would also get reduced cost of living increases and face caps in the final salary upon which pensions are based.
In exchange for those givebacks, the unions got a pledge that their pensions funds would be 90 percent funded by 2041. Chicago’s Laborers, Municipal Employees, Police and Firefighters pension funds now have assets to cover just 42 percent of their future liabilities.
The problem, according to Daley, is the steep ramp-up in city-mandated contributions to those funds, beginning in 2015. The bill further mandates that those contributions be paid for by property taxes.
Senate President John Cullerton (D-Chicago) has vowed to re-tool the timetable in follow-up legislation next month. But, that’s apparently not good enough for Daley, who’s taking his case directly to Quinn.
In a letter to the governor signed by most of the 50 aldermen, the city warned that a 2006 bill that reformed CTA pensions gave the mass transit agency 50 years to reach a 90 percent funding level.
“That’s what we’re asking — just to slow down and get some facts. … Just because you want to tax people, fine. But, you have to get facts on this. You have to bring people in who know something about pensions,” Daley said.
The lame-duck mayor said once again that it will take a long-overdue increase in employee contributions to solve the problem created by four under-funded city employee pension funds that will run out of money by 2030.
“Participation of employees is only nine percent. It’s been like that for 30 years. You have to negotiate that. They took it away,” Daley said.
“In the private sector, people give more contributions. [Quinn is] saying the taxpayers should pay for everything. I differ with that. I think there’s a solution here. But it isn’t all for taxpayers to pay for everything. I disagree with that.”
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