Mayor Lori Lightfoot said Friday she’s done all she can to put Chicago’s four city employee pension funds on solid footing — and now, Springfield must do its part.
After paying down $1.3 billion in pension debt over the last four years and climbing the ramp to actuarially based funding, Lightfoot’s $16.4 billion 2023 budget went above and beyond.
It prepaid $242 million in future pension debt. That not only avoids saddling Chicago taxpayers with compounded interest, but also averts the need for the Municipal Employees, Laborers, Firefighters and Police pension funds to sell assets to cover liabilities.
Having done all of that, Lightfoot said state lawmakers should take it from here.
“It’s now time for municipalities across the state to get our due. All of us have done all of the things that the rating agencies and others have told us to do. We have made government work more efficiently. In Chicago, we haven’t cut services, but other municipalities have been forced to cut services, have been forced to lay people off. And yet, they’re still suffering,” the mayor said after making her fiscal case to the City Club of Chicago.
“Springfield and the governor’s office have to take notice and start the process,” she said.
Mayor Rahm Emanuel tried to negotiate pension reforms that were ultimately overturned by the Illinois Supreme Court. The court noted the reforms violated the Illinois Constitution, which states pension benefits “shall not be impaired or diminished.”
On Friday, Lightfoot said it’s time for the city and its labor unions to “get to the table, make some hard choices, but do the right thing” to make certain that pensions promised to city employees and retirees are “actually available” to honor those promises.
“I’m not prepared to talk about specifics here. But we have to be at the table with all of the relevant stakeholders and think about structural changes that are necessary to shore up the pensions — not taking away the benefits that existing retirees are getting. We’ve got to look at other things that we can do. You know the list. What’s missing is the political will. And we’ve got to find it,” she said.
“If we still are pouring money into a system that is fundamentally flawed, it’s gonna become the tail that wags the dog of city government,” she said.
Lightfoot is not alone in demanding that Springfield step up to the plate.
Civic Federation President Laurence Msall made the same argument, while applauding the mayor for including the pension prepayment in her preelection budget.
He noted that the Illinois General Assembly dictates “who the members are, what their contribution levels must be and what benefits” retired city employees receive and that state help was needed to ease “enormous pressure” to raise local property taxes.
Pressed to identify funding sources, Msall made a renewed pitch for taxing retirement income in Illinois, broadening the sales tax umbrella to include professional services and amending the Illinois Constitution to eliminate the pension protection clause.
Early on, Lightfoot floated a plan for a state takeover of the four funds, but was shot down by Pritzker.
The governor subsequently made Chicago’s pension crisis infinitely worse by ignoring the mayor’s plea to veto a bill boosting pensions for thousands of Chicago firefighters.
