PENSION RETENTION
Rahm hatches new plan to save two city employee funds
Chicago would forge ahead with higher contributions to two of four city employee pension funds — even without $ 2 billion worth of employee concessions over 40 years that only state government can authorize — under a mayoral plan introduced Wednesday.
Last week, Mayor Rahm Emanuel offered to drop his objections to Gov. Bruce Rauner’s $ 300 million plan to sell the Thompson Center — and said he’d sign off on maximum zoning for the site — if Rauner would OK Emanuel’s plan to save the Municipal and Laborers pension funds as a show of good faith.
Rauner turned down the deal. So on Wednesday, the mayor flexed his home- rule powers to save the funds for now.
Emanuel introduced an ordi- nance that would guarantee Chicago taxpayers honor their side of a 2016 bargain reached with organized labor. Increased contributions to the two funds would come from corporate fund revenues freed up by a 56 percent increase in the monthly tax tacked on to telephone bills in 2014 and from a new 29.5 percent tax on water and sewer bills.
“No governor has done what Gov. Rauner has done — threatening a veto on an agreement reached between the two parties and nothing is asked of the state,” Emanuel said. “The irony of his veto for Mr. Reformer is that the reform stuff is the thing that is now being held back.”
Emanuel says those concessions would save taxpayers $ 2 billion over 40 years.
Rauner’s spokesperson Eleni Demertzis countered, “The bill the mayor wants signed is a massive property tax increase for the people of Chicago. The mayor needs to get serious about reforming Chicago’s finances and stop sticking it to taxpayers.”
Emanuel’s plan to save the two pension funds hit a roadblock when Rauner vetoed a bill that locked in the employee concessions and authorized a five- year ramp to actuarially required funding.
In his veto message, the governor noted that Chicago’s largest pension fund would still be left with a gaping hole — even after the 29.5 percent tax on water and sewer bills is fully phased in — that would require more revenue to honor the city’s ironclad commitment to reach 90 percent funding over a 40- year period.
Last fall, City Council approved the mayor’s plan to slap a 29.5 percent tax on water and sewer bills to save the Municipal Employees fund.
But the Illinois General Assembly still needed to sign off on the employee concessions tied to the deal. The same goes for the mayor’s plan to save the Laborers pension fund, bankrolled by the 56 percent tax on monthly telephone bills.