Mayor pushes public pension fix to council
Stiff resistance greets proposal
Mayor Rahm Emanuel immediately faced stiff resistance Wednesday to a key pillar of the proposal he’s hoping will cement his status as the guy who responsibly took on Chicago’s crushing public pension debt.
Emanuel delivered a City Hall speech calling for a state constitutional amendment to allow a reduction in public workers’ pension benefits, an idea several high-profile candidates to follow him in office ripped and new Democratic Gov.elect J.B. Pritzker dismissed as a non-starter. Emanuel treated his pension blueprint with pomp and circumstance, delivering it to aldermen in a half-hour speech big on legacy building at the start of the City Council meeting.
“For the last 7 ⁄ years, 1
2 we have worked together to stabilize, strengthen and secure Chicago’s pension funds, from our city’s pension funds, to our schools, to all of our sister agencies,” he said. “Together, we have been addressing this challenge honestly and forthrightly.”
The mayor gave his remarks as Chicago braces for nearly $1 billion in new required annual retirement payments just five years from now. Those increased payments ramp up beginning next year. He’s leaving office in May, so the bulk of the heavy lifting on any plan to address pension debt will come from his successor.
Still, the lame-duck mayor insisted he has the clout to push forward the series of revenue raisers he unveiled to pay for projected pension shortfalls. They also include a controversial city bond structure, reliance on money from a cityowned casino and legalized recreational marijuana that would need approval in Springfield.
Asked afterward why he waited so long to make his proposal and why he thinks the next occupant of the mayor’s office will listen, Emanuel argued he has been trying to cope with the looming problem since he took office. And without naming his predecessor Mayor Richard M. Daley, Emanuel contrasted his approach with the prior administration’s, saying it’s “the responsible thing to do” to leave the next mayor some possible solutions.
What won’t work, Emanuel said, is the “tax the wealthy” mindset embraced by the ascendant progressive wing of the Democratic Party that could take an increasingly central role in charting the city’s future after he steps down.
“Now, there may be some bitter medicine, and I get it,” he said. “But to my friends in the progressive circles, don’t just think you’re going to tax the wealthy as a way to grow this economy. You’re going to cut jobs doing that.”
Pritzker opposes amendment
That assessment came despite Emanuel saying in his speech that while there is “no single solution” to the impending payment cliff, the city’s response “must be based on progressive principles.” Instead, Emanuel positioned himself as the propension realist in a world that’s very different from 1970, when the Illinois Constitution, which says pension benefits “shall not be diminished or impaired,” was adopted.
But Pritzker threw cold water on the constitutional amendment idea, which is opposed by powerful public-sector unions whose members would take the financial hit if their benefits were decreased.
“My commitment is to pay the pensions that are owed to people. I really believe strongly that when you’re promised something, you’ve saved properly in order to pair it up with what whatever you’ve been promised in a pension, that you ought to get that pension and not have it cut,” Pritzker said, labeling it a push by Republicans.
“I just don’t see the likelihood of anybody getting a constitutional amendment passed to change that provision in our constitution, and it’s not something I’m out promoting in any way,” he said at the Bronzeville announcement of a $10 million JPMorgan Chase lowinterest loan investment for the South and West sides.
Told of Pritzker’s remarks, Emanuel predicted that once the Democrat gets into office, he’ll realize that in order to pass the progressive income tax he favors, he’ll need to do something to reform the state and city pension systems. Only increasing taxes, Emanuel said, won’t be enough to consolidate votes in a Democratic caucus that increasingly features members from suburban districts that lean more conservative on the issue.
“I do think that the legislators will weigh in, if they go forward on a tax increase,” Emanuel said. “If you try to resolve the fiscal challenge of the state solely on revenue, you won’t find a balanced approach and can adversely affect the economic and jobs environment of the state.”
Even if a constitutional amendment gets on the ballot and is approved by voters, it’s not clear it would allow the city to reduce current and past city employees’ retirement benefits, something Emanuel acknowledged Wednesday. And changes already have been made to lower new city employees’ benefits.
Three-fifths of the state Senate and House would have to vote to place the proposed amendment on the ballot, which then would have to be approved by voters. The earliest such a proposal could appear on the ballot is 2020, and its approval would likely set off years of litigation that could involve both state and federal courts.
Ralph Martire, executive director of the Center for Tax and Budget Accountability, a union-backed bipartisan research group, said going through all that would be a waste of time, because the constitutional change couldn’t be retroactively applied to retirees or current employees who were promised compounded cost-of-living adjustments when they were hired. “You can’t take away a constitutional benefit once it’s been granted,”
Mayoral candidates bash amendment
Emanuel’s call to open up the constitution to address the issue drew criticism from nine mayoral hopefuls at a cacophonous candidate forum Tuesday night on the Northwest Side where contenders spent much of the time taking shots at one another as they try to separate themselves from the pack. Emanuel’s proposed amendment emerged as the
only point of consensus among all nine candidates at the Copernicus Center.
“We can find the resources in this city to live up to our obligations, and as we go forward, we can figure out how to do other things better,” said candidate Gery Chico, a former City Hall chief of staff for former Mayor Richard M. Daley.
State Comptroller Susana Mendoza agreed.
“We do not mess with people’s pensions because there were promises that were made and we have to keep them. End of story,” said Mendoza, who has sought to attract the support of the city’s building trades unions.
Former federal prosecutor Lori Lightfoot also said she wanted pensions to remain untouched.