Management & Labor

Illinois Governor Signs Bill to Reduce Pension Benefits, Raise Retirement Ages for City Hall Workers

by | June 10, 2014
 

By Monique Garcia, Hal Dardick and John Byrne

Democratic Gov. Pat Quinn on Monday signed into law a measure that would cut pension benefits and raise retirement ages for some City Hall workers, granting Mayor Rahm Emanuel a victory but opening himself up to attacks from Republicans who contend the move will trigger property tax hikes in Chicago.

While the new law requires the city to come up with more money to repair its retirement systems, Emanuel told the Tribune that he will not push the City Council to vote for a property tax increase this year and will look for other ways to find the pension cash. That vow provides political cover for Quinn, who is seeking re-election in November, as well as the mayor and aldermen, who face election early next year.

Still, the measure is far from a cure-all. Employee unions vowed to sue to block the changes, which they contend are unconstitutional. Even if the law passes legal muster, it does nothing to fix the pension funds for police officers and firefighters. That’s a bigger short-term problem for Emanuel, who by 2016 must pay nearly $600 million more into those funds, a chunk so large it could trigger tax increases, service cuts, borrowing or some combination of the three.

Quinn’s signature came on the last day he had to act on a proposal that presented an election-year political quandary for him. The governor had campaigned on reducing property taxes, which he says are regressive and unfair. For months, Emanuel had said property taxes were the way to pay for the pension plan.

So Quinn took his time, reviewing the bill as aldermanic opposition to a property tax hike built up. Meanwhile, Emanuel pushed through the General Assembly a last-minute measure that will allow the City Council to vote to raise 911 taxes on cell phones and land lines by $1.40 a month, to $3.90. That could generate as much as $50 million, putting off the need for a property tax increase until after next year’s city elections. Last Friday, Quinn signed that bill into law.

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