By JEFFREY BISHKU-AYKUL
A new bill sponsored by state Sen. Kwame Raoul (D-16) that would change how city pensions are funded now awaits Gov. Quinn’s signature, following its passage in the General Assembly last week.
Senate Bill 1922 would end annually compounded benefit increases and require larger contributions from workers participating in two retirement plans: the Chicago Laborers’ Annuity and Benefit Fund and Chicago Municipal Employees’ Annuity and Benefit Fund. It would also seek $250 million in revenue from the city to fund these plans, which aldermen could choose to generate through a property tax increase.
Senate President John Cullerton “approached me and informed me that the city and vast majority of the affected collective bargain units had come to an agreement on a fix for the troubled labor and municipal pension funds,” Raoul said Friday.
Although Mayor Emanuel negotiated the deal with unions, it is opposed by the Chicago Teachers Union and the We Are One coalition, which comprises more than 20 labor groups.
Raoul, who, as chair of Gov. Quinn’s Pension Reform Conference Committee, helped to pass last year’s pension bill increasing retirement ages and tying benefit cost of living adjustments to inflation, called the recent negotiated solution an “ideal situation.”
He added, “I’m not a financial services professional or econ expert or anything like that. But sitting on the conference committee put me in better touch with the consequences of doing nothing.
Raoul echoed his arguments in favor of last year’s drastic pension reform bill in his support of SB 1922, arguing that inaction would lead to insolvency. He cautioned against another credit downgrade — the last one took place in early March — which he said would increase the cost of borrowing money for the city.
“And nine times out of ten that’ll be payroll,” Raoul said. “That’ll mean layoffs. And so, people have to make that connection.”
There is speculation as to what Gov. Quinn will do now — in light of the upcoming gubernatorial election and his opposition to property tax increases — but both Raoul and Illinois House Speaker Madigan have said they think he will sign the bill.
“It would be irresponsible to do anything but sign it,” Raoul said. “And I’m confident that the governor is smart enough to understand that.”