\n\t\t\t\tGov. J.B. Pritzker had a chance to stop a bill putting taxpayers on the hook for $11.1 billion in inflated pension benefits for Chicago police and firefighters. He blew it. Taxpayers will be paying the price for decades.
\n\t\t\t<\/p>\n
State lawmakers used the last day of the legislative session to pass legislation boosting benefits for Chicago police and firefighters, putting a city already facing monumental pension debt another $11.1 billion in the hole.<\/p>\n
Gov. J.B. Pritzker was asked<\/a> by media, civic groups and fiscal watchdogs to do the fiscally responsible thing and veto the bill. He didn\u2019t, signing<\/a> it into law Aug. 1. He defended the move: \u201cwhat I know is that we have helped the Chicago police get fairness in their contract.\u201d<\/p>\n House Bill 3657<\/a>, a pension \u201csweetener\u201d for police and firefighter employees under Tier 2 pensions, will swell the city\u2019s already staggering retirement debt. In the first year, it will cost\u00a0$52 million<\/a>\u00a0to implement. By 2055, it will add\u00a0$11.1 billion<\/a>\u00a0in accrued liabilities, according to city estimates.<\/p>\n HB 3657 boosts Tier 2 pensions \u2013 a benefit system designed to control the growth of pensions for government workers hired since 2010 \u2013 by\u00a0changing<\/a>\u00a0the method used to calculate the final average salary for Chicago police. It was the average of the last eight years and is now the higher average between the last eight years or the last four years. By contrast, Social Security looks at the average earnings over the course of a worker\u2019s entire career. This shorter time period reintroduces the risk of end-of-career pay spikes that drive up pension liabilities.<\/p>\n Another change it introduces for both Chicago police and firefighters is to the salary limit beyond which no higher pension can be earned. Currently, it sits at\u00a0$127,283<\/a>\u00a0and increases at the lower of either one-half of inflation or 3%. Thanks to Pritzker\u2019s signature, it will increase at the lower of either the full rate of inflation or 3% and started with a boost to $141,408. Additional changes were made to enhance the benefits offered to the surviving families of police and firefighters.<\/p>\n These changes essentially restore Tier-1 style perks, and were already made for other public safety personnel\u00a0downstate<\/a>\u00a0of Chicago in 2019. But two wrongs don\u2019t make a right. It was unaffordable for those systems. The taxpayers living in Chicago can\u2019t afford to finance these benefits, either.<\/p>\n The city already faces a projected\u00a0$1.2 billion<\/a>\u00a0budget shortfall in 2026, prompting low credit\u00a0ratings<\/a>\u00a0and the threat of higher\u00a0property taxes<\/a>, even with Mayor Brandon Johnson vowing<\/a> they will not rise. It was the worst time to add costs.<\/p>\n Pritzker\u2019s approval of the pension \u201csweetener\u201d dramatically increases the unfunded liabilities of two of the\u00a0worst-funded pension systems in the entire country. Those funds will likely fall to 18% funded, speeding up a march toward insolvency.<\/p>\n Chicago didn\u2019t need another $11.1 billion in pension liabilities, but Pritzker piled them on anyway. Chicago residents will be paying the bill long after Pritzker\u2019s gone.<\/p>\n","protected":false},"excerpt":{"rendered":"
Gov. J.B. Pritzker had a chance to stop a bill putting taxpayers on the hook for $11.1…\n","protected":false},"author":2,"featured_media":68773,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":["post-68772","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/68772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=68772"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/68772\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/68773"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=68772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=68772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=68772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}