Breaking News Bar
updated: 4/7/2014 9:31 PM

Tax hike removed from Chicago pension legislation

hello
Success - Article sent! close
 
Associated Press

SPRINGFIELD -- After an outcry from Illinois' governor and a host of lawmakers on both sides of the aisle waging re-election battles, language imposing a Chicago property tax hike has been removed from legislation overhauling two city pension funds.

House Speaker Michael J. Madigan quietly filed an amendment to the legislation Monday evening, hours after the House adjourned for the day. The amended plan would squarely place all revenue decisions -- among them, the burden of levying an unpopular tax increase -- on the city council.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

Mayor Rahm Emanuel announced last week that he had an agreement with two city unions covering 57,000 workers and retirees to cut a $20 billion deficit in the municipal workers' and labor workers' pension funds over 40 years. He said it would happen in part through a five-year, $750 million increase in property taxes.

The state General Assembly must approve the changes. Some state lawmakers had raised concerns that they would unfairly shoulder the burden of raising taxes if they approved the original legislation.

"The amendment is designed to address some of the concerns the legislator voiced when the proposal was first unveiled," Madigan's spokesman, Steve Brown, said Tuesday evening. "We're continuing to work the roll call to try to pass the bill."

Emanuel's office said Monday the legislation "can move forward" now that concerns from labor leaders and lawmakers have been addressed.

"I reject the false choice between allowing the pension funds to go belly up, delivering thousands of pink slips to city workers, or enacting a massive property tax increase. This plan will secure these pension funds while ensuring the taxpayers don't have to shoulder the burden alone," the mayor said in a statement.

In addition to lawmakers' concerns, the move comes the same day as Gov. Pat Quinn told reporters the property tax was a "lousy" way to solve the city's pension crisis.

"We're not going to go that way," he told reporters, adding that Chicago officials "need to be a whole lot more creative."

Quinn, who is making a re-election bid against Winnetka businessman Bruce Rauner, made property-tax relief a cornerstone of his state budget plan, unveiled late last month. The governor also wants to make permanent what had been planned to be a temporary increase in the state income tax.

The amended plan also softens the blow of the overhaul on retirees earning the least. According to the new proposal, retirees earning less than $22,000 annually would be guaranteed a cost of living increase of 1 percent of their original annuity, regardless of inflation.

The Personnel and Pensions Committee, controlled by Democrats, last Wednesday voted 6-4 to send the proposal that would include hiking property taxes to the House floor.

The changes likely could place the legislation on a fast track, which Moody's Investor Services said Monday will improve the city's financial outlook, but not will permanently solve its problems.

The agency downgraded the city's credit rating last month.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.