Pension reform, not more liabilities
As our state's residents and business community contend with the worst public health and economic crisis in generations, another looming challenge waits in the wings. Our state's unfunded pension liabilities have burdened Illinois' financial standing for years, and if legislation from January's lame duck session becomes law, it could get much worse.
House Bill 2451 would expand annual cost of-living-adjustments for Tier 1 Chicago firefighters pensions, increasing the already worst-funded pension in Chicago at 18.4% and resulting in additional payments between $18 million and $30 million per year, totaling up to $850 million through 2055. This will add to the slippery slope of pension sweeteners that have saddled state and city pension funds with more than $200 billion in unfunded pension liabilities. The police pension will not be far behind, at up to three times the cost.
This will lead to further property tax increases on top of the most recent $94 million increase included in the FY 2021 Chicago City budget. Rising pension costs already result in less revenue available for important initiatives, including education and workforce development. Can our economic recovery afford this?
Proponents suggest that this just codifies a common practice, but once signed into law, you can never go back. This is an unsustainable path for Illinois residents and our business community, which has experienced mass layoffs and business closures as a result of the pandemic. For this reason, we urge Gov. Pritzker to veto this bill and seek out real, comprehensive pension reforms that will provide relief to our citizens and businesses by encouraging growth, fostering job creation and providing fiscal stability. It is time to come together and find solutions that ease the tax burden placed on all taxpayers.
Jack Lavin, President & CEO
Chicagoland Chamber of Commerce