Illinois passes state law giving pension boost to one Chicago alderman
State lawmakers overrode Gov. Rauner’s veto of a bill that allows one former firefighter serving as a Chicago alderman to credit his political salary toward a more lucrative fire pension. The pension boost will also apply to future aldermen with a history of fire department work.
State lawmakers extended an exclusive pension boost to one Chicago alderman.
On Nov. 28 the Illinois Senate voted 44-1 to override Gov. Bruce Rauner’s veto on House Bill 5342, turning the bill into law. State Sen. Jim Oberweis, R-Sugar Grove, was the only senator to vote against the bill.
Lawmakers in the Illinois House of Representatives previously voted Nov. 14 to override the governor’s veto on HB 5342.
HB 5342, sponsored by state Rep. Robert Martwick, D-Chicago, provides an exclusive pension boost to Chicago aldermen who formerly worked for the Chicago Fire Department. The bill amends the Illinois Pension Code by redefining “active fireman” to include former firemen currently serving on the Chicago City Council.
The measure will exclusively benefit Ald. Nicholas Sposato, 38th Ward, but will ultimately apply to any alderman with a history of fire department work who has served on City Council for at least five years. Sposato has muscular sclerosis and uses a wheelchair.
Ald. Anthony Napolitano, 41st Ward, would be the next council member to qualify, provided he secures a second term.
Under HB 5342, applying council members have the option to forgo their municipal pension plan and instead transfer their aldermanic pension credits to the city’s fire pension system – regardless of how long they were firefighters.
The fire pension system delivers more lucrative retirement benefits than the municipal fund. But those who stand to lose are current firefighters whose retirement security is jeopardized by a severely indebted pension system, and taxpayers on the hook to cover those deficiencies.
As of fiscal year 2017, Chicago’s fire pension fund had less than 21 cents on hand for every dollar owed in benefits. In September, the Firemen’s Annuity and Benefit Fund of Chicago filed two claims with the Illinois comptroller for a combined $3.3 million shortage, alleging the city shorted it by $1.8 million in 2016 and by $1.5 million in 2017.
All told, Chicago’s combined pension debt stands at $42 billion.
Outgoing Mayor Rahm Emanuel’s solutions to the city’s pension crisis have largely consisted of massive multiyear tax hikes, including a property tax increase of $543 million, new taxes on ridesharing and e-cigarettes, tax increases on water and sewer services and 911 calls, and hikes in fees ranging from garbage collection to building permits. But those revenue increases have failed to tame the city’s pension debt. Moreover, the city’s required pension contributions are projected to more than double during the next decade.
The reforms needed to rein in growing pension costs must come from state lawmakers, beginning with a constitutional amendment, and ending with an affordable 401(k)-style alternative for all future government workers.
The determination with which state lawmakers pushed through the pension boost for just one city council body – let alone one council member – puts Springfield’s misplaced priorities on display.
Springfield’s decision to encourage participation in and increase the cost of unsustainable, defined-benefit pensions systems marks another step in the wrong direction.