The Illinois Policy Institute’s lead pension expert, Vice President of Policy Ted Dabrowski, released the following statement today regarding the pension bill passed by the Illinois legislature for the Chicago Park District pension fund:
“Today the state legislature passed a pension bill aimed at putting more money in the pension fund for employees of the Chicago Park District. This bill is mistakenly being heralded as a potential model for statewide pension reform. Make no mistake: This bill is bad for Chicago taxpayers, bad for the people who work for the Chicago Park District and it should not be used as a model for statewide pension reform. This bill will most likely result in higher taxes and fees for city residents, but no greater level of retirement security for Chicago Parks workers.
“According to a September report by the Illinois Policy Institute, the Chicago Park District has more than $1.4 billion in official long-term debt. This includes $40 million in debt related to retiree health care, $426 million in pension debt and $944 million in other long-term debt. Big problems require bold solutions.
“Unfortunately the bill passed today by the Illinois legislature does not adequately reform the Chicago Park District’s troubled pension system. It fails the litmus test for reform because it does not fundamentally change the way that the pension system is run.
“Here are some reasons why this bill is bad for taxpayers and bad for workers:
- Tax hikes for city residents: This bill requires taxpayers to pay an additional $75 million into the Chicago Parks District’s pension fund, in addition to tripling the annual taxpayer contribution to the fund.
- Forces workers to keep paying into a broken system: This bill gradually increases how much money Chicago Park District workers pay into the pension system to 12 percent of their paycheck, up from 9 percent. Illinois lawmakers are wrongly forcing workers to pay more money into a near-insolvent system.
- Keeps retirement age too low: The retirement age for private sector workers is 67; the retirement age for the majority of Chicago Parks workers, under this bill, would be 58. While a limited number of Chicago Parks workers would see a higher retirement age, any pension reform bill that actually fixes the public retirement system will match the government retirement age to the private sector retirement age.
“The bottom line is that with today’s actions, lawmakers in Springfield cemented higher taxes and fees on Chicago residents. They are continuing to paper over the pension problem and refusing to tackle it head on. Taxpayers deserve better, and Chicago Parks workers also deserve a retirement system that they can control. Workers shouldn’t be forced to abide by the whims of politicians.”