Chicago’s budget deficit threatened by pension bill that awaits Pritzker’s signature

CHICAGO (WGN) — As Chicago stares down a billion-dollar budget deficit, a bill sitting on Illinois Governor JB Pritzker’s desk threatens to sink the city’s finances further into the red.  

At the center of the debate is a plan to boost pension payouts for some police and fire retirees. 

The measure is known as a “pension sweetener,” and passed the legislature at the end of the spring session with almost no public discussion. 

The bill would boost pension benefits for officers and firefighters hired after 2010 by increasing the cap on pensionable salary and the annual cost-of-living adjustment for pensioners. 

To cover the adjustment, fiscal watchdogs project Chicago taxpayers would be on the hook for $60 million in 2027 and $754 million by 2055. 

“We’re still evaluating the bill. Obviously, there is a lot to consider here,” Pritzker said Tuesday.

The presidents of the Civic Committee and Commercial Club of Chicago, the Civic Federation, and the Better Government Association all urge the governor to veto the bill, writing in the Tribune last week: “Chicago and Illinois have among the most underfunded pension systems in the entire country. Taxpayers are on the hook for a combined state and local pension tab of $459 billion, or more than $90,000 per household.”

“One thing to consider is the finances of the city of Chicago; how will they pay for it? Another thing to consider is these are our policemen, these are our first responders, and we want to make sure that they’re well taken care of,” Pritzker said.

Faced with a nearly $1 billion budget deficit, the legislation has put Chicago Mayor Brandon Johnson in a difficult spot. The former union organizer, turned elected official, says he’d like to increase fire responder compensation, but the government needs more money. 

“I’ve spoken to the legislature about my concerns about this particular bill,” Johnson said. “He’s what should or could still happen is that in our effort to secure retirement for our public employees, which is critical and constitutional, absent progressive review, it’s impossible to sustain that expectation.”

If Pritzker signs the pension bill, it’s likely that Tier 2 workers elsewhere in Illinois will also seek a pay adjustment. Sweeping pension reform stalled at Springfield back in the spring.