Chicago Confident In Legality of Pension Reforms As Emanuel Lays Out “Roadmap” For Healthy Budget


Chicago Mayor Rahm Emanuel on Wednesday laid out a series of fiscal reforms that are designed to dig the city out of its budget hole and bring “fiscal sanity” to the city’s financial practices.

But much of Chicago’s fiscal fate depends on the legality of the pension reforms the city levied on its Laborers and Municipal pension funds in 2014.

Emanuel said he was confident in the legality of the changes.

From the Sun-Times:

Emanuel argued again Wednesday that the city is standing on more solid legal ground.

“Unlike the state, we negotiated with our labor partners. That’s a big deal. We negotiated with our unions. Big difference. Second, we’re not making cuts. By preserving and protecting the pension, it will continue to be a pension,” the mayor said.

“We believe that ‘preserve and protect’ of the actions we’re taking is consistent with the direction and words of the Constitution, which we think we’re fundamentally different than what the state did.”


The mayor acknowledged Wednesday that those reforms he’s in the process of negotiating with police and fire unions will not produce nearly as much savings as there were in the other two city pension fund deals.

“As it relates to public safety, they do not have the same type of COLA [cost-of-living adjustment] that the Laborers and Municipal have. So, the type of savings that you would see there don’t exist,” the mayor said.

Emanuel seemed to indicate the even if the Supreme Court overturns the state-wide reform measure passed in 2013, the city’s own set of reforms would still be safe.

That’s because the city negotiated with unions before implementing the reforms, and the cuts are less drastic.

Regardless of the court decision, Chicago is on the hook for a $550 million lump-sum payment to its public safety pension funds. That bill comes due in December.


Photo by Pete Souza via Flickr CC License

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