A bill aiming to improve the funding levels of two distressed Chicago pension funds breezed through the Illinois Senate on Monday.
But Gov. Rauner promptly sounded off on the bill, expressing his dissatisfaction and signalling a likely veto.
The bill aims to boost funding of two Chicago pension funds by increasing the contribution rates of new workers. Recently hired workers (post 2011) would have the option of increasing their contribution rates in exchange for an earlier retirement age.
From the Chicago Tribune:
Under the mayor’s proposal, newly hired employees would start paying 11.5 percent of their salaries toward their retirement, which is 3 percent more than current employees. In later years, that amount could be reduced if an independent number cruncher agreed that less was needed to meet the city’s goal of having 90 percent of the assets needed to pay benefits over the next 40 years.
Employees hired from 2011 to 2016 already receive lower retirement benefits, and would have the option of increasing their contributions to 11.5 percent. In exchange, they would be eligible to retire at age 65 instead of 67. Employees hired before 2011 would see no changes.
But Rauner expressed his dissatisfaction with the bill on Tuesday. From Reuters:
“The bill essentially authorizes another property tax hike on the people of Chicago and sets a funding cliff five years out without any assurances that the city can meet its obligations,” Rauner spokeswoman Catherine Kelly said in a statement. “The governor cannot support this bill without real pension reform that protects taxpayers.”
Under normal circumstances, the state House and Senate — which overwhelmingly approved the bill — could overturn a Rauner veto.
But the new class of lawmakers are sworn in on Wednesday and a new session begins. This group won’t have the power to overturn a Rauner veto; they’d have to start from scratch.