Emanuel's Plan To Fund Pensions: Amending The State Constitution
CHICAGO (CBS) -- In the next few years, Chicago will need almost a billion dollars more to pay for city pensions and one plan involves changing the state constitution.
In a major speech before the Chicago City Council, Mayor Emanuel said it was time to pay up.
"Leaders in the past made commitments without the resources to back them up. And now, inevitably, the bill has come due," Emanuel said.
The mayor touched the third rail of Democratic politics in Illinois: pensions.
"You are not going to solve this problem just with more money from taxpayers," Emanuel said. He proposed changing the Illinois Constitution, which guarantees three per cent cost of living raises to government retirees. A change pro-business groups said is needed.
"If you don't figure out a way to stabilize our government so we can rise in terms of our credit rating, you're not going to have money for other things. It's all going to go into our pension system going forward," said Laurence Msall of the Civic Federation.
In 2020, Chicago needs 276 million for police and fire pensions. And in 2022, another 310 million for municipal pensions. But the reaction from big labor is no.
"I will fight to protect the Illinois Constitution and not amend it," said Bob Reiter of the Chicago Federation of Labor. He blames politicians, not workers, for underfunding pensions in first place.
"Don't point fingers at everybody else. This is government's responsibility. The workers paid their amount," Reiter said.
And Emanuel may have a tough time with political support. The Chicago City Council Progressive Caucus opposes it. So do most mayoral candidates looking to succeed him. And incoming Illinois Governor J.B. Pritzker is against it.
Emanuel insisted he's being miscast.
"I'm trying to save the pension and every labor leader, privately, who deals with the private sector known that this is the only way to keep a pension system vibrant and vital," Emanuel said.
Mayor candidate Bill Daley does support changing the state constitution on pensions. Emanuel also proposed borrowing 10 billion dollars to infuse into pension funds hoping to save Chicago taxpayers millions by lowering the interest rate on pension debt.
Some call that risky, but it's the new mayor who will decide whether to embrace that strategy.