STUMP » Articles » Public Pensions Watch: Chicago Reform Blitzkrieg? Ha Ha, FAIL » 4 April 2014, 01:46

Where Stu & MP spout off about everything.

Public Pensions Watch: Chicago Reform Blitzkrieg? Ha Ha, FAIL  

by

4 April 2014, 01:46

Yesterday I laid out the basics of a proposed pension “reform” from Rahm Emanuel, mayor of Chicago.

I did say that today I would write about reaction to the proposal, but in the interim I missed there was a lightning attempt to ram the crap through the Illinois legislature before anybody could react.

Ha ha, nice try, Rahm. You’re dealing with a bunch of Illinois politicians (and Illinois public employee unions). Did you think you’d actually be allowed to do this?

Some detail on what happened:

In a development laced with political intrigue, Mayor Rahm Emanuel’s plan to reel in city pensions stalled in the Illinois House Wednesday despite Speaker Michael Madigan’s prediction of a floor vote after it had cleared a House committee earlier in the day.

While not dead, the package affecting the city Municipal Employees and Laborers funds hit several unexpected snags, starting with Republicans.

The GOP, supporters of past pension deals in Springfield, positioned itself against this one, touting Emanuel’s plan as a de facto $750 million property tax hike even though the city had advertised a property-tax hit of just one third of that amount.

Madigan, D-Chicago, steered the legislation through the House Personnel and Pensions committee Wednesday morning and told reporters after the panel’s 6-4 vote that he intended to seek a vote of the full House later in the day. In a closed-door caucus meeting immediately after the committee vote, the speaker told his members the same thing, sources said.

Early Wednesday evening, Madigan spokesman Steve Brown shed little light on the reasoning behind the abrupt change of plans but declined to pronounce the legislation dead. He offered no sense of when the measure might surface on the House floor for a vote.

….
“I’m not sure I fully understand all that’s transpired,” Brown continued. “You had a variety of different positions by Republicans from ‘We’re all for this’ to ‘We have no votes’ to ‘Maybe we have a few votes.’ Obviously, it would be good to have a good, bipartisan roll call.”

Let me explain this.

Republicans, even Illinois Republicans, are not entirely stupid.

Something in the bill that was a sure thing: tax hikes.

Remember that ‘temporary’ income tax hike that Gov. Quinn now wants to make permanent?

If the tax hike went through, that would be looked on as a permanent level. That wasn’t going to be coming down.

Madigan’s legislation would authorize the City Council to levy $50 million more during each of five years, starting in 2016, to devote toward city pension costs. By year five, that tax levy would stand at $250 million more than today, but Republicans added up all of the revenue collected during that period and dubbed Emanuel’s handiwork as a $750 million property-tax increase that they wanted no part of.

“A $750 million property tax-increase is the last thing we need in Illinois,” said Rep. David McSweeney, R-Barrington Hills, who voted against Madigan’s legislation in committee. “This is outrageous. This is going to kill jobs. I oppose this tax increase.”

All the pension/total benefit cuts — could be undone at any time. This has also happened before in many places.

Finally, there is the matter of the unspecified source of funds to pay for the step up in contributions.

Oh yeah, that bit.

This bill was not worth the effort of ramming stuff through. As one of Rahm’s own allies mentioned

Ald. Patrick O’Connor said the mayor’s idea of raising property taxes and cutting retirement benefits to fund the retirements of laborers and municipal workers may solve a hefty chunk of the city’s pension problem, but it doesn’t address the $600 million in additional pension payments state law requires the city to make to its police and firefighter funds next year.

This is not a serious approach to trying to fix the problem. Rahm thought he could bring Pelosi-style tactics to Illinois, declare a quick “Mission Accomplished”, and then move on to the next target.

Nice try, you bozo.

Compilation of Chicago posts.


Related Posts
Cook County Soda Tax: Persuasion and Comparisons - Why Not Tax Juice?
Public Pensions Interest Group Says: Your Money Creates More Value With Us!
Happy Idea: Moving from Defined Benefit to "Defined Ambition"