STUMP » Articles » Public Pension Watch: Rahm's Do-Over? » 9 April 2014, 01:37

Oh look who’s backing down.

Mayor Rahm Emanuel and House Speaker Michael Madigan Monday stripped out controversial language from city pension legislation that had authorized the City Council to impose a property-tax hike, putting the stalled measure back on the fast-track at the state Capitol.

The move came just hours after Gov. Pat Quinn made clear he was not on board with Emanuel’s earlier proposal to hike property taxes as a way to solve a looming pension crisis in Chicago and after a Wall Street bond-rating agency warned that even with the property-tax language, the legislation was not a “panacea” to solve all of the city’s pension woes.

Madigan, D-Chicago, filed an amendment to Senate Bill 1922 after the House adjourned Monday without taking any action on the stalled legislation. Sources now expect the legislation to be voted upon as early as Tuesday.

Yeah, we’ll see about that.

We already saw that the reaction was pretty negative to the original proposal, but I’m not sure stripping out the extra tax part really helps things all that much.

Get a load of this bullshit:

“I reject the false choice between allowing the pension funds to go belly up, delivering thousands of pink slips to city workers, or enacting a massive property tax increase. This plan will secure these pension funds while ensuring the taxpayers don’t have to shoulder the burden alone,” the mayor said.

Uh huh.

Whatever.

Anyway, it doesn’t seem that many outside parties are playing along

Chicago’s plan to stabilize two pension funds is a step forward though “not a panacea” for unfunded retirement liabilities in the nation’s third-most-populous city, Moody’s Investors Service said.

The company called the proposal modestly credit positive in a report issued today. Chicago’s general-obligation rating remains at Baa1, three levels above noninvestment grade.

“Even with reform, pensions will continue to weigh heavily on Chicago’s credit quality,” Moody’s said, noting the proposal pending in Springfield, the capital, doesn’t cover the police and fire retirement plans.
…..
Chicago had its general-obligation grade cut to three levels above junk last month by Moody’s. Excluding bankrupt Detroit and Stockton, California, that’s the lowest among the 90 biggest U.S. cities, data compiled by Bloomberg show.

Yeah, and that’s before the tax part was stripped out. I suppose extra contributions are supposed to magically appear.

Let’s check out comments from elsewhere

Hours later, a new version of the pension bill surfaced in Springfield. The latest revision no longer requires the city to create a separate “pension stabilization levy” solely dedicated to increasing payments to the municipal and laborers pension funds that serve nearly 57,000 workers and retirees.

The measure states that the city make the additional payments with property tax revenue or “other lawfully available funds.”

Still in the bill are two provisions to penalize the city if it does not make the pension payments. The state comptroller would be allowed to divert millions of dollars in annual state payments away from the city and into the pension funds a provision that was made stronger in the most recent version.

The proposal also spells out that pension boards could sue to get the state to divert millions in city funding to the pension funds.

Ha ha.

Really.

Oh wait, what’s this new thing?

The latest version also includes a new provision that would allow Emanuel to change the makeup of the two retirement boards that oversee the laborers and municipal funds. It would terminate the terms of current members next year and allow the mayor to recommend how new members of the board should be appointed.

Anybody smell a bit of … oh, possibilities for Friends of Rahm?

Stay tuned. We’ll see if it actually gets voted on today.

THIS IS WHAT COMES FROM PRE-WRITING POSTS: Evidently, the new improved version did get rushed through the assembly

Controversial legislation that would change the retirement benefits of some City of Chicago employees raced through the state legislature on Tuesday and is now headed for Gov. Pat Quinn’s desk.

The plan, backed by Chicago Mayor Rahm Emanuel, cleared the State House of Representatives on a 73-41 vote. A few hours later, it passed through the State Senate on a 31-23 vote. Gov. Pat Quinn has not said whether he’ll sign the plan, which is opposed by several powerful city workers’ unions because it scales back benefits for retirees.

It’s in Quinn’s court now. Remember, Quinn is up for re-election this year. But he has cover in his Republican opponent, who has made cutting pensions part of his platform.

But the unions could say they’re taking their ball and going home.

So we shall see.

Compilation of Chicago posts.