TIME IS RUNNING OUT FOR GOV. QUINN TO SIGN CHICAGO PENSION RELIEF BILL

That was good enough for lawmakers to pass the bill, but it wasn’t good enough for Gov. Pat Quinn to sign it into law. He has taken his time considering the bill. Now Quinn has until Monday to sign it or it goes down as a veto and Chicago faces a longer road toward pension relief.

Chicago needs Quinn to sign the bill, according to Laurence Msall, President of the Civic Federation, in an op-ed he wrote in the Chicago Tribune.

Writes Msall:

State legislators left Springfield last weekend with very little to show for their disappointing efforts this year. Police and fire pension funds are still in danger of insolvency. A pension bill negotiated by Cook County and several of its unions stalled in the House.  The legislature failed its most fundamental responsibility: It passed a budget that does not have adequate funding for a full year.  Our representatives are still ignoring the urgency of Illinois’ fiscal crisis.

Gov. Pat Quinn has a chance to salvage part of this year’s session by signing Senate Bill 1922 before a Monday deadline. This bill to stabilize Chicago’s municipal and laborers pension funds was negotiated by city leaders, endorsed by several unions and approved by the House and Senate.  Both funds are dangerously close to being unable to pay pension and health care benefits for retirees.  These two funds, which represent more than half of all city employees, could be insolvent within the next decade. That’s an unthinkable prospect.

This legislation represents a critical step by the City of Chicago to address its worst-in-the-nation pension funding crisis. Even if this bill becomes law, the city will need to deal with more challenging crises facing the police, fire and teachers’ pension funds. Similar crises are now playing out in communities across the state. In some, the entire property tax levy is consumed by pension funds.  

By signing the reforms negotiated by Chicago, the governor can send a strong message that he is prepared to be a partner with local governments in resolving this crisis.

A veto would send an entirely different message. It would tell Illinois businesses, citizens, employees and retirees that our leaders are gridlocked on the most critical issue facing the state. It would create more uncertainty for the state and local governments. It would have a negative impact on our business climate. It would hurt our credit worthiness.

The city’s credit worthiness already is sorely lacking. Moody’s has downgraded the city multiple times, and now is recommending ways the city can start fixing the situation even if Quinn vetoes the pension bill.

From the Chicago Sun-Times editorial board:

Moody’s Investors Service floated a backward idea this week.

The credit-rating agency shared this with the Sun-Times’ Fran Spielman: Mayor Rahm Emanuel could go ahead and raise city taxes (and/or cut expenses) to pay massive pension bills even if Gov. Pat Quinn vetoes a bill that cuts those pension costs to a more manageable size.

Quinn has until Monday to act on that bill, which reduces benefits in two of the city’s four grossly underfunded retirement systems.

In other words, Emanuel could do exactly what he wisely has said he would not — raise revenue without also cutting pension costs.

Here’s a much better idea: Sign the pension bill, Gov. Quinn.

Then, and only then, can Chicago get cooking on raising new revenue and cutting expenses. Moody’s analysts are right when they say the mayor and the City Council can — and should — raise revenue. An honest assessment of Chicago’s finances yields no other conclusion. Moody’s didn’t drop Chicago’s credit rating by four notches in eight months for nothing. The city risks another downgrade if Quinn vetoes Chicago’s pension bill, which would increase Chicago’s borrowing costs.

But if Chicago feeds the pension beast with new revenue first, the odds of ever passing another pension reform bill in Springfield drop off a cliff.

That’s why Emanuel started off by pushing for a pension bill in Springfield.

And he succeeded, a Herculean task that featured buy-in from some of the city unions.

Quinn spent years — agonizing years — trying to reform the state’s pension systems before a bill finally passed last December. It would be more than hypocritical for Quinn to veto a similar bill that Emanuel pushed for Chicago.

While legislators in Springfield did pass the Chicago pension relief bill, critics around the state are not fond of the state budget they passed. Perhaps for these reasons:

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Brendan Bond is a staff writer at Reboot Illinois. He is a graduate of Loyola University, where he majored in journalism. Brendan takes a look each day at the Land of Lincoln Lowdown and it’s often pretty low. He examines the property tax rates that drive Illinoisans insane. You can findReboot on Facebook and on Twitter @rebootillinois.