Rauner vetoes plan to reduce Chicago pension payments
SPRINGFIELD, Ill. (AP) - Gov. Bruce Rauner vetoed a plan Friday that would reduce Chicago's payments to its police and fire pension funds for each of the next five years, calling it an irresponsible idea that will increase pension debt in the long term.
"The cost to Chicago's taxpayers of kicking this can down the road is truly staggering," Rauner said in his veto message to lawmakers. He added that actuary estimates show delaying payments for the two pensions will cost a combined $18.6 billion by 2055, when the legislation would require a 90 percent funding level for each.
Mayor Rahm Emanuel said after the veto that the Republican governor "just told every Chicago taxpayer to take a hike." He said Rauner's action will force a $300 million property tax increase, which he derided as "the Rauner Tax" on Chicago residents.
"Decades from now, the Rauner Tax will be this governor's legacy in Chicago," Emanuel said in a statement.
The veto comes during a time of heightened bitterness between Rauner and Democrats at the state Capitol who backed the plan. With an epic impasse over a state budget now in its 11th month, Rauner and Democratic leaders appear any closer to reaching an agreement that would end their stalemate. Lawmakers are finishing this year's session Tuesday with social service providers and colleges and universities facing more cuts, and public schools anxious about whether they'll have funding to open for the next academic year.
When they approved the pension plan last year, Democrats said it would save the retirement funds without crushing taxpayers.
Chicago's payments to the funds are set to jump to $840 million this year, up from $300 million. The legislation would have set the 2016 payment at $619 million. The proposal also would extend the timeline for reaching a 90 percent funding level for the funds from 2040 to 2055.
Rauner said doing so would continue "irresponsible funding decisions" that have led to the state's deep financial woes.
"It's a game politicians like to play with taxpayers' dollars by delaying payments today and forcing future elected officials to deal with pension funding issues tomorrow," Rauner said.
Illinois' state pension funds are underfunded by $111 billion.
Burnett reported from Chicago.