Nothing threatens more to hold Chicago back than its underfunded public employee pensions, with the current shortfall totaling some $28 billion.
The potential for new local taxes to meet those pension obligations — including the possibility of an extra $1 billion in the next three years — might be devastating to home and business owners, both of whom have seen their property taxes go up multiple times in recent years.
And don’t forget Chicago has a long list of financial needs beyond pensions, including additional funding to improve the Chicago Police Department.
On Friday, Crain’s Chicago Business broke the news, based on anonymous sources, that Lightfoot had a plan for state government to take over the city’s pension funds, combining those funds with those of municipalities across the state. The underlying argument was that the state, which limits how municipalities can deal with pension problems, is in a better position to devise solutions.
But when the Sun-Times first asked Lightfoot about that proposal, she had virtually nothing to say. And after a meeting with Lightfoot on Saturday, Pritzker was circumspect. “We continue to have a good dialogue,” the governor said. “And as I’ve said, we want to be as helpful as we can in the process.”
The two leaders seemed on different pages.
But, thankfully, on Monday, Lightfoot and Pritzker seemed more like the people Chicagoans and Illinoisans elected, talking openly about the pension issue after a joint appearance.
Pritzker said a state takeover of municipal pension funds isn’t feasible right now because it might drive the state’s credit rating — which helps establish the interest rates the state pays to borrow money — into junk status.
Lightfoot seemed to abandon a state takeover, instead focusing on the idea of asking Pritzker and the Legislature to empower the city to broaden its sales-tax umbrella to include high-end professional-service providers such as attorneys and accountants.
Lightfoot also made clear that “a number of different options” were being considered regarding pensions, that she had “no definitive plan” for pension relief, and would make no specific “revenue ask” of the governor until she cuts more fat from the city budget.
When it comes to pensions, the more options the better. And we applaud Lightfoot and Pritzker for wanting to do the heavy lifting on this one right away.
Here’s hoping they pull together on this and a host of other big issues.
Chicago and the rest of Illinois are in this together.
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