Tier 2 bill causes the fissure separating Mayor Johnson and Governor Pritzker to widen
Extremist, left-wing Chicago Mayor Brandon Johnson is on the political attack again, but this time it is against his usual lockstep ally, Democrat Governor JB Pritzker, and it's all about Chicago's pension bomb.
Johnson is suddenly hopping mad over the state legislature's recent pension bill Pritzker signed into law that puts Chicago on the hook for an additional $11 billion in new pension payments over the next 30 years.
A few months ago, as the legislative session was nearing its end, lefty Democrats pushed out House Bill 3657, a pension sweetener bill for Chicago's policemen and firefighters. Unsurprisingly, the spendthrift legislature dominated by Democrats who spend money like drunken sailors, passed the bill. And Pritzker was gleeful to sign it into law despite the disastrous effects it will have on the exploding pension bomb.
The law will cost Chicago $52 million in its first year and by 2055 will add $11.1 billion to accrued liabilities.
Of course, Chicago already has no money to pay for its ruinously, overpromised pensions as it is, and Johnson is now blasting Pritzker for signing this new law adding a billion more to the city's obligations. Indeed, Johnson accused Pritzker of being weak and just caving to the left-wing legislature without even making a comment on the huge hike in spending.
"Now look, my team has spoken extensively with the General Assembly and with the Governor’s office about this obligation. Look, I get the position that the governor was in. This was a veto-proof majority. He was in a tough position. I understand that. I’m going to continue to work with the governor around ways in which we can generate the revenue to respond to pensions, transportation, education," Johnson said when Pritzker signed it in August.
However, Pritzker insists Johnson never said a word to him prior to the bill being signed into law.
"The mayor never once called me or as far as I know any legislators to oppose that bill or to ask for any changes in that bill," the wide-eyed governor exclaimed.
"Oh, after it passed, I know that some of the members of his administration have said, so I really don’t know that the mayor himself opposes it. What I know is that we have helped the Chicago police get fairness in their contract," Pritzker added.
The governor's office also told the media Johnson never said a word to them.
"This bill was passed with a supermajority in the legislature, and we are unaware of this input ever being given to legislative leaders. The governor's office always appreciates this kind of input earlier in the legislative process," a spokesman for Pritzker told the media this month.
However, WFLD-TV discovered at least one example of the city warning the governor's office HB 3657 was a disaster for Chicago.
In a memo, Johnson’s Chief Financial Officer Jill Jaworski had told Pritzker's office the bill has no funding mechanism and will drive the police and fire pension funds to the point of insolvency.
Johnson says this memo proves he and his people did, indeed, warn Pritzker against signing the bill into law.
The fact that these two monumental wasters of tax payer's money are at each other's throats over the law is hilarious enough, but the bill's sponsor, Chicago area Democrat State Senator Robert Martwick, laid the blame on Chicago from the beginning because the city put so many police and firemen hired after 2011 in what was called a "Tier 2" pension plan which defied IRS rules that requires pensions to be equal to or greater than Social Security.
"Those numbers exist whether or not we pass the legislation. Tier 2 is insufficient, according to the federal government, and it needs to be fixed," the senator said.
Regardless, the city's pensions are a disaster. In September, Johnson had to step in with a $28 million check of city money to help the Firemen’s Annuity & Benefit Fund of Chicago pay current retirees because the system has no cash surplus in its accounts to cover its current obligations.
The city has more than $35 billion in pension debt and a credit rating at near junk status. The crisis is worse than that of 44 other states, and it is getting worse by the month.
For an example of how bad it is for the city and its residents, 80 percent of current property tax revenue goes straight to pensions and almost every penny of each property tax hike since 2014 has been eaten up by pensions. And it has to be reminded Chicago businesses already pay the highest property taxes in the nation and homeowners also have some of the highest residential taxes in the country.
Only one pension is even funded past 50 percent, with the Chicago Transit pension funded at 52.5 percent. The rest are all under 47 percent with the police, firefighters and municipal workers sitting at under 29 percent each.
The only action that can begin to right this sinking ship is to change the Illinois Constitution to jettison its disastrous Article XIII, Section 5, which was adopted in 1970 which states membership in any public pension system is an enforceable contractual relationship and cannot be diminished from whatever it currently offers in payouts to members.
That clause coupled with constant hikes generously dolloped onto the payouts, including spendthrift Republican Gov. Jim Edgar's infamous " Edgar ramp," and we are left with a disaster that will — not might — lead to 100 percent insolvency for every public employee pension in the city and state.
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