This article discusses the significant challenges City of Chicago pension funds still face after Illinois legislators passed pension reform legislation on December 3 that applies only to the State of Illinois pension funds. The Civic Federation said State policies have led to the severe underfunding of Chicago-area pension funds, and the City must continue to petition State legislators for reforms tailored to the needs of the City funds.
In 2011, as part of its FY2012 budgeting process, the Metropolitan Water Reclamation District (MWRD) Retirement Board proposed legislative initiatives for pension funding reform, with the support of the MWRD Board of Commissioners.[1] In its FY2012 budget analysis, the Civic Federation supported the MWRD’s initiative to seek pension funding reforms. The legislation increases the contributions to the pension fund for Tier 1 employees hired before January 1, 2011 and the employer contribution…
In an analysis released today, the Civic Federation announced its support for the Chicago Park District’s proposed FY2014 budget of $425.6 million which continues the District’s multi-year effort to reduce its structural deficit. The proposal leaves the District well-positioned to implement the comprehensive pension reforms passed by the Illinois General Assembly in November 2013 and now awaiting the Governor’s review. “We applaud the Chicago Park District for thoughtfully combining…
The Civic Federation supports the $425.6 million Chicago Park District budget for continuing the District’s multi-year effort to reduce its structural deficit. The proposal includes a broad-based property tax increase after eight years of relatively flat levies for the District. It also leaves the District well-positioned to implement the comprehensive pension reforms passed by the Illinois General Assembly in November 2013 that are now awaiting the Governor’s review. The District's pension…
Legislative action on reducing the State of Illinois’ massive pension obligations could come as soon as next week, but the details of the latest pension reform proposal and its potential impact on the State’s financial condition have not yet been made public. On November 25, Illinois House Speaker Michael Madigan’s staff reportedly notified House members that they will be back in session on December 3, 2013. The Senate has not yet set a return date. The Illinois General Assembly has been in…
UPDATE: On January 7, 2014, Governor Pat Quinn signed Senate Bill 1523 into law. The provisions of Public Act 98-0622 will go into effect starting January 1, 2015. Original blog post published on November 20, 2013 On November 6, 2013, the Illinois House passed Senate Bill 1523, House Amendments 3 and 4 and the Senate concurred with the changes the next day. The bill contains a number of provisions aimed at stabilizing the Park District’s underfunded pension fund and bringing the funded…
This article discusses the City’s practice of “scoop and toss,” which refunds bonds to reduce current year payments by pushing off large principal debt payments to future years and increasing the total cost of borrowing. The Civic Federation’s FY2014 City of Chicago Budget Analysis recommends that the City update its debt management policy to require level debt service payments for new bond issuances in order to prevent backloading of principal.
Pension Contribution Increase in FY2015 Threatens to Derail Fiscal Progress In a report released today, the Civic Federation announced its support for the City of Chicago’s proposed $7.0 billion budget as a reasonable short-term plan that continues to reduce the City’s structural deficit. However, Chicago’s fiscal and economic stability continue to be jeopardized by the failure to fix the City’s broken pension system. The full 111-page analysis is available at www.civicfed.org. “This budget…
The Civic Federation supports the City of Chicago’s proposed $7.0 billion budget as a reasonable short-term plan that closes approximately two-thirds of a $338.7 million budget gap with structural changes that will continue to reduce the City’s ongoing deficit. To help balance the FY2014 budget, the City proposed an increase in the City’s cigarette tax rate, a reduction in the partial exemption from the amusement tax for cable companies and targeted rate increases for fines and permits.…
On October 25, 2013, Moody’s Investors Service downgraded the CTA’s bond rating to A1 from Aa3 and lowered its outlook to negative from stable. This makes it the seventh Chicago-area government or government agency to have been downgraded since July. In describing its concerns, the ratings agency cited the financial condition and recent credit rating downgrades of the City of Chicago, Cook County and the State of Illinois as placing negative pressure on the CTA’s financial position. Moody’s…
