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Illinois Governor Vetoes Bill to Ease Chicago Pension Payments

Image: Illinois Governor Vetoes Bill to Ease Chicago Pension Payments
Illinois Gov. Bruce Rauner (Photo by Scott Olson/Getty Images)

Friday, 27 May 2016 07:33 PM

Illinois Governor Bruce Rauner vetoed a bill on Friday that would have enabled Chicago to spread out pension payments to its public safety workers' pensions, saving about $220 million for the city's current budget.

The veto marks the second pension setback for Chicago. The Illinois Supreme Court in March tossed out a 2014 law aimed at saving the city's municipal and laborers' retirement systems from insolvency.

"This bill continues the irresponsible practice of deferring funding decisions necessary to ensure pension fund solvency well into the future," the Republican governor said in his veto message.

The bill would alter a 2010 state law that boosted payments to public safety worker pensions in order to reach a 90 percent funded level by 2040. Under the law, Chicago's payment jumps to nearly $834 million this year from just $290.4 million last year, according to city figures.

The vetoed legislation would have reduced the payment to $619 million and allowed for smaller increases through 2020 than under the 2010 law, as well as lengthened the time frame for the police and fire funds to become 90 percent funded to 2055.

Chicago Mayor Rahm Emanuel's fiscal 2016 budget, approved by the city council in October, assumed the bill's enactment by lowering the city's contribution to police and fire pensions by about $220 million. The council also approved a $543 million phased-in property tax exclusively for the two retirement systems.

Emanuel blasted Rauner for the veto, accusing him of forcing another tax hike on city residents "and using them as pawns in his failed political agenda."

State assistance for Chicago and its financially troubled public school system has become entangled in an impasse between Rauner and Democrats who control the legislature.

While mayoral aides hinted at a push for an override of Rauner's veto, such a move faces long odds of succeeding as the measure failed to achieve a veto-proof majority in the Illinois House, which passed the bill in a 65-42 vote. Seventy-one House votes are required to override a gubernatorial veto.

© 2017 Thomson/Reuters. All rights reserved.

 
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Illinois Governor Bruce Rauner vetoed a bill on Friday that would have enabled Chicago to spread out pension payments to its public safety workers' pensions, saving about $220 million for the city's current budget.
illinois, bruce rauner, vetoes, chicago, pension, bill
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2016-33-27
Friday, 27 May 2016 07:33 PM
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