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Pension reform plan for Chicago parks no model for IL

By   /   November 13, 2013  /   No Comments

By Benjamin Yount | Illinois Watchdog

SPRINGFIELD, Ill. — While lawmakers once again decided not to fix Illinois’ worst-in-the nation pension systems, the

PATH NOT TEMPLATE: Illinois lawmakers can fix local pensions, just not their own.

Legislature approved a measure revamping pension plans for workers in Chicago’s park district.

Under that plan, people would work until at least age 58 — up from 50 — and workers would pay 12 percent of their retirement costs — up from 9 percent. The park district would  pay more, and cost-of-living adjustments for pensions would change.

But don’t read too much into the vote, state Rep. Elaine Nekritz, D-Northbrook, said.

“It’s a path (to pension reform) but not a template,” Nekrtiz, who is leading the pension reform push in the Illinois House, told Illinois Watchdog. “This is more (a path) for local systems — Chicago, Cook County, downstate police and fire (pensions).”

Nekrtiz said the Chicago Park District worked-out the numbers, talked with its workers and brought the proposal to Springfield.

Nekritz sees the “local first” approach as a model for other pensions systems.

“The park district worked with its employees to make it fit into their budget.”

Illinois pension committee is looking at state pension reform in terms of how retirements fit into the $36 billion annual spending plan, he said. “This question, for me, has never been, ‘How I am going to impact benefits?’ This has to be about,‘How can I balance a budget?’”

Taxpayers should worry if the Chicago Park District model is indeed “best” for the budget, said Ted Dabrowski, vice president of policy for the Illinois Policy Institute.

TAX HIKE HEAVEN: Dabrowksi says the Chicago Park District pension fix is chock full of tax increases.

TAX HIKE HEAVEN: Dabrowksi says the Chicago Park District pension fix is chock full of tax increases.

“There’s quite a few tax increases in (the plan),” Dabrowski said. “There are provisions that require two, $12.5 million contributions from the park district, an additional contribution of $50 million in 2019, and it increases the Chicago Park District contributions by almost three times between today and 2019.”

This attempt at pension reform carries little actual “reform,” Dabrowski said.

“The problem with this is, it is asking both taxpayers and current employees to put in more to a system. But they fail to fix the system,” Dabrowski said. “We’re just putting in good money after bad.”

Dabrowski and the Illinois Policy Institute say the only true pension fix is switching from defined benefit pensions to a 401(k)-type system.

Taxpayers can can get an idea about who may support statewide pension reform by looking at which lawmakers voted for park reforms, Dabrowksi and Nekrtiz say.

Democratic House Speaker Mike Madigan and Democratic Senate President John Cullerton supported the park district plan. The lawmakers have been at odds over how to solve Illinois’ state pension crisis.

Gov. Pat Quinn is a wild card. His sole job, he has said, is fixing the pension crisis, and the park district plan is on his desk. But his office hasn’t said whether he would sign it.

Contact Benjamin Yount at BYount@Watchdog.org and find him on Twitter @BenYount.

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