Mayor Rahm Emanuel on Thursday warmed to Gov. Bruce Rauner’s catch-all pension bill — and for good reason: Rauner has now embraced much of Chicago’s formula for solving a $30 billion pension crisis.
Between the lines, Emanuel seems to be saying that Rauner has backed himself into a political corner. Now that the governor is on record as supporting Chicago’s ambitious wish-list, he can’t renege without looking like he’s flip-flopping and turning his back on the city.
“The governor now is in favor of the police and fire pension [reforms]. That is a good thing. The governor is now in favor, publicly, of a Chicago-based casino to pay a portion of police and fire pensions,” Emanuel said.
“The governor is now in favor of things we have talked about for decades about equity on teachers’ pensions so students and teachers in Downstate and suburbs are not treated better than teachers and students here in Chicago. He’s supportive of some of the things we’ve proposed for Chicago Public Schools … and also the notion that the rest of the state has a role to play in creating fairnessand equity across the system where Chicago taxpayers are not responsible for paying for everybody else’s teachers pension and our pensions.”
Some Democrats in Springfield have questioned the governor’s sincerity. They’ve pointed to the bankruptcy provision that the governor has championed as the ultimate solution for Chicago Public Schools.
Emanuel said only the governor can address the question of motive. But the mayor once again made it clear that he considers bankruptcy a last — not first — resort.
“It’s the wrong thing to do. … I would oppose that. … What is driving the financial strain … is a series of political decisions that have been made over the years. That’s what you need to fix rather than go to a judge to address your bad politics and bad choices,” the mayor said.
“When I propose things, you don’t expect it to pass as proposed. You expect people to offer ideas. I would oppose the idea of bankruptcy because I think it undermines what we are trying to advance. … But there’s a lot in there that supports what we have advocated or proposed or passed one version or another.”
The mayor’s only word of caution to his old friend Rauner is the same caveat he has used throughout the budget stalemate: stop playing politics by trying to isolate and demonize House Speaker Michael Madigan (D-Chicago).
“By personalizing somehow that the speaker is the hold-up doesn’t help advance the proposal….Lower the personal temperature. Keep the conversation going and dialogue and trust building exercise so serious issues like a pension proposal can be heard without the politics getting in the way of progress,” Emanuel said.
“You try to bring people together to build a consensus. I don’t think it advances the policy … to personalize a person as the stumbling block. The policy is tough enough…I’m pleased … that the governor has proposed something. Now, it’s our job to work together to resolve it.”
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The governor’s offer to give Chicago 15 more years to ramp up to 90-percent funding levels for the police and fire pension funds has already passed both houses.
Chicago taxpayers would still be on the hook for $619 million in payments to the two funds next year — more than double the current payment. But that’s still $219 million less than the city would have been forced to pay and an $843 million break over the next five years.
Rauner’s offer also includes the elusive, city-owned casino in Chicago, with all of those revenues devoted exclusively to shore up police and fire pensions. That could minimize the need for a massive, post-election property tax increase in Chicago.
One week after Emanuel used a toxic mix of borrowing and budget cuts to make a $634 million payment to the Chicago Teachers Pension Fund, Rauner is offering a partial solution to the $9.5 billion teacher pension crisis.
He’s offering to pick up the “normal cost” of teacher pensions and help CPS with the hefty pricetag for “defraying health insurance contributions,” but only for fiscal years 2016 and 2017.
The deal is contingent on Chicago teachers accepting the equivalent of a 7-percent pay cut by absorbing the “pension pick-up” that CPS agreed to make years ago in lieu of a pay raise. Teachers currently contribute just 2 percent to their own pensions.
Chicago Teachers Union Vice-President Jesse Sharkey has called that proposal a “non-starter” that goes above and beyond what CPS has demanded at the bargaining table.
But Rauner’s bill mimics a portion of the “grand bargain” that Emanuel proposed last week.
The mayor has offered to raise Chicago property taxes by as much as $225 million, provided it’s part of an “all-in” bargain where teachers absorb their entire, 9-percent pension payment and the state reimburses CPS for “normal” pension costs.