Mon 04/05/2021 18:05 PM
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Relevant Documents:
Press Release
HB 2451

Illinois Gov. JB Pritzker signed legislation today codifying benefits in the Chicago firefighters pension system that Mayor Lori Lightfoot warns will worsen the city’s unfunded pension liability and place “an unnecessary financial burden” on residents.

The law, House Bill 2451, addresses disparate pension benefits among Chicago firefighters. Currently, employees eligible for a pension in the Firemen's Annuity and Benefit Fund of Chicago, or FABF, who were born after after Jan. 1, 1966, are granted a 1.5% annual cost of living adjustment, or COLA, while other employees born prior to this date receive a 3% COLA. The legislation addresses the disparity by adjusting the COLA to 3% for these firefighters, according to a press release issued by the governor’s office. The legislation also eliminates a 30% cap on cumulative COLA adjustments.

In signing the legislation, Prtizker said “hardworking men and women who have earned their pension shouldn't pay the price for local or state budget challenges" and added that HB 2451 “creates a system that gives all firefighters certainty and fair treatment.”

The governor said that to help ensure Chicago can meet its obligations, his administration is “working to sell” the James R. Thompson Center, returning it to Chicago’s property tax rolls. He said the property is expected to generate $45 million annually for the city and its sister agencies.

Mayor Lightfoot, however, said via Twitter this afternoon that the enactment of the legislation “would worsen our unfunded pension liability and place an unnecessary financial burden on Chicago residents who can least afford it. We need to ensure a stable financial future for our city and all our residents. This bill does the opposite.”

Following legislative approval of the measure, Lightfoot urged Pritzker in a letter to veto the measure, according to a report in the Chicago Sun Times. The mayor said the increase would result in added costs to the city of $823 million by 2055, adding that the "huge increase in unfunded liabilities would necessarily mean another property tax hike for Chicagoans," the report states.

The city’s 2021 $12.8 billion budget relies on a series of measures, including a $94 million property tax hike, to address a projected $1.2 billion deficit. The budget also envisions freeing up about $500 million through debt refinancing involving general obligation and sales tax securitization corporation bonds.
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