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Emanuel touts ‘real good progress’ in talks with unions on pension crisis

Mayor Rahm Emanuel  |  Brian Jackson~Sun-Times

Mayor Rahm Emanuel | Brian Jackson~Sun-Times

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Updated: August 14, 2012 6:01PM

Mayor Rahm Emanuel said Tuesday he’s making “real good progress” with union leaders whose collaboration he needs to solve the city’s $25 billion pension crisis, and he prodded the Illinois General Assembly to do the same at the state level at a special session this week.

“City issues are separate from the state. We’re having very good discussions with our friends in labor and real good progress on both the contracts and also specifics related to pensions,” the mayor said without revealing specifics of the negotiations.

“We are doing our work to take care of our business. They have a special session. They’re gonna go down there. We have to address this issue. We cannot … run away from it. Nobody’s planning to do it. But the notion that some are saying, ‘We’re not gonna support it’ “[is not acceptable]. ... We have to do it for the fiscal health of our state, the fiscal health of our city, for peace of mind for our retirees and the peace of mind for our taxpayers, who we work for.”

Chicago Federation of Labor President Jorge Ramirez refused to comment on the ongoing talks.

The General Assembly will meet Friday in a special session on the state’s $83 billion pension crisis called by Gov. Pat Quinn.

But House Minority Leader Tom Cross (R-Oswego) has lowered expectations by describing a Senate-passed pension reform package that will likely be voted on then as a non-starter.

Cross’ opposition is significant because it adds another layer of pessimism to Quinn’s call and suggests that Republicans won’t back efforts to pass the Senate-crafted pension plan that deals with only two of the state’s five retirement systems.

Senate President John Cullerton (D-Chicago) has pushed for the House to vote on a pension reform bill that passed the Senate during the closing hours of the spring legislative session.

It would apply to members of the State Employees Retirement System and General Assembly Retirement System but spares current Downstate and suburban teachers and university workers and retirees.

The main thrust of the legislation would make workers and retirees choose between either continuing to get 3 percent cost-of-living increases to their pensions in retirement or keeping their state-subsidized health insurance.

It also steered clear of the main sticking point to Republicans: requiring Downstate and suburban school systems to shoulder pension costs for their work forces.

House Speaker Michael Madigan (D-Chicago) has signaled his intention to allow a vote on Cullerton’s bill, but it will require Republican votes to pass.

Last spring, Emanuel blindsided and infuriated union leaders whose collaboration he had promised to seek to solve the city’s pension crisis.

Instead of negotiating first with union leaders in Chicago, he went to Springfield to lower the boom. The following day, he sent a letter to city employees to soften the blow of the bitter pill he’s asking them to swallow: a 10-year freeze in cost-of-living increases for retirees; a five-year increase in the retirement age; a five-percent increase in employee contributions and a two-tiered pension system for new and old employees.

Labor leaders accused the mayor of pitting hardworking employees against taxpayers — by portraying a 150 percent increase in property taxes as the only alternative to employee concessions.

In the end, Chicago’s pension crisis was put off until the state solves its larger pension problem.

Meanwhile, labor leaders have resumed their dialogue with Emanuel.

“We owe it to our employees to get a retirement security system they can rely on. That doesn’t exist today. Many of these funds are just years away from bankruptcy or not being able to pay out the pensions. We owe it to our taxpayers who are on the hook,” the mayor said Tuesday.

“If we do nothing throughout … our five funds, we have to raise property taxes 150 percent, and I will not do that. So, we cannot run from this issue. We must deal with it. Time is running short for both our taxpayers and our retirees. We owe both of them the honesty of the conversation and the tough choices that are necessary.”

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