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House, Senate pass Rahm’s pension bill — now it’s up to Quinn

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Updated: April 9, 2014 7:28AM

SPRINGFIELD — Stripped of its property-tax provisions, a plan crafted by Mayor Rahm Emanuel to cut city pension benefits is now headed to Gov. Pat Quinn after the House and Senate approved the measure Tuesday in votes supporters said were aimed at stopping Chicago from becoming “another Detroit.”

“The city of Chicago has engaged in a series of discussions with labor and as a result, the city has asked the General Assembly to pass legislation that will significantly reform these two funds in order to achieve long-term financial stability,” House Speaker Michael Madigan told colleagues before his legislation passed the House 73-41, with one voting present, and now moves to the Senate.

Later Tuesday, the Senate followed the House’s lead, voting 31-23, with two members voting present.

In Chicago, the mayor gave a brief statement to reporters late in the afternoon at City Hall: “Today is an important day for Chicago residents and our city’s future. We are stepping up and taking on our toughest challenges, many on which have been decades in the making.”

Emanuel, who did not take questions from reporters, also said there is plenty of work ahead on pension reform.

“While our work is not done, this legislation and the willingness of our residents, our employees and retirees to make these necessary changes shows that we can look a challenge squarely in the eye and address it together,” he said.

The mayor’s plan stalled in the House last week amid political worries from both parties that it would have put the General Assembly’s stamp of approval on a $250 million increase in the property tax levy, resulting in what some Republicans said would be an overall $750 million hike in property-tax collections during the next five years.

“The bill, as amended, is not concerned with raising property taxes. The city of Chicago is a home-rule unit pursuant to the constitution has authority to levy real-estate taxes and to impose other taxes. This bill simply changes the contributions required by the employer, the city of Chicago, plus the employees, and it reduces the benefit level. That’s what this bill does,” the speaker said.

Even though Madigan moved Monday to remove language authorizing the City Council to impose that property-tax hike, some Republicans still voiced worries that the legislation being voted on amounted to a huge new property-tax burden on city taxpayers.

“Let’s not kid anybody. What we’re talking about today is a massive property-tax increase,” said Rep. David McSweeney, R-Barrington Hills. “This is not a comprehensive solution.”

But there wasn’t agreement among the House GOP on the issue, as some members sided with the plan presented Tuesday and raised the spectre of Detroit’s financial collapse, where public-employee pensions were not deemed to be protected by a federal court.

“Many officials have written that Chicago is not Detroit, that Chicago has a much greater economic base than Detroit, which was built on the automotive industry. Thus Chicago is more diverse and not Detroit,” said Rep. David Harris, R-Arlington Heights. “Well, my friends, unless the laws of economics have somehow overturned, Chicago could become another Detroit. Quite frankly, I think they’re on that path right now.”

In the Senate — unlike in the House, where 24 House Republicans were on board the bill — Republicans largely opposed the plan, raising questions about the “piecemeal” approach in dealing with Chicago’s four retirement systems and not being clear what the total cost of doing so will be.

“It’s irresponsible on our part to rush in and take action when we don’t have the full picture,” said Senate Minority Leader Christine Radogno, R-Lemont.

The only Senate Republican voting for the plan, sponsored in that chamber by Sen. Kwame Raoul, D-Chicago, was Sen. Karen McConnaughay, R-St. Charles.

The legislation is deeply steeped in the gubernatorial campaign, where Republican Bruce Rauner shares McSweeney’s stance and has called for the legislation to move city employees into a 401(k)-style retirement program and eliminate future pension benefits.

At an appearance Tuesday, Gov. Pat Quinn, who is campaigning on a $500 property-tax rebate for all Illinois homeowners, would not say whether he supports the legislation now on its way to him. On Monday, Quinn said he was against the bill so long as it included language authorizing Chicago to hike property taxes to pay down its pension debt.

Contributing: Becky Schlikerman

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