A new group formed by Chicago Mayor Brandon Johnson to tackle the issue of underfunded City pensions met for the first time last week as the new mayor seeks to make good on his campaign vow not to raise property taxes for residents.
“We can make Chicago safer, grow Chicago businesses, create good jobs, strengthen public schools for all of our kids, protect our environment, improve mental health, and fix our broken transportation system — without raising property taxes,” a recent WTTW news report said, quoting Johnson’s campaign platform.
The group of state lawmakers, City officials and union leaders began their work in earnest; with Johnson’s promise to reverse former Mayor Lori Lightfoot’s strategy of automatically raising property taxes as a way of combating inflation in mind.
The fiscal watchdog group Civic Federation recently called Chicago’s ongoing pension struggles one of the five major fiscal challenges the new Johnson administration faces, adding that City finances will continue to be squeezed by rising pension costs as officials struggle to satisfy a state law mandating that at least two City funds be funded at a 90% level over the next three decades.
“The high unfunded liability has burdened the city for years and continues to be a concern because pension obligations will continue to put pressure on the city’s budget and constrain its finances,” Civic Federation told WTTW.
With at least four of the City’s pension funds now funded at less than 24%, Johnson campaigned on a platform that supported efforts to raise $800 million in taxes from several sources, including by raising taxes on big firms for each city resident they employ and on the sale of high-value properties.
In all, the City’s current bill stands at $33.7 billion for its four employee pension funds that represent police officers, firefighters, municipal employees and laborers; according to the 2021 Annual Comprehensive Financial Report. The hefty price tag remains despite the City managing to pay an additional $1.3 billion toward the debt over a recent four-year period beginning in 2019.
