I feel for Chicago Mayor Lori Lightfoot. I really do.
For that matter, I feel for all of the city’s residents.
Chicago’s debt, in large part because of underfunded retiree benefits, is unsustainable. But in no way should taxpayers statewide be forced to bail out the city’s failing pensions.
Lightfoot has floated the idea of consolidating the city’s $28 billion pension debt into a statewide fund that taxpayers from Carbondale to Springfield to Peoria to Chicago and the suburbs would be responsible for funding. She put that idea out in the air again this week, this time in front of fellow Democrat, Illinois Gov. J.B. Pritzker.
If she can’t find a different solution, the city’s annual pension payments will increase $1.2 billion by 2023 because of state mandates. Lightfoot says she’ll have to raise taxes by a billion dollars if that’s the case. That’s a hefty sum anywhere, but particularly in a city carrying one of the heaviest tax burdens in the country.
I’m sorry, mayor. You’ve been in office for fewer than two months. I know you aren’t responsible for the city’s massive pension debt. But suburban and downstate taxpayers aren’t responsible, either. And, as they’d be glad to tell you themselves, they have their own pension problems.
The state’s five public pension systems are underfunded by more than $135 billion. That’s up from $86 billion in 2010 and $111 billion in 2015. It’s growing like a weed. And folks, no, taxing legal recreational marijuana won’t begin to fix this mess.
According to government spending watchdog Truth in Accounting, Illinois taxpayers have a debt burden of $50,800. What that means is, if each taxpayer were asked to contribute an equal share to pay off all of the state’s current debt after assets are subtracted, each one of us would have to cough up that amount.
Thankfully, Pritzker this week dismissed the idea of the state picking up Chicago’s pension obligations, saying it could drive Illinois’ worst-in-the-nation credit rating to junk bond status. He certainly doesn’t want that – but neither do taxpayers.
There is another solution, though, one that Lightfoot’s predecessor, Rahm Emanuel, suggested on his way out the door.
Pension reform. Yes, seriously, he said that. As he was leaving, of course, and not while he was presiding over the city.
It’s so obvious that, well, elected officials across Illinois who are beholden to public employee unions avoid the topic at all costs.
But it’s the only real solution.
Late-career pay bumps, and guaranteed 3 percent cost-of-living increases for public-sector workers that compound each year have jacked up the cost of pensions to the point where taxpayers no longer can afford to pay them. But Illinois’ constitution says that public employee pensions can’t be diminished.
Lightfoot should use her bully pulpit to gain support for an amendment to the state’s constitution to eliminate the diminishment clause so pensions can be adjusted to more manageable levels.
It won’t be easy because public employee unions that fund Chicago’s political machine don’t want reform.
But if Lightfoot gets on board and can persuade Pritzker to join her, there’s a shot.
And it’s the only real shot in a state with five years of consecutive population losses that undoubtedly have been exacerbated by an overwhelming tax burden.