Paul’s Plan to Solve the City’s Pension Crisis
Chicago's dangerously underfunded municipal pensions require immediate action to keep them from going underwater. Experts say a 100% funding ratio should always be the goal, and that a pension is at risk when funding drops below 80% and likely to default once it dips below 40% funding.
Chicago's four municipal employee pensions are currently funded at 19% (Fire), 21% (Municipal) 23% Police and 43% Labor. We are out of runway.
Past discussions about amending the Illinois State Constitution are a dead end and a Vallas Administration won't pursue it. Instead, Paul will focus on practical, realistic and achievable solutions within the power of the mayor that include pursuing full fair share funding from the State and better returns on pension fund investment by:
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De-politicizing pension fund investment decisions by putting them under the direction of independent professional investment managers and holding them accountable for investment performance.
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Promoting a legislative agenda that protects the statutory local government share of any increase in the State Income Tax.
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Working with Springfield toward phasing in full State Equity for Chicago Teachers’ Retirement System (CTRS) to bring the State's employee contributions to CPS into historical and forward-going parity with the contributions the State makes to all other school districts in Illinois.
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Dedicating the $500 million in annual City contributions to school pensions freed up by state payment parity to go to the dangerously underfunded city pension funds, including the police, fire, laborer, and municipal employee plans.
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Leveraging TIF surpluses to fund Pension Obligation Bonds serviced through dedicated TIF revenues.
Under NO circumstance will Paul raise property taxes to address the pension crisis.
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Repeal the automatic Cost of Living Escalator passed during the Lightfoot Administration.
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Create a Permanent City and School District Property Tax and Fee Cap.
“The City has run out of runway on its pension crisis, but all is not lost as long as we use the tools we have long had available to address it ourselves. As Mayor, I will immediately put all of the tools available to the City to work for the benefit of retired and active city employees without further burden on taxpayers.”
- PAUL VALLAS
