Hinz: That Pension Ruling Will Cost Taxpayers $200 Million A Year
From Crain's Chicago Business
The court decision throwing out a deal to refinance two Chicago pension funds appears to be among the most costly in the city's history, in some ways ranking right up there with the Great Chicago Fire.
Exact figures are not available and vary some depending on who's doing the estimating. But based on statements by city officials and documents filed by the pension funds themselves, it's likely that the decision by Cook County Circuit Court Judge Rita Novak will cost city taxpayers around $200 million a year through the end of the decade—and will keep rising for decades thereafter.
"You'd have to go back to either the Depression or the Great Fire to find a comparable situation in which the city faced either greater challenges or more painful decisions," Civic Federation President Laurence Msall said. "It's clearly going to result in increased taxes and reduced services."
Here's the math behind that frightening calculation.
According to City Corporation Counsel Steve Patton, who has vowed to appeal Moreno's decision and predicted in an interview on July 24 that he will prevail, the deal to refinance the city's municipal and laborers' pension funds was bargained and backed by most of the city's labor unions for a simple reason: The city agreed to pick up most of the cost.
Over a five-year period, he said, total city contributions to the funds will rise to an estimated $650 million from $177 million now. That's 70 percent of the total cost, Patton said, echoing statements by other city officials. The remaining 30 percent would come from workers in the form of increased pension contributions and reduced benefits.
Read more in our daily News Update...
From Crain's Chicago Business
The court decision throwing out a deal to refinance two Chicago pension funds appears to be among the most costly in the city's history, in some ways ranking right up there with the Great Chicago Fire.
Exact figures are not available and vary some depending on who's doing the estimating. But based on statements by city officials and documents filed by the pension funds themselves, it's likely that the decision by Cook County Circuit Court Judge Rita Novak will cost city taxpayers around $200 million a year through the end of the decade—and will keep rising for decades thereafter.
"You'd have to go back to either the Depression or the Great Fire to find a comparable situation in which the city faced either greater challenges or more painful decisions," Civic Federation President Laurence Msall said. "It's clearly going to result in increased taxes and reduced services."
Here's the math behind that frightening calculation.
According to City Corporation Counsel Steve Patton, who has vowed to appeal Moreno's decision and predicted in an interview on July 24 that he will prevail, the deal to refinance the city's municipal and laborers' pension funds was bargained and backed by most of the city's labor unions for a simple reason: The city agreed to pick up most of the cost.
Over a five-year period, he said, total city contributions to the funds will rise to an estimated $650 million from $177 million now. That's 70 percent of the total cost, Patton said, echoing statements by other city officials. The remaining 30 percent would come from workers in the form of increased pension contributions and reduced benefits.
Read more in our daily News Update...