This week it appeared that Illinois Democrats were quickly advancing a plan through the legislature to tackle the City of Chicago’s pension crisis; however, facing opposition from lawmakers of both parties, the General Assembly adjourned without advancing the bill.
Senate Bill 1922 is backed by Chicago Mayor Rahm Emanuel, and would increase property taxes in the city as a way to pay down some of the city’s growing pension obligations; it would also require members of the municipal employee and laborers’ retirement systems to pay more into the pension systems and would reduce cost of living benefits.
However, Republicans argue that when taking into account the property tax reduction program proposed by the Governor during his March 26 budget address—which would be funded by all Illinois taxpayers—that proposal would more than offset the cost of the suggested increase. They pointed out that property owners in Chicago already benefit from significant property tax breaks compared to downstaters. By using Quinn’s new tax credit, which would be financed through an extension of the Democrats’ 67 percent income tax increase, downstate and suburban residents would be subsidizing the costs associated with Chicago’s pension bail-out, while also giving Chicago residents greater tax relief.