Chicago mayor jumps into Statehouse pension debate

By Jamey Dunn

As lawmakers look to scale back retirement benefits for state employees, Chicago Mayor Rahm Emanuel asked them to also consider cutting benefits for workers in his city.

Emanuel presented the broad strokes of his proposal to change the city’s six pension systems to an Illinois House committee today. He proposed:

• A freeze on cost of living increases for 10 years. After 10 years, the COLAs would not be figured on a compounded basis. 
• A phased in contribution increase for employees. Employees currently contribute between 8 percent and 9 percent of their pay depending on which system they are in. Under Emanuel’s plan, that would increase by a percentage point each year for five years. After five years, the average cost employees pay would be 14 percent. 
• A five year increase in retirement age that Emanuel said would be phased in over time. This change would increase the age to 67 for most city workers and 60 for police officers and firefighters. 

The mayor’s proposal would have to be approved by the General Assembly, and it would apply to Chicago’s pension systems for laborers, municipal employees, teachers, police officers, firefighters and park employees.

Emanuel estimated that his plan would eliminate about 40 percent of the city’s $20 billion unfunded pension liability. He said that growing pension costs are crowding out other vital services. “Our taxpayers cannot afford to chose between pensions and police officers or pensions and paved streets or pensions and public health,” he said. “Our pension payment will eventually squeeze out every essential that residents require and a city must provide.”

Emanuel projected that if nothing is done to scale back benefits for city employees, property taxes would have to be increased by 150 percent to keep up with the cost. “I do not believe that property taxes should go up 150 percent. No business will come to the city of Chicago or Chicago land area, and no family will relocate [there].”

He praised Gov. Pat Quinn’s plan to reform the state’s pension system and acknowledged similarities in the underfunding that Chicago pensions and state pensions are facing. He said taxpayers and workers are not to blame. The mayor said that politicians have not been honest with the public in the past about the magnitude of the problem and have made promises to workers that they cannot keep. While his plan shares some components with Quinn’s, he said Chicago has different needs. “We are facing problems that a one-size fits all framework will not fit.”

House Speaker Michael Madigan agreed that Chicago and the state face similar problems when it comes to pensions. “Well, I think he delivered his message that the city pension systems need to be reviewed. They need to be examined. They’re not financially sustainable as they’re currently constituted. It’s very similar to what we’re doing here at the state level with the state pension systems. I’ve been very much involved in that. Same issues,” Madigan told reporters today.

The mayor came out strongly in favor of Quinn’s proposal to have school districts outside of Chicago take on some of the cost for teachers’ retirement. He said it is unfair that Chicago covers most of the cost for its teachers while school districts outside of the city do not. “Only taxpayers in Chicago pay for the pensions of their own teachers and those teachers statewide. If taxpayers in Northbrook or Springfield or Marion were faced with that kind of double duty, their mayors would not tolerate it. And as mayor of Chicago, neither will I.”

House Minority Leader Tom Cross said there are other funding inequities between Chicago and downstate that benefit the city, and any potential unfairness should be considered in the context of all state spending. Cross and other Republicans have been less than enthusiastic about the possibility of shifting costs to local school districts. Cross said it would do nothing to address the problem of the unfunded liability. Republicans who have been more vocally opposed have said that it would decimate school budgets. Besides the call for a cost shift, Cross was supportive of Emanuel’s plan. “I like his concept. I like the governor’s concept. I like our concept,” Cross said. “We’re ready to go. We need to do this now.”

Unions decried Emanuel’s plan, saying that he is blowing the situation out of proportion. “What he’s trying to do is alarm the tax payer and pit them against the Chicago Police officers and the fireman that protect our city every single day,” said Michael Shields, president of the Fraternal Order of Police Chicago Lodge 7. “A guy does 30 years, 27 years down the road you can’t just change the rules of the game for the employee. It’s an individual contract between the employee and the employer and you cannot reduce those benefits. It’s against the constitution in Illinois.”

Union officials say Emanuel sprung the proposal on them during today’s hearing and voiced frustration about not being asked for input in the mayor’s plan. “The unions representing city employees have repeatedly conveyed to the mayor our willingness to work constructively to solve the pension funding problem. Yet he has never once met with us to hear our views or put forward the suggestions he unveiled today,” Henry Bayer, executive director of the American Federation of State, County and Municipal Employees Council 31, said in a prepared statement. “No one has a bigger interest in assuring the fiscal stability of city pension funds than the retirees and employees who depend upon them. Our union remains committed to working toward a solution that is fair and constitutional, but we need an administration that shares our commitment to a collaborative process and a genuine solution.”

Emanuel said his “framework” is just the start of a discussion over pension reform for Chicago. He said he would use all the political capital he may have with the legislature to help back reforms to both the state’s pensions systems and the city’s pensions systems through the legislative process this session. But, Emanuel said, getting something passed this spring is not a given. “I never underestimate — given that you’re about to make change — the difficulties surrounding it,’ he said. “Because details matter.”

Study: Chicago and Illinois among most corrupt places in U.S.

By Ashley Griffin 

If you thought Chicago and Illinois were among the most corrupt locales in the nation, you weren’t wrong, according to a  report released Wednesday.

According to the report “Chicago and Illinois, Leading the Pack in Corruption,” the Northern District of Illinois, which primarily consists of the Chicago metropolitan area, is the most corrupt federal district in the country, and Illinois ranks as the “third most corrupt” state. The report, released by the University of Illinois Chicago and the University of Illinois’ Institute of Government and Public Affairs, is based on data from the U.S. Department of Justice's Public Integrity Section that dates back from 1976.

“For a long time — going back to at least the Al Capone era — Chicago and Illinois have been known for high levels of public corruption,” Dick Simpson, head of the political science department at the University of Illinois Chicago and an author of the report, said in a prepared statement. “But now, we have the statistics to confirm their dishonorable and notorious reputations.”

In all, the Northern District has had more than 1,500 federal corruption convictions since 1976 and averaged 51 federal corruptions convictions per year. The report states: “The Illinois Northern District, which contains the entire Chicago metropolitan area, accounts for 1,531 of the 1,828 public corruption convictions in Illinois. Therefore, almost 84 percent of the state’s federal public corruption convictions took place in the Northern District. This makes it the federal district with the most public corruption convictions in the nation since 1976.”

New York and California ranked higher than Illinois for total corruption convictions by state. When corruption convictions were looked at on a per capita basis, the District of Columbia and Louisiana held the top spots, and Illinois again came in third.

James Nowlan, a senior fellow at the University of Illinois Institute of Government and Public Affairs, said of the rest of Illinois: “The other districts are much smaller in population, and they have significantly fewer, often very few, convictions for public corruption. A cursory look would suggest that Central and Southern districts are less corrupt than the Northern District.” However, Nowlan said such statistics could be misleading because prominent cases, such as the recent corruption trial of Springfield political insider William Cellini, are often tried in the Northern District, regardless of where they took place.

“We hope this report, imperfect as it is, does have some legs because I think most people in Illinois are distressed by the perception of Illinois,” said Nowlan, who is also one of the authors of the report. “Since the 1880s, Chicago has been known as a place in which people who enter public life often try to do well rather than do good, and so, the Chicago nexus of corruption has been with us more than a century, and it is rooted in machine politics, in which politics is a career for many who enter it.”

Despite such gloomy news, the report does make suggestions on how to address the problem. “Attacking corruption starts with a comprehensive programs of mutually reinforcing reforms. These should include a mix of corruption prevention and enforcement measure, along with public involvement and education,” states the report. It gives six recommendations that include amending the city’s ethic ordinance to cover aldermen and their staff and banning all gifts to all elected officials and public employees, except from family members. The report also supports Gov. Pat Quinn’s recently proposed constitutional amendment that would allow Illinois citizens to adopt ethics reforms by referendum.

“I haven’t seen it [the referendum] in detail, but Illinois has an ethics deficit, and anything we can do to improve our ethical behavior would be good for the state. So it sounds like it gives the citizens an opportunity to provide some input on ethical behavior, codes of ethics or other kinds of ethical programs,” Nowlan said. However, similar proposals from Quinn in the past have gone nowhere in the legislature.

Nowlan said public perception of the most corrupt states was spot on with the report’s findings. He said a yet unpublished national public opinion poll he conducted found Illinois ranked third among states most perceived as corrupt. New York and California also took the  top spots in that poll.

Nowlan said the report will be presented today to Chicago Mayor Rahm Emanuel’s ethics commission, but so far, there are no plans to present it to any statewide ethics panels.

Agency unveils plan to see Chicago through the next 30 years

By Jamey Dunn

A plan that is intended to guide the growth and development of Chicago and its surrounding suburbs through 2040 was launched today.

The GOTO 2040 plan has been compared to the well-known, so-called Burnham Plan — the 1909 Plan of Chicago created by Daniel Burnham and Edward Bennett.

Tom Garritano, a spokesman for the Chicago Metropolitan Association for Planning (CMAP), said the comparison helped to grow interest an participation for the planning stage of GOTO 2040. “One of the great things of the timing of the 2040 plans was that it was in the last year of development during the Burnham centennial.”

He added the two plans address very different issues and challenges. “There’s 100 years in between. It is a very different region. The world is a very different place.”

GOTO 2040 cites an estimated population growth in the region of 25 percent, from 8,600,000 today to 11,000,000 residents in 2040.

The plan applies to Cook, DuPage, Kane, Kendall, Lake, McHenry and Will counties. It focuses on communities collaborating to make development decisions that work together, instead of building in a disconnected and haphazard way to meet immediate needs. “Most of our region's near-term challenges are the direct result of choices made — or too often deferred — in the past. Urgent challenges have often been an excuse to avoid planning, but they actually reinforce the need to plan more effectively. We need to act now, before today's opportunities become tomorrow's crises.”

GOTO 2040 emphasizes sustainability, maintaining public transit and infrastructure, and cutting down on suburban sprawl.

Garritano acknowledged that one of the most important aspects of implementation will be participation from all the communities GOTO 2040 involves. However, he said the involvement of many stakeholders in the three-year development of the plan is an encouraging indicator of their willingness to participate. “They’ve helped write their marching orders,” he said. “I wouldn’t take [their participation] for granted, but it’s a good sign.”

The authors of GOTO 2040 emphasized the need for responsibility and communication across Chicago-area communities. “The cumulative choices of 284 municipalities and seven counties determine quality of life and economic prosperity across our region. With local autonomy over land use comes the responsibility to consider how those decisions shape a community’s livability, including how they affect neighboring communities and the region as a whole. “

From more on GOTO 2040 see the current (October) Illinois Issues, page 31.

Daley says he will not run again

After serving for more than 20 years, Chicago Mayor Richard Daley has decided not to run for reelection.

Daley, who was elected in 1989, told reporters at a Chicago news conference that the decision was a personal one and something he has been considering for months.

The mayor’s wife, Maggie Daley, has been battling cancer since 2002.

Daley has taken criticism recently over a failed bid to have the city to host the 2016 Summer Olympics and the controversial leasing of the city’s parking meters to a private company.

Contenders will likely line up to take Daley’s position. President Barack Obama’s chief of staff, Rahm Emanuel, made news in April when he said he wanted to “one day” run for mayor after Daley was no longer in the job.