Cities pushing for municipal pension reform

By Nick Kovatch on January 10 at 1:20pm

Illinois has another pension reform law on the books, and this one may have an impact on local municipalities down the road.

Earlier this week, Governor Pat Quinn signed a pension reform bill for the Chicago Park District. The measure makes cuts to cost of living adjustments and increases both the employee and employer contributions.

Many city leaders in the state hope it could be a model for statewide municipal pension reform.

But this new measure faces the same major hurdle as the recently enacted pension law for state employees.

Jacksonville state representative C. D. Davidsmeyer voted against the measure in November.

“I didn’t believe it was constitutional,” says Davidsmeyer. “There was some discussion about how it was negotiated with the unions up in the Chicago Park District. From my understanding there were some people left out of that negotiation, as well.”

He says the Illinois constitution prevents impairment or diminishment of benefits from state and or local pension plans.

He believes changes to cost of living adjustments may violate that clause, but increasing the contribution by employees may not.

Jacksonville firefighters and policemen pay just under 10 percent a year for their pension. The city collects about $1.5 million for fire and police pension through taxes.

Mayor Andy Ezard says some kind of reform is needed.

“We certainly respect and appreciate what the firemen and policemen do, but I think we need to meet in the middle somewhat to help things out as far as our own budgeting,” says Ezard. “Because personnel and pensions is a lot of it. We need to take some of that money – through reform if that helps – and apply it elsewhere for better services for our citizens.”

He says Jacksonville is in good shape compared to many other municipalities in the state. The city gets an actuarial audit report that estimates Jacksonville’s contributions for the upcoming year. Currently, the city funds between 60 percent and 70 percent of its fire and police pensions.

“We’re funding at a good level,” says Ezard. “Every pension is underfunded but we are funding our pensions at a high level because we have the money to do that right now. If things turned for the city in a hurry, I could see in the future that we wouldn’t be on the same level that we are right now.”

The union representing Chicago Park District employees is reviewing its legal options which includes the possibility the union will sue to block the implementation of the pension reform law.

Our reporting partners at ABC Newschannel 20 contributed to this story.