About a month ago, Illinois governor JB Pritzker signed legislation that boosted pension benefits for a group of Chicago firefighters, despite the urging of Chicago mayor Lori Lightfoot not to do so, because of the cost to the already-woefully-underfunded plan. As I wrote back in January, this change could drop the funded status from 18% funded down to an even-worse 16%. Each dollar that is spent on this benefit improvement is a dollar that must be extracted from taxpayers or found by cutting other needs.
As the Chicago Sun-Times reported,
“A Wall Street rating agency that alone gave Chicago a junk bond rating on Friday branded as ‘credit negative’ a bill Gov. J.B. Pritzker signed over Mayor Lori Lightfoot’s objections boosting pensions for thousands of Chicago firefighters.
“’The legislation is credit negative for the city of Chicago,’ said the advisory from Moody’s Investors Service, ‘because it will cause the city’s reported unfunded pension liabilities, and thus its annual contribution requirements, to rise.’
“With pension contributions consuming 17% of the city’s operating revenue and total liabilities pegged at $46.6 billion in 2019, pensions are the ‘largest credit challenge facing Chicago,’ Moody’s said.”
Why, then, did Pritzker sign this bill?
In his press release, Pritzker claimed that “HB 2451 creates a system that gives all firefighters certainty and fair treatment.”
And the promoters of this bill, most notably State Senator Robert Martwick, had claimed that, despite all appearances, the bill was actually prudent and responsible, because it removed a “birth date restriction” that, as the Sun-Times reported, “Martwick has . . . already has been moved five times as a way of masking the true cost to the pension fund.”
And Martwick’s own statement at the time?
“If we ever hope to right our financial ship, we must finally put an end to the irresponsible behavior that put us here in the first place . . . . This law simply ensures that the city confronts the true costs of its pension obligations and makes the difficult decisions it needs to make today.”
But, again, as I explained back in January, this is misleading, to put it nicely. This restriction was imposed in 1982 and changed in 1995 and 2004 — then the benefit boosts stopped as the city and the state both finally recognized that pension funding mattered, with Tier 2 benefits implemented in 2011 and an attempted reform in 2013. Only in 2017, in a bill sponsored by Martwick himself, as a state representative, was the benefit boosted again by a further moving of the birthdate restriction, and after he succeeded in getting this bill passed, he set about getting the birthdate restriction eliminated, with a bill in 2018 which died in 2019, before re-introducing it for its final passage now. For Martwick to point to this past history to claim that the moving of the birthdate restriction is somehow inevitable and out of anyone’s control is, well, chutzpah at its finest.
But why, then, would Pritzker have signed into law a bill when the central claim of its advocate — that the state had an unalterable practice of benefit boosts that needed to be recognized honestly — was demonstrably not true, with the barest amount of research required to understand this?
Plainly, there are three possibilities.
First, that Pritzker truly believed Martwick’s claim that the legislature would always boost benefits, so the only option was to recognize this fact. In other words, he’s a fool.
Second, that Pritzker was unwilling to stand up to legislators who, themselves, did not hesitate to support this bill, because, after all, no one is going to blame an individual legislator for going along with the rest of the party, with the safety in numbers it affords. “Fiscal responsibility” offers a plausible cover for what is, in the end, the action of a coward.
Or, third, that he knows full well that Martwick’s claim is absurd, but simply doesn’t care, because he himself, however much he claims otherwise, doesn’t particularly care about pension funding, and will take any opportunity available to boost benefits in an environment in which this is otherwise out-of-the-question. George Costanza, the Seinfeld character, famously said, “it’s not a lie if you believe it,” but this is the opposite situation; a statement becomes a lie, even if others think it’s the truth, if you have access to information to the contrary.
Does it matter?
Pritzker signed this bill a month ago. In the meantime, immediate fiscal crises in Illinois and Chicago have been lightened by the $7.5 billion in American Rescue Plan funds to the state and $1.8 billion to the city. Pritzker announced that, as a result, the state’s contribution to public schools would increase by $350 million and state Comptroller Susana Mendoza announced that the state’s bill backlog had shrunk down to $3.5 billion. Lawmakers are working on budget negotiations, with a May 31 deadline. The redistricting battle is also underway, with its own June 30 deadline, and with the Illinois GOP accusing Pritzker of breaking a campaign promise to support an independent redistricting commission. And Pritzker, as well as new House Speaker Chris Welch, want Illinoisans to believe that, regardless of the state’s past history of corruption that gave it its second-most-corrupt ranking, the state is “under new management” and is now being ethically and responsibly governed.
Can Pritzker be trusted? Can legislators and their leadership be trusted? Not only is the Democratic party in full control of the state, but there are no factions within the party arguing for different directions; bill after bill is passed wholly on a party-line basis, because legislators are expected to simply vote as they’re told to.
Actions like Pritzker’s decision in the firefighters’ bill seem small, but they add up, one signature after the next. And each decision matters, each one is a decision in favor of good governance and fiscal responsibility, or against it. This decision, and countless others like it, matter, even if Pritzker may choose to believe otherwise.
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