Jan
01

Could Burden of Pension Overhaul Fall on Chicago Homeowners?

January 01, 2011

Illinois’ Governor has signed a pension-reform bill that Chicago’s Mayor says will result in the largest property-tax increase for Chicago homeowners in the history of the city.

The bill Illinois Governor Pat Quinn signed this week will completely overhaul the pension program for newly hired police officers and firefighters throughout Illinois.

Tax calculatorIn exchange for raising the retirement age from 50 to 55 and limiting benefits to those hired on or after January 1, the city of Chicago and many suburbs will be required to come up with more money to cover the plan, which could result in a rise in property taxes.

The law calls for an increase in the city’s combined annual contribution for police and firefighter pensions from a projected $309 million in 2015 to about $856 million over the next 25 year.

That is “a higher ratio and shorter time frame than every other municipality in the state and the state’s own employee pension system,” according to a statement from Mayor Richard M. Daley.

“The direct result of the governor’s actions will be a massive property-tax hike for Chicago residents of at least $550 million, or about a 60 percent increase in our current property-tax levy.”

The Mayor said he will push for changes to this new law, including an increase in contributions from employees, which hasn’t changed in more than 34 years.

Supporters of the new law claim property taxes will not have to be raised to cover this pension-reform bill.

Any changes will be considered by the Illinois General Assembly in its new legislative session, which beings January 12.

Stay tuned.

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Tracey

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1 Comments

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[...] tax from 4.8% to 7% in hopes of cutting into the state’s $15 billion budget deficit. The pension-overhaul bill calls for the city to increase their annual contributions to the police and firefighters pension [...]

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