City employee union leaders reacted furiously Thursday to a new bill in the Illinois General Assembly that would give Mayor Rahm Emanuel and Cook County Board President Toni Preckwinkle control over public employee pension funds.
House Republican Leader Tom Cross of Oswego is leading the effort to dissolve the city and county worker pension boards and alter the balance of power by allowing Emanuel and Preckwinkle to appoint a majority of new board members.
While Emanuel aides said the recently elected mayor was weighing his position on the bill, Preckwinkle’s spokeswoman told the Chicago News Cooperative that the first-term board president favored it.
“Because the employer contributes a sizable portion of funding each year, the president believes that the employer should appoint the majority of the pension board members—members who will have the professional background and proven track record in finance and investment in charge of managing the taxpayers’ money in those funds,” Preckwinkle spokeswoman Jessey Neves said in an email to the CNC on Thursday evening.
Neves added that the change would “lend a greater sense of urgency in attempting to manage the issues facing public employee pensions today.”
Cross said he talked with Emanuel this week about the bill, which was introduced last week, and the mayor said he would consider supporting it.
“I think he has made it pretty clear where he is on pensions,” Cross said.
The mayor has not yet taken a position on the bill, Emanuel spokeswoman Chris Mather said Thursday. “We’re looking at it,” she said.
Emanuel has called for reforming the severely underfunded pension system, and his lobbyists pushed unsuccessfully for changes in the spring legislative session. Without offering specific proposals, Emanuel said in his budget speech Wednesday that he would continue to focus on the issue, even though it was not addressed in his budget, which continued the long-running city policy of underfunding pension funds.
“Our pension obligations are clearly unsustainable,” Emanuel said. “That’s why I will continue to work with leaders in Springfield to solve the pension crisis – sooner rather than later.”
But Cross said neither the mayor nor his aides in Springfield had asked him to introduce the new proposal.
“I think the suggestion by some is that the mayor’s office called me and is trying to get more power,” Cross said. “That’s not what happened. This came out of our shop. I want to be clear about that. He didn’t call me and say, ‘Do this.’”
The legislation would give Emanuel control of the pensions funds for police officers, firefighters, municipal employees, city laborers, park district workers and Chicago Public Schools teachers. Preckwinkle would hold sway over the pensions for county and forest preserve employees.
In a statement posted Thursday on the website of the Chicago police officers’ union, the group’s president, Mike Shields, alleged that Cross “signed on to be the legislative arm of the Democratic mayor of the city of Chicago.”
The police pension board has four mayoral appointees and four trustees chosen by the union’s 17,000 members, including about 10,000 officers and almost 7,000 retirees. The legislation, House Bill 3827, would dissolve the board within 90 days of passage and set up a new panel with four mayoral appointees and only three representatives of pension fund members.
“Elected trustees like me are best suited to watch over their retirement money,” wrote Shields, who also sits on the pension fund board. “We don’t owe the mayor a thing.”
In the statement, Shields recalled that one of the city’s representatives on the police pension board, city Treasurer Stephanie Neely, had threatened to sue him when he criticized her.
Also voicing opposition to the measure Thursday was Anders Lindall, a spokesman for the Chicago-based Council 31 of the American Federation of State, County and Municipal Employees, which represents 5,000 county employees and about 3,500 City Hall workers. Lindall said the blame for the pension crisis belongs to politicians who avoided contributing government’s share to the funds.
“To consolidate power in the hands of politicians is a recipe for disaster,” Lindall said. “It would take the funds in the opposite direction of the transparency and accountability that Mayor Emanuel says he wants in city government.”
A spokesman for the Chicago Federation of Labor, the umbrella union organization for dozens of city worker groups, declined comment.
Cross said the ultimate goal of the bill is to crack down on pension abuses by requiring board members to report suspected abuses to the Cook County state’s attorney. He cited reports of city union leaders taking multiple pensions.
“Right now, there’s no real accountability to any elected official,” the GOP leader said.
Cross said he has received calls from union workers who are concerned that giving control of the pension boards to politicians would result in reduced benefits, but Cross said only state lawmakers can change benefits for union workers.
He said he hoped the bill would be approved during the fall veto session, which begins later this month.
Get politicians and unions out of the pension management business entirely. This is an actuarial function. We need people running the finances who have financial backgrounds and understand the numbers, not the pressures to keep increasing payouts without adequate contributions.
There has to be some reality input in the pension issue and we aren’t going to get it from those with vested interests in the outcome – politicians who must craft a budget and the unions who will never take less.