Unsurprisingly, Illinois Gov. JB Pritzker signed the Chicago police and fire Tier 2 pension sweetener, bringing it in line with the downstate plans. However, this is not much of a gift to Chicago… or those pensioners… if those promises are never fulfilled. I look at reactions from the usual suspects: Wirepoints, Austin Berg, Jeffrey Carter, and John Arnold. And, of course, me. There will be text posts forthcoming, if you’re not into audio posts.
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Episode Links
News on Pritzker Signing
1 Aug 2025, Chicago Tribune/Yahoo: Illinois Gov. JB Pritzker signs police and fire pension bill expected to cost Chicago billions
CHICAGO — Gov. JB Pritzker signed into law on Friday a measure that will provide some Chicago police officers and firefighters with higher pensions, an adjustment that will eventually cost the city’s taxpayers billions of dollars.
The new law aims to bring parity between Chicago and downstate first responders and help bridge a shortfall in benefits for employees hired after 2010. Chicago police officers and firefighters argued they deserved the same benefits as downstate first responders.
“The legislation codifies adjustments the city of Chicago has been implementing over the years to tackle pension system challenges and represents a proactive step to prevent more significant financial or legal issues in the future,” Pritzker spokesperson Alex Gough said in a statement. “The Governor remains committed to maintaining fiscal responsibility at all levels of government and expects the city of Chicago to implement these changes with careful planning and fiscal discipline.”
1 Aug 2025, Center Square: Pritzker signs 124 bill impacting Chicago pensions, AI, buses, bicycles and more
Illinois Gov. J.B. Pritzker signed 124 bills Friday impacting everything from Chicago police and fire pensions to the use of artificial intelligence for mental health therapy.
Effective immediately, House Bill 3657 makes changes to Tier 2 Chicago Police and Firefighter pension benefits. Chicago Mayor Brandon Johnson said the measure was incomplete when asked how the city will pay for the bill of increased pension costs for retirees hired after 2011.
“Absent progressive revenue, it’s impossible to maintain that expectation, so the best way to put it is this is incomplete,” Johnson said last month before the measure was signed.
The city faces a billion dollar budget deficit for the next fiscal year starting in January.
Reactions from Commenters
John Arnold on Twitter/X: [plus commenters]
Austin Ward:
This raises two questions:
* What did Pritzker’s evaluation of the bill reveal?
* Why is it not being published?
Chicagoans who will be picking up the tab for billions of dollars in pension sweeteners through higher taxes or service cuts deserve answers to those questions. What they got instead was a two-sentence quote from Pritzker spokesperson Alex Gough, who tried to spin that the bill was actually responsible:
“The legislation codifies adjustments the city of Chicago has been implementing over the years to tackle pension system challenges and represents a proactive step to prevent more significant financial or legal issues in the future. The Governor remains committed to maintaining fiscal responsibility at all levels of government and expects the city of Chicago to implement these changes with careful planning and fiscal discipline.”
If that’s true, the governor has an obligation to prove it.2
That’s why the Chicago Policy Center sent a formal demand to the governor’s office this weekend for all records related to the evaluation of this bill. You can read the full Freedom of Information Act request letter here.
Jeffrey Carter:
I was at a Chicago Economic Club lunch in 2007 when I first became acutely aware of it. There was a way out then. However, at that lunch, a person stood up in the Q&A and asked about the “constitutionality” of the two public company CEO proposals. Clearly, he was a government operative.
Illinois Supreme Court Judge Anne Burke (Combine), and wife of convicted felon Democratic Alderman Ed Burke, put the nail in the coffin of the ballot initiative Illinois voters approved to reform pensions. From that point on, Illinois’ solution was a Tier 1 and a Tier 2 pension system based on seniority.
Pritzker blew that to pieces, and now every single public sector union will want the same deal. There is no way Pritzker won’t give it to them, and there is no way the Democratic supermajority won’t give it to them.
Illinois and Chicago have some of the worst-rated muni bonds in the US. I cannot fathom how the ratings agencies do not downgrade them to junk status now. That means even higher interest rates with even more covenants in the bonds, which fall directly on taxpayers. You are deceiving yourself if you think the response of all governments in Illinois will be to cut spending. It’s not happening.
Government in Illinois and the towns, counties, and cities of Illinois isn’t about governing. It’s about political patronage. Patronage allows politicians to stay in power and rule like dukes, lords, and kings over citizens. It allows them to decide where the money goes. Because they have the power of government at their fingertips, they can use the tip of the spear to enforce any decision they make, and people have to bend the knee to them.
Wirepoints: The whopping lie behind huge, new pension liability imposed by Springfield on Chicago – Wirepoints
Which is worse, financial malfeasance or a flagrant lie to justify it? Take your pick. Both are nothing short of astonishing when it comes to Gov. JB Pritzker’s signature Friday on a bill hiking benefits for two of Chicago’s pensions that already had been bled nearly dry.
A City of Chicago actuarial analysis of the bill says the change “would increase the city’s pension liabilities by more than $11 billion across the Police and Fire funds,” the Chicago Tribune reported, while dropping the funding levels of both down to less than 18%.
Those funds were already desperately underfunded, having had only 25% of the money necessary to pay out pension benefits for work already performed. They have the lowest funded ratios for local pension plans in the country.
They are so poorly funded that their combined unfunded liabilities are larger than 43 states — including New York, Michigan, and Florida, according to a recent study. If Chicago does nothing and lets its pension problem continue, then “Chicago becoming the next Detroit is not just a possibility — it’s inevitable.” That’s from an op-ed last week by a former chief financial officer of the city.
So, what does the state, which makes the law for city pensions, do about it? It expanded benefits while providing no funding source. Next year alone, Chicago will have to come up with an extra $60 million on its $1.5 billion pension tab in 2027, and that increase will grow to more than $753 million for 2055. That’s according to the city’s actuarial analysis, but the state didn’t even bother do its own actuarial analysis on the cost.
What possible excuse does the state have for the new law?
STUMP posts
5 Feb 2025: Chicago and Illinois Update: Job Posting, Tier 2 "Reform", Casino Shenanigans, and More
That has my fave Eric Allie Rahm-can-kicking gif.
9 May 2015: Illinois Pensions: A Court Ruling and on How Promises Fail
11 May 2015: Illinois Pensions: How Did We Get Here? The 1970 Constitution
Some nice lettering, at least.
STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
