The Illinois General Assembly approved last-minute changes that will significantly increase pension benefits for some Chicago police officers and firefighters. The adjustments, sponsored by Senator Robert Martwick and supported by Mayor Brandon Johnson, aim to bring parity between Chicago and downstate first responders and address a shortfall in benefits for employees hired after 2010. Chicago’s Chief Financial Officer Jill Jaworski estimates the initial cost will be $52 million in 2027, but budget watchdogs warn it will add billions to the city’s pension liability.
“It adds to the city’s burdens at the worst possible moment,” said Joe Ferguson, President of the Civic Federation. The changes include increasing the final salary cap used to determine pension benefits, changing the annual salary cap increase rate, and switching the time frame to determine the final average salary figure. The financial impact will become clear once the city conducts an actuarial calculation, but Ferguson estimates that the annual cost will rise and could ultimately add billions to the funds’ long-term liabilities.
The adjustments were rapidly introduced and passed during the hectic final days of the spring legislative session.
Chicago pension liabilities grow further
“The City was given very limited time to respond and was unable to conduct a fully validated, in-depth analysis before the hearing and the bill’s passage,” a spokesperson for Jaworski said.
Democratic Rep. Stephanie Kifowit countered that it was “disingenuous” for the city to suggest the bill came at the last minute, noting the city knew the adjustment was a possibility for years. She pointed to video-gaming terminals as a potential funding source, although critics worry these could impact revenues at Bally’s casino, currently earmarked for public safety pensions.
State Sen. Li Arellano Jr., a Republican from Dixon, opposed the bill due to concerns about adding more debt onto Chicago taxpayers. “Given the low funding levels of Chicago’s pensions, I could not in good conscience say, yes, let’s throw more debt onto Chicago taxpayers.”
The bill’s progression reflects an ongoing struggle to balance the financial needs of public safety pensions with the economic capacity of the city’s taxpayers.
As Chicago’s public pensions are already underfunded by more than $35 billion, this decision exacerbates the city’s pension crisis.