In its yearly budget analysis, the Civic Federation of Chicago rang the alarm bell about the city’s upcoming pension obligations, calling them "unaffordable" without drastic change in the city’s fiscal strategy.
"This budget should serve as an urgent reminder of the enormous price the City will pay if it is unable to stabilize its pension system," Laurence Msall, president of the Civic Federation, said in a statement. "Mayor Emanuel and his team have made significant fiscal progress in recent years, much of which will be derailed when the City’s unaffordable pension contribution increase takes effect next year."
The reported noted that the city faces a $590 million increase in its required pension contribution in fiscal year 2015, a rise “so sharp it would require a significant increase in the City’s property tax levy, crippling cuts to City services or both.”
The report highlighted a number of specific proposals that could help cut the city’s deficit that it supported, including:
- Phasing out the City’s retiree healthcare subsidy
- Creating an independent financial analysis office for the City Council
- Allowing TIF districts to expire after fulfilling their funding needs and closing unsuccessful TIF districts
- Increasing targeted tax and fees for additional revenue
- Increasing TIF transparency by launching TIF data portal online
As well, the Civic Federation made a series of recommendations to address funding shortfalls in Chicago’s four pension funds that include not pushing back pension contributions and funding level goals, pursuing pension fund consolidation and reform governance of the related pension boards.