Homeowners will pay more in property taxes and some city employees will see their retirement benefits cut under a pension reform plan reportedly unveiled Monday evening.
The new deal, reported by the Chicago Tribune, The Chicago Sun-Times and Crain's Chicago Business, aims to cut the city's nearly $20 billion pension debit in half within 40 years. It requires Illinois General Assembly approval.
The plan calls for a property tax increase to the tune of about $50 per year for the next five years for a home valued at about $250,000. City workers would pay 2.5 percent more toward their retirement, up from the current 8.5 percent.
Cost of living increases would also change from the annual 3 percent rate that's compounded every year to an annual 3 percent increase on their original benefit or 50 percent the rate of inflation, whichever is less. Additionally, there would be three years -- 2017, 2019 and 2025 -- that would see no increase in retirement benefits, and employees would need to wait two years instead of one before being eligible for the cost-of-living increases.
In a statement, the We Are One Chicago union coalition said the framework is "an unconstitutional approach that makes onerous cuts to the pension benefits of nearly 50,000 active and retired public servants."
Three of the biggest unions in Chicago are not part of this framework: police, fire and teachers. The police and fire unions stand to get a nearly $600 million increase in their pension payments next year. Emanuel, who faces re-election next year, wants the Illinois General Assembly to delay that increase.