Illinois Gov. Bruce Rauner on Friday vetoed a major pension bill pushed by Chicago Mayor Rahm Emanuel.
The proposal would have addressed the city’s vastly underfunded retirement systems for Chicago’s laborers and municipal workers.
Rauner said the bill is a short-term fix and would have ultimately resulted in a tax increase once the city is obligated to start paying more into the systems in 2023.
“Really all they do is kick the can, delay pension payments, schedule pension payments to grow only after Mayor Emanuel is out of office, years down the road,” Rauner said in a video message sent to reporters announcing the veto. “That’s the kind of behavior that created the problem in the first place.”
Rauner said he preferred future Chicago pension bills be included in a broader package of changes aimed at bolstering the underfunded retirement funds for both city workers and state employees.
In an emailed statement Friday afternoon, Emanuel spokesman Adam Collins blasted Rauner’s veto.
“The governor continues to make one irresponsible and irrational decision after another, and his veto today is the latest example,” Collins wrote.
“Instead of helping secure the future of our taxpayers and middle-class retirees, the governor chose to hold them hostage — just as he has done to social service providers, schoolchildren and universities across the state. The governor's actions are harming the most vulnerable in our state, and the people of Illinois deserve better," Collins said.
The mayor’s office also noted the vetoed bill did not authorize a property tax increase. Emanuel has previously said the laborers’ and municipal workers’ pension funds will become insolvent in eight to ten years if nothing is done.
The bill, backed by Emanuel, had required city employees to contribute an additional 3 percent to their own pensions. The city would also have increased its payments into the pension systems through fee and tax hikes that were already approved, including an increase in the 911 surcharge fee — from $2.50 to $3.90 — and a tax increase on water-sewer usage.
Because the bill Rauner vetoed on Friday was passed by a previous General Assembly, the current class of lawmakers cannot vote to override it. But anticipating a possible veto, the Illinois Senate passed an identical Chicago pensions bill after they were sworn into office in January. Several Republican senators did not vote on that measure, but it still passed with a veto-proof majority. The new proposal still needs approval in the House.