City Officials Warn Of Huge Property Tax Hike If Law Passes
CHICAGO (CBS) - Gov. Pat Quinn will not say if he plans to sign new pension legislation that has Mayor Richard M. Daley upset over increased costs they say could send property taxes skyrocketing.
Lawmakers in the state House and Senate approved legislation this week that requires municipalities to pay more into pension funds over the next 30 years to help catch up underfunded pension systems for local firefighters and police officers. It also reduces benefits for future employees.
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Under the law, cities and other municipalities in Illinois would be required to fund the pensions for their workers at 90 percent by the year 2041.
In the city of Chicago alone, that amounts to some $500 million a year starting in 2015.
“This would be the largest property tax increase in the history of the city of Chicago,” Daley said Thursday.
An older law let Illinois towns avoid paying into pension accounts, and they often did.
Quinn said Friday he needs to analyze the bill, but called it an “important area of reform” that is necessary at the local level.
Chicago officials have warned it could mean a 60 percent increase in property taxes to pay the added costs.
Quinn says he’ll meet with Mayor Daley to talk about his concerns.
The proposal is reminiscent of a law Quinn signed earlier this year reducing benefits for future state employees to help ease the burden of state pension systems that are underfunded by more than $80 billion.