Steve Malanga of the Manhattan Institute reported yesterday on a new study of state government pension funds in Illinois and Cook County released by the Illinois Commission on Government Forecasting and Accounting. (See the link below for Malanga’s informative summary.)
The rapidly rising cost of government pensions negotiated by union bosses wielding monopoly-bargaining power under Illinois state law is a key reason why Chicago and the Prairie State as a whole are both in grave fiscal peril. And taxpayer liabilities for the pension funds of Chicago’s unionized police and firefighters are soaring the most rapidly of all.
After reviewing one of the most “hair raising” charts in the study, Malanga commented:
In just six years, . . .the number of police retirees has grown from 58 percent of the active police force to 75 percent of the police force. At the current rate of growth in retirees and decline in active cops, in six more years retirees will equal those police still working.
Union contract clauses, instigated and perpetuated as a consequence of Big Labor bosses’ demands, have for many years been encouraging healthy police and firemen to retire when they are in their early fifties or even their forties or thirties. They then immediately begin collecting full or nearly full pensions for 30-40 years or more plus retirement medical benefits. Since the average police or fireman retiring today can expect to spend at least as many years in retirement as he did on active duty, it shouldn’t be surprising that Chicago is poised to have as many retired cops as active ones by 2020.
Big Labor Mayor Rahm Emmanuel and his predecessors have had, to say the least, unimpressive records with regard to standing up for taxpayers and battling the wasteful and fiscally devastating schemes of government union bosses. However, Emmanuel and other Chicago mayors have recognized that the Windy City’s public-safety union pension systems are unsustainable and called for change.
Unfortunately, under the current state public-sector monopoly-bargaining and binding-arbitration laws governing labor relations at the municipal and state levels in Illinois, there is little elected officials can do to reform pension rules that give public servants an incentive to retire with full benefits when they are in the prime of their lives without union officials’ acquiescence.
And even in Chicago, which is clearly already far along on the path to bankruptcy, public-safety and other government union bosses show no sign of willingness to agree to reforms that will substantially change the counterproductive retirement incentives that are currently entrenched.
The only viable way to save Chicago from bankruptcy is for Illinois elected officials to curtail sharply, or eliminate altogether, the monopoly privileges government union chiefs wield over public employees. That means any Illinois fiscal reform package that does not include genuine state labor-law reform is not serious.