School Information System

Dana Levenson

The good news: The combined funding level of Chicago’s four direct pension funds — fire, laborers, municipal employees, and police — increased by 2.4%, reaching 25.4% at the end of 2024 compared to 2023.

The bad news: That funding level is still just 25.4%.

To put this in perspective, publicly held companies are required to maintain pension funding levels of at least 100%. It’s widely accepted that state and local governments should aim for at least 80%. IBM, for example, has 123% of its pension liabilities funded, and the state of Virginia is at 81%.

Chicago’s pension crisis has been unfolding for over two decades. But now, more than at any point in the past 25 years, the situation is critical. There’s a very small margin between 25.4% and 0%. And with legislation awaiting Gov. JB Pritzker’s signature that would enhance benefits for police and fire pensions, projections show funding levels could drop to just 18% in the coming years. That leaves even less room before hitting zero. Our retired city of Chicago employees — and those planning to retire — deserve far better.

The pension funding level (or “funded ratio”) measures a fund’s financial health. It represents the amount of money currently on hand compared to what’s needed to meet all current and future obligations. For context, in the late 1990s and early 2000s, Chicago’s pension funds were fully funded or close to it. In 2005, the combined funded ratio was closer to 70%. By the end of 2024, it had plummeted to 25.4%.

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Paul Vallas:

Mayor Johnson’s “Tax the Rich” rhetoric masks his intent to solve Chicago’s budget woes with a Seattle style “gross-receipts tax” on business payrolls that projects to raise $1.5B. The group behind the tax is the Institute for the Public Good, which is aligned with the CTU.

Should it pass, or any version of the city’s old Head Tax — a per-employee tax on Chicago businesses — the big sucking sound you hear will be businesses and jobs exiting Chicago.

Meanwhile, the Mayor’s review team proposed a raft of 26 other taxes and fees to be placed on all individuals regardless of income. They include a tax on drivers (congestion tax), restaurant meals, bottled water, garbage pickup, etc.

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Needless to say, this is not helping CTU’s push for a bailout from Springfield.

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more.

Chicago Mayor Brandon Johnson CTU background.

He forgot that he won 17% to 16% because only a third of the city voted. There was no mandate.”

Curiously, Illinois Governor Jay Pritzker has been an active donor and presence in the Wisconsin Democrat Party, including a “keynote speaker”. Money.

The latest on Pritzker:

.@GovPritzker just signed this bill and in one stroke of his pen transformed Chicago police and fire pension funds from 25% funded to 18% funded

$11B added to the $36B, with one signature.

There are 2 paths to dealing with pension liabilities: political courage or kick the can. Here, Pritzker is courting organized labor for his expected prez run in ’28 and will let the city of Chicago and future governors deal with the consequences of this fiscal malfeasance.

Chicago School Board

Chicago Teacher Union