Unless you read Jeff Johnson’s guest post on this site yesterday (and several thousand of you did based on my count) you may not know that there is a trial going on in Chicago to enjoin Rahm Emanuel from stealing city retiree pensions.
Last year the Mayor went to his pal Michael Madigan and got the slime down in Springfield to allow him to cut and freeze pension benefits. They wouldn’t wait for the Illinois Supreme Court to rule on their earlier pension grab called Senate Bill 1.
Some city union leaders put their stamp of approval on theft. But not the CTU or AFSCME.
Four unions went to court on behalf of retirees and two retirees testified yesterday.
Mark Brown writes a column for the Chicago Sun-Times.
He drank Rahm’s Kool-Aid that pension theft is needed to balance the city budget.
But even Brown cannot turn away from the faces of real retirees and what pension theft means to them.
Today he writes:
City of Chicago retirees Mary J. Jones and Barbara Lomax took turns hobbling to the witness stand Friday in a Daley Center courtroom to help make the case against reducing city pension benefits.
Jones, 62, and Lomax, 65, are among thousands of retirees whose annual cost-of-living increases took a trim Jan. 1 under a new state law intended to rescue two struggling city pension funds.
Their pensions continue to grow, mind you, just not by as much as they were promised when they retired.
Because of that broken commitment, their lawyers say the legislation negotiated by Mayor Rahm Emanuel with some city unions should be declared unconstitutional.
In the meantime, the retirees want its provisions set aside temporarily until the Illinois Supreme Court has ruled on a similar challenge to a new state pension law.
The Emanuel Administration counters that the law is sound and halting its implementation would risk a financially disastrous negative reaction from credit ratings agencies that want the city to fix its pension problems.
The examples of Jones and Lomax are reminders that, despite what we know to be the bloated pensions of many city workers, little people also will get hurt in the process of cleaning up the mess — although arguably not as badly as they might if the pension funds were allowed to continue on their previous path to insolvency.
But the two grandmothers’ pensions also are a reminder of the foolish mistakes that got us into this jam in the first place.
Jones and Lomax were both beneficiaries of early retirement programs, magical deals in which city workers were allowed to retire early with full benefits.
City officials touted such programs as resulting in an overall taxpayer savings as older workers were replaced by less-costly new hires.
The savings was a mirage, resulting only from the fact the city wasn’t legally required to pay enough money into the pension funds to support the benefits that would eventually have to be paid. It was just one of many such short-sighted decisions now coming home to roost.
Jones was 51 and Lomax 54 when the city offered them what they saw as an attractive retirement package in 2004. They’ve been drawing a pension ever since.
Under the 3 percent annual compounded cost-of-living adjustments applicable under the previous law, those pensions are now some 34 percent greater than when the women retired.
Jones, who spent 33 years working for Chicago Public Library, is scheduled to receive a pension of $42,163 this year. That’s $360 more than she got last year, but $900 less she would have received under the old law. She does not receive Social Security.
Lomax, who worked 19 years in various city clerical jobs, is due a $27,922 pension in 2015 — $235 more than last year but $600 less than previously scheduled. She also gets $56 a month in Social Security.
As you can see, neither woman is on easy street. Jones lives with her mother and two grandchildren and says she is their primary financial support. Lomax lives alone with her chihuahua and two birds and takes 10 medications daily for her blood pressure, congestive heart failure and asthma. Both women tell me they never worked politics.
The new cost-of-living adjustment will pay retirees only 0.85 percent more this year and does not compound. Retirees will receive no adjustment at all in 2017, 2019 and 2025.
Depending on the size of future adjustments, someone with even a relatively modest pension benefit such as Jones and Lomax will lose tens of thousands of dollars over a 20-year period. That’s why the small change results in a huge savings to taxpayers.
Lomax, for one, doesn’t seem so sure she’ll live that long if the city doesn’t restore the full increase, which she calls a “life-or-death situation” because she can’t afford to pay for all her medication.
Retirees emphasize the reduced pension payments are coming at the same time the city is phasing out their subsidized health insurance, which means their net pay is lower than it was last year.
If you’ve followed my coverage of this issue, then you know I’m sympathetic to the needs of state and local governments to pare back the pensions, and I believe Emanuel has struck a reasonable approach.
But we should never lose sight of what a lousy thing it is to take away pension benefits from people who are already retired and were counting on the promises made to them by the people we elected to represent us.
And then there is the question of why we keep electing those people when they don’t represent us?