May 31, 2025
Dear Governor Pritzker, Speaker Welch, and Leader McCombie:
Earlier this week we wrote to express our concern about the prospect of sweeping pension legislation being passed in the final days of session without proper vetting. We emphasized the need to exercise caution with respect to pension legislation to avoid making large-scale changes without fully understanding the financial ramifications, which can never be undone.
Unfortunately, we continue to see action taken on financially damaging pension bills. In addition to the sweeping pension bill proposed by Rep. Jay Hoffman (SB1937, HA 1), a bill from Sen. Rob Martwick affecting the City of Chicago’s pensions emerged (HB3657, SA 2) and was quickly approved by the Senate.
As currently written, this bill would increase pension benefits for Tier 2 police and firefighters in Chicago, which would be significantly damaging to the City of Chicago’s finances. According to the City’s estimates, it would add roughly $6.5 billion in required contributions through 2055, costing approximately $52 million in the first year of implementation. It would also add a whopping $11.1 billion to accrued liabilities by 2055. To contextualize the enormity of this increase, $11.1 billion would represent about a 31% increase in liabilities compared to current projections.
The City of Chicago simply cannot afford this massive increase in pension debt. Its pension systems are very poorly funded — the police and firefighter pension funds are 23.4% and 22.8% funded, respectively — and have about $35 billion in unfunded liabilities. The City is facing a budget deficit of about $1.2 billion for FY26. Additionally, Fitch Ratings revised the City’s credit outlook to negative earlier this week, underscoring the precariousness of the City’s fiscal situation. We ask our leaders and members in Springfield not to make it worse and urge that you reject HB3657.
Chicago’s success is critical to Illinois’ well-being. We know you understand the importance of protecting the state’s fiscal progress and its credit rating. We ask that you consider Chicago’s finances through that same lens and reject HB3657.
As we noted in our last letter, we stand ready to assist you in addressing pension issues across the state. Please reach out if we can be of assistance in any way.
Thank you for your consideration.
Sincerely,
Derek Douglas, Civic Committee of the Commercial Club of Chicago
David Greising, Better Government Association
Joe Ferguson, Civic Federation
Jack Lavin, Chicagoland Chamber of Commerce