Chicago Senator's plan would make income tax hike permanent to pay for pensions
3 months ago
Plan would also call for state retirees to work until 67 and have them pay more toward their pensions
From sj-r.com: The income tax increase would be made permanent and then solely dedicated to pension payments under a pension reform plan floated Wednesday by Rep. Lou Lang.
Under the plan, employees would pay 3 percentage points more of their salaries toward their pensions and the minimum retirement age to receive full pension benefits would be 67 for all five pension systems.
But Lang’s plan does not call for any reduction in pension benefits, something he said makes his plan constitutional. Other pension reform plans floated so far call for a change in cost of living adjustments to retiree benefits, something Lang said makes them unconstitutional.
“We need a pension plan that will not end up in the courts,” said Lang, a Democrat from Skokie. “It’s a plan that doesn’t take anyone’s benefits away.”
Most of the 67 percent state income tax increase is due to expire at the end of 2014. Lang wants to extend it and have the proceeds dedicated to the state’s annual pension payments. The bulk of the tax hike already goes toward those payments.