UChicago Students Propose Solutions to Chicago’s Pension Crisis

The University of Chicago’s Harris School of Public Policy has selected three proposals for the final round of its inaugural Harris Policy Innovation Challenge, which tasked student teams to devise innovative solutions to Chicago’s biggest financial problem: $35 billion in unfunded pension liabilities.

The three finalist teams will present their proposals at a live event on April 3, where a panel of municipal finance experts will pick the winning team based on the novelty, efficacy, and political feasibility of the solutions offered.

Judging the finalists’ proposals at the April 3 live pitch session will be:

• Dominic Garcia – Chief Pension Investment Strategist, CBRE Investment Management
• Alexandra Holt – Executive VP for Finance and Administration, Art Institute of Chicago
• Christian Mitchell – VP for Civic Engagement, University of Chicago
• Andrea Sáenz – President and CEO, The Chicago Community Trust
• David Wells – former CFO and VP of Financial Planning and Analysis, Netflix

The Harris Policy Innovation Challenge, launched last fall, encourages students to apply their insights and creativity toward solving urgent real-world challenges facing municipalities, states, and the nation.  The inaugural competition challenged students to find novel and workable solutions to Chicago’s pension crisis, which is among the worst in the nation. The city spends roughly one of every five taxpayer dollars on pensions, and more than 80% of property-tax dollars on retirement payouts, and the price tag has only continued to rise with time. Chicago isn’t alone: nationally, the public pension shortfall is nearly $1.5 trillion.

More than 50 graduate students from across the University of Chicago’s professional schools participated in the challenge. Each student team worked with a professional mentor to come up with a range of solutions that bear in mind labor, business, and investor perspectives. Key leaders from the public and private sectors—including Jack Lavin, the CEO of the Chicagoland Chamber of Commerce, and Jennie Huang Bennett, former CFO for the city of Chicago—brought their expertise to a series of talks that added real-world depth and context to the competitors’ policy ideas.

The ideas proposed by the finalists include:

• revamping Chicago’s pension investment scheme
• bringing together Chicago’s five pension plans under one governing body
• increasing the state income tax in two stages
• deregulating cannabis licensing to grow tax revenues
• adding tolls to DuSable Lake Shore Drive
• overhauling the process of selling vacant, city-owned lots in Chicago
• imposing a public safety tax on residents to free up other funds

Justin Marlowe, a Harris School professor and the director of the school’s Center for Municipal Finance, led the competition and had this to say about the finalists’ proposals:

“Chicago’s unfunded pension burden has been an unshakeable policy issue, and one that is overdue for a fresh approach from the people who it will affect the most: the next generation of taxpayers, policymakers, and civic leaders. The solutions put forward by the teams in the Harris Policy Innovation Challenge reflect the diversity of ideas and perspectives of the University of Chicago’s student body. I am impressed by the breadth of their focus, the depth of their analysis, and the creativity of their thinking in tackling the city’s pension crisis. Simply put, these are ideas that policy makers should take seriously.”

Register for the April 3 event.

Learn more about the Harris Policy Innovation Challenge.

Media Contact:

Tyler McGaughey
tmcgaughey@uchicago.edu