Thursday 18th October 2018

Cities across Illinois feeling pension squeeze

Cities across Illinois feeling pension squeeze

  • By Cole Lauterbach and Greg Bishop | Illinois News Network
FILE - Normal, Illinois
The historic Normal Theater in Normal, Illinois.

Willjay | Wikimedia Commons

ILLINOIS NEWS NETWORK

A growing number of cities across Illinois are cutting services or hiking property taxes in the face of growing pension costs.

This is the time of year when many municipalities in Illinois are putting the finishing touches on their budgets for the coming year. A number of them are falling short on funds because of their growing pension bills. City of Normal officials blame their latest property tax hike squarely on rising pension costs. Palatine officials are debating a tax hike for the same reason.

Ted Dabrowski, president of the financial watchdog Wirepoints, predicts that this is just the tip of the iceberg.

“You’re going to start to see some of these cities go under,” he said.

Some of these cash-strapped cities, Dabrowski said, will eventually become insolvent without some ability to restructure their debt via bankruptcy.

“Without it, you’re going to see more policemen get fired,” he said. “You’re going to see more firemen get cut. You’re going to see more ambulance services get cut.”

The city of Mattoon announced this summer that it will be forced to scuttle its ambulances in April after receiving pension bills that are more than half a million dollars higher than they were last year. City Administrator Kyle Gill said service cuts are a last resort, but the city has no choice.

“Pension costs have climbed so high that it’s become unsustainable,” he said.

The city can’t mimic the longstanding habit of the Illinois General Assembly and short its annual pension obligations.

“The unions can file with the comptroller to hold any money that we would receive from state-shared revenues,” Gill said.

Springfield Budget Director Bill McCarty says the capital city’s growing pension costs are beginning to cut into services.

“It’s going to require us to reduce other services just to meet our pension obligations,” he said.

In the past, McCarty said, the city was able to take the excess property tax money that wasn’t spent paying pensions and put it toward things like library services. This year, Springfield will have to spend money that was previously earmarked for services and put it into paying legacy pension contributions.

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