Jim Dey | Police, fire pensions putting heavy pressure on towns

Jim Dey | Police, fire pensions putting heavy pressure on towns

As the Democratic and Republican gubernatorial candidates crisscross Illinois in search of votes, each has his own points of campaign emphasis.

Republican incumbent Bruce Rauner never misses a chance to bash Democratic House Speaker Michael Madigan as the source of many of the state's woes. He contends that only bold economic reforms can lift the state from fiscal despair.

Democrat J.B. Pritzker, a billionaire Chicago businessman, just as reflexively denounces Rauner as a "failed governor." Pritzker also touts his plan for income tax increases he intends to use to finance a series of social welfare programs.

But to hear some critics tell it, there's one issue neither wants to address — the $130 billion public pension shortfall elephant standing in the corner of the room. It's a ticking time bomb few want to discuss, let alone take steps to solve.

"Rivals Bruce Rauner and J.B. Pritzker ... so far have found common purposes in tiptoeing around the pension minefield that likely will dictate the success or failure of whichever of them is sworn in next year," writes Tim Jones of Chicago's Better Government Association.

Jones reports "that chronic political instinct to put off tough decisions until after the next election has ballooned the cost and narrowed pension-fixing options to either expensively painful or pie-in-the-sky."

But Illinois' public pension problem is not just a singular issue — it's a plural problem.

That's because Illinois municipalities also have a pension problem starting to bubble to the surface.

Anyone heard of Harvey? It's an impoverished community in the Chicago area that's been borrowing from Peter to pay Paul for years — at the expense of its police and fire pension systems.

Illinois Comptroller Susana Mendoza, relying on state law, recently started garnishing Harvey's tax revenues to make up for what Harvey officials have not been paying into the city's police and fire pensions.

Harvey is challenging the state's right to garnish its revenues, and the issue is tangled up in the courts.

But Wirepoints, an organization that does research, commentary and news aggregation focused on state government, reports the municipality pension "mess is everywhere" and that "Harvey could just be the start of a flood of garnishments across the state."

Wirepoints' Ted Dabrowski and John Klingner report that municipal pension woes run "from East St. Louis to Rockford and from Quincy to Danville."

The fallout from Comptroller Mendoza's garnishment order in Harvey was dramatic.

After losing $1.5 million since February, Harvey officials laid off 31 employees — 13 police officers and 18 firefighters, half the fire department.

Citing public records, Wirepoints indicates that "more than 400 police and fire public pension funds, or 63 percent of Illinois' total downstate public safety funds, received less funding than what was required from their cities in 2016 — the most recent year for which statewide data is available."

Theoretically at least, that status makes those communities vulnerable to garnishment orders by the comptroller's office.

It all adds up to a $10 billion municipal pension under-funding problem.

Chicago's municipal pensions are not in any better shape. Mayor Rahm Emanuel has been struggling for years to deal with the problem, instituting a series of property tax hikes and seeking benefit givebacks from unionized employees.

It's not just low-income or impoverished communities — East St. Louis, Centralia — that are behind the pension eight ball. So are upper-income communities like Skokie, Northbrook, Wilmette and Naperville.

Local communities are doing better than most.

Many Illinois communities have fire and police pension funding levels in the 20 percent and 30 percent range.

But in Champaign, the city contributed $5.4 million to its police pension, twice what was required. That lifted the fund to a 79 percent funding level.

And Champaign contributed $3.3 million to its fire pension, $940,000 extra. The city's fire pension fund is 79 percent funded.

Urbana contributed $1.03 million to its fire pension, $20,000 short of the required contribution. That fund is 87 percent funded. Urbana contributed $1.3 million to its police pension, slightly more than required. It's 74 percent funded.

Rantoul contributed $683,000 to its police pension, $136,000 short of what was required. Rantoul's police pension is 66 percent funded.

Despite $2 million contributions each to its fire and police pensions, Danville's funds are 17 percent and 30 percent funded, respectively.

WirepointsI reports that even as municipal pension contributions have doubled since 2005, pension debts also have doubled. It attributed the problem to "ballooning pension promises" that have seen total pension benefits owed to public safety workers and retirees go from $2.6 billion in 1987 to $23.4 billion today — "nearly an 800 percent increase."

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or by phone at 217-351-5369.