SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Behind the outrage

Monday, May 26, 2014

* You may recall this astonishing statement made earlier this month

Rockford Mayor Larry Morrissey said Wednesday that Illinois towns and cities would be in a better position to face their public safety pension obligations if they had the ability to file for bankruptcy.

The statement came during a downstate and suburban mayors’ news conference held in Illinois’ state capitol.

“If the state doesn’t give authorization to go to bankruptcy court, you simply cannot do it,” Morrissey said. “Without that … cities are simply left with no recourse when dealing with collective bargaining … in police and fire pensions. So what we end up being is boxed in. … Frankly I wish we could appeal directly to a bankruptcy court, I think it would give us more leverage to get deals done.”

* The firefighters gathered some numbers to show some of the hypocrisy behind the mayors’ outrage about their rising first responder pension costs

According to the documents, Decatur has seen a 141 percent increase in the amount they’ve contributed to the firefighter pension system since 2003. By contrast, the city’s [Illinois Municipal Retirement Fund] contribution has risen 170 percent.

In Carbondale, city contributions to the firefighters rose 194 percent in the past 10 years. Contributions to IMRF rose 183 percent.

Bloomington’s contributions to firefighters have risen 146 percent since 2003. Contributions to IMRF rose about 82 percent.

Pat Devaney, president of the Associated Fire Fighters of Illinois, said one reason for the silence from mayors on IMRF is that the mayors are covered by IMRF.

Sen. Terry Link, who is trying to put together a first responder pension reform plan, was on Rick Pearson’s WGN Radio show over the weekend and talked about his efforts. Click here to listen.

- Posted by Rich Miller        


14 Comments
  1. - Joe M - Monday, May 26, 14 @ 1:31 pm:

    If cities like Rockford were allowed to file for bankruptcy, could they selectively choose the bills they wish to renege on? Or if they filed for bankruptcy, wouldn’t they also have to be reneging on other bills they owe - such as money owed to bondholders and vendors?

    Cities filing for bankruptcy to renege on bills seems a very slippery slope. Who would ever want to buy their bonds or do business again with such a city?


  2. - Judgment Day - Monday, May 26, 14 @ 1:56 pm:

    “Cities filing for bankruptcy to renege on bills seems a very slippery slope. Who would ever want to buy their bonds or do business again with such a city?”

    Actually, that’s one key element as to why the Cities want to go there. Their financial situations are becoming ‘needs’ vrs. ‘needs’, and the pension funding requirements are starting to hollow out all the funding for most other operations within the municipality.

    Here’s the statuatory reference for non home rule municipalities for funding both fire pensions and police pensions. Note there is no rate limit.

    “Firefighters’ Pension 40 ILCS 5/4-118

    DOR Code 013

    No rate limit. An amount sufficient to meet the needs of the pension fund requirements of the municipality of not less than 5,000 nor more than 500,000 population. Municipalities of less than 5,000 population with a full-time fire department can adopt by referendum.”

    Here’s the statuatory reference for police pension:

    Police Pension 40 ILCS 5/3-125

    DOR Code 015

    No rate limit. An amount sufficient to meet the needs of the pension fund requirements of the municipality, of not less than 5,000 nor more than 500,000 population. Municipalities of less than 5,000 population may establish fund by referendum.”

    Link is: http://tax.illinois.gov/publications/localgovernment/ptax-60.pdf

    Here’s where the problem comes in. Rockford is home rule, but they are also tax capped. So, they can keep raising the tax rates pretty much forever and the taxpayers bleed. But, the problem is, IF the City sets a self imposed max limit, the police and fire pension portion of the RE taxes are eating them up from the inside out.

    And, to make things worse, the tax base (what is often called EAV, or ‘Taxable Value’) has been pretty stagnant, if not lower due to the so-called ‘Great Recession’. So, the end result is the tax base stays the same, but the tax rates increase, and guess where much of the ‘increase’ gets directed to.

    Haven’t seen the tax calc. sheet from the County Clerk’s office for the last few years, but if they are like most places, the RE taxable value (tax base) has been going down, and the tax rates are going up, and under Tax Cap, you can ‘adjust’ your tax rates, so guess which tax rates are getting ‘fed’ - funds for retirement costs.

    Be interesting to see what the trending is on those tax extensions for municipalities…..


  3. - Pacman - Monday, May 26, 14 @ 2:07 pm:

    Joe M; It’s monkey see, monkey do. The cities want to follow the states lead and selectively renege on contractual obligations, i.e. pensions. If a city really has to file bankruptcy then all creditors have to share the pain, likewise at the state level. The last time this story was on Capitol Fax. I asked if anyone knew of any city in the state thats on the verge of bankruptcy. Can anyone name one? Also would cities have to sell any assets, for example if Springfield filed bankruptcy would they have to sell the land they own to build a second lake or even CWLP?


  4. - Joe McCoy - Monday, May 26, 14 @ 2:10 pm:

    That’s a nice try, but looking at the percentage growth in employer pension costs doesn’t tell the full story about the rising pension costs confronting cities. It’s a statistic offered to misrepresent a reality. One needs to look at the actual DOLLAR AMOUNTS being allocated to fund pensions. IMRF participation costs MUCH less money per employee compared to the police and fire systems. It’s also important to know that the total number of IMRF employees is larger than the number of firefighters or police officers in most cities. Police and fire pensions cost much more when you analyze the cost on a per employee basis. As a defined benefit plan, IMRF is a much better value for taxpayers than the police and fire systems. And not all mayors and other elected municipal officials are in IMRF, either.


  5. - Joe McCoy - Monday, May 26, 14 @ 2:12 pm:

    Judgment Day - Rockford is non-home rule. The voters rescinded home rule powers by referendum years ago.


  6. - Judgment Day - Monday, May 26, 14 @ 2:42 pm:

    “Judgment Day - Rockford is non-home rule. The voters rescinded home rule powers by referendum years ago.”

    Joe, that’s even WORSE news for Rockford. That means they are really screwed, because then they have to work their ‘adjustments’ within their total overall tax rate as extended for their tax year. Tax Cap (Property Tax Limitation) stuff.

    Short story: IF their tax rate for all their different funds is at, let’s say $1.50 per $100 taxable value, they could in theory move all that $1.50 into only 2 funds (police/fire pensions) - of course, there’s nothing else left for anybody or anything. That’s worse, most extreme case, and probably (hopefully) not happening.

    But the real key is what is happening to those 2 RE tax funds (police/fire pensions) compared to all the other funds. If they keep increasing, and other funds are staying the same or decreasing, well, eventually you will end up with a hollowed out government.

    Actually, you also need to watch the basic IMRF fund for the rest of the City. That’s Fund 005.


  7. - Ahoy! - Monday, May 26, 14 @ 2:56 pm:

    IMRF is also around 90% funded and the GA is not constantly passing pension sweeteners for it. Also, the firefighters only gave 3 examples and one of them the city pays 50% less to IMRF than for police and fire pensions.

    Also, Joe McCoy makes a good point about percentages vs actual dollar amounts. The IMRF payout is also not the last day of service like the police and firefighters, that is a huge cost driver.


  8. - Joe McCoy - Monday, May 26, 14 @ 3:42 pm:

    Follow the link for a chart that uses DOI data to illustrate the growth in employer pension contributions from 2004-2012. The data shows the total dollar amounts paid by employers for fire, police, and IMRF pension participation. Note the substantially higher costs necessary to fund police and fire participants compared to those that participate in IMRF. This is why the mayors are so concerned. IMRF is much more affordable per person than the police and fire systems and the cost growth per employee isn’t nearly as substantial. http://www.iml.org/file.cfm?key=8359


  9. - Anon - Monday, May 26, 14 @ 4:27 pm:

    == IMRF participation costs much less per employee ==

    Few staffers in municipal offices risk their lives on a daily basis. Consequently, they earn lesser benefits than those who do risk their lives, and who also work shifts that keep them away from family time, and face stress more acute than in the typical village manager’s office.


  10. - Anon - Monday, May 26, 14 @ 4:33 pm:

    == no pension sweeteners for IMRF ==

    How about that annual thirteenth pension check?


  11. - wordslinger - Monday, May 26, 14 @ 5:23 pm:

    Cities filing bankruptcy to slink away from pension obligations would certainly be government “run like a business.”

    Some of the biggest businesses in the country have pulled that stunt, to their shame.


  12. - Joe McCoy - Monday, May 26, 14 @ 5:37 pm:

    ==Few staffers in municipal offices risk their lives on a daily basis. Consequently, they earn lesser benefits than those who do risk their lives, and who also work shifts that keep them away from family time, and face stress more acute than in the typical village manager’s office.== I don’t think anyone is suggesting that benefits should be reduced to IMRF levels. It’s fair to ask, however, where the revenue will come from to fund the current benefit levels into the future? There’s certainly not much support for increasing property taxes. So who pays for it? If cuts are suggested, precisely where should they be made so as to fully-fund the pension obligations?


  13. - Pacman - Monday, May 26, 14 @ 7:01 pm:

    Despite what organizations like GASB say pension systems don’t need to be fully funded immediately. Reamortize the pension repayment schedules to give cities relief. Many pension systems have been operating for years with less than 80 percent funding. Not everyone is going to retire tomorrow. The cities and state want instant relief to a problem they created over decades of under funding. This problem will take decades to correct.


  14. - Anon - Monday, May 26, 14 @ 8:56 pm:

    Joe McCoy hit it squarely on the head. At some point, the police and firefighters need to face economic reality and be a part of the solution. For several sessions, the state unions and teachers said no to reasonable benefit reductions. Look what happened to them. The train is leaving…get on board.


TrackBack URI

Sorry, comments for this post are now closed.


* Fun with numbers
* Teamsters want fired IDOT workers spared
* Rahm reverses course, Voices backs wage hike
* Fracking regs to be released Friday
* Making the big banks pay
* Quinn vetoes another speed limit bill
* Missing the point
* Ballot initiatives are definitely a major national thing
* *** UPDATED x1 *** Callis unveils first TV ad, GOP says she's "lived a life of privilege"
* Inversion and off-shoring explained in just a few words
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * iPhone 6 global launch could be between September 16 and 19?
        * Confirmed: $48-$50 off T-Mobile iPhone 5s and iPhone 5c
        * TeamViewer QuickSupport update brings support to more phones
        * Gear We Love: Rickshaw Commuter line takes the mess out of messenger bags
        * Samsung steps-up its Note 4 campaign with bunch of new videos
        * Apple May Reveal A Wearable Alongside New iPhones In September
        * Messaging App Tango Expands Its Channels Program With BuzzFeed And Other New Publishers

        * What's The Best Solid State Drive For The Money?
        * Do you trust Facebook with your personal information?
        * Huawei Ascend P7 Sapphire Edition Confirmed
        * Cloud Storage Showdown: Google Drive, Dropbox, iCloud and More Compared
        * Scientific Study Reveals How to Make Perfectly Browned Pizza Cheese
        * Here’s the first video teaser for the upcoming Asus smartwatch
        * Bestselling Author and Journalist, AJ Jacobs [Cool Tools Show #009]

        * White Sox get their new core back
        * Noesi, White Sox look to end skid against Indians
        * Petricka, White Sox burned by 10th-inning homer
        * Indians 8, White Sox 6 (10 innings): Losing streak hits seven
        * Petricka, White Sox burned by 10th-inning homer
        * White Sox sending seven prospects to Arizona Fall League
        * Rodon will start Saturday -- for Triple-A Charlotte


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Even Chicago's Championship Little League Team .....
        * Chicago Sun Times Article on Ties Between Repub.....
        * Are you ready for the #IceBucketChallenge?..
        * Chicago Salutes Jackie Robinson West Little Lea.....
        * Vallas: Rauner plan would cost schools $4 billion..
        * Governor and Senate races top labor’s politcal .....
        * Pregnant Women Just Earned More Workplace Right.....
        * Double down on outside lottery management..
        * AP: State Senate refuses initial vote to ban mi.....
        * Member of Gov Quinn's Team Steps Down - 1340 WJOL..


        * Illinois Supreme Court reopens after renovations
        * US Senate candidates disagree over debate schedule
        * Vallas: Rauner plan would cost schools $4 billion
        * Cardinal George cancels plans to travel to Rome
        * Oakwood Hills village hall to reopen after threats
        * Chicago honors Little League champions with parade
        * 2 Chicago men sue taxi company over brief kiss
        * Chicago's Little League champs return as heroes
        * Still unclear how mortar shell ended up at plant
        * Candidates for gov, US Senate to speak in ag forum

        * Vallas: Rauner income tax rollback would cost schools $4 billion
        * Durbin, Oberweis disagree over debate schedule
        * Concealed carry data botched by error
        * Teamsters vow to fight IDOT layoffs
        * Quinn vetoes bill raising speed limit to 70 mph on all interstates
        * Quinn vetoes bill increasing speed limit on all interstates
        * Quinn deputy staff chief going to private sector
        * Quinn signs law allow study of industrial hemp
        * Quinn: Agencies must follow hiring rules
        * Concealed carry data botched by alphabet error

        * Baker & McKenzie names site for second big overseas back office
        * Cardinal George scraps trip to meet with pope
        * Northwestern, Cadence come to terms on merger
        * Quinn vetoes bill increasing speeding
        * How a mid-air squabble become great advertising


        * Two men suing taxi company, claim they were kicked out of cab after kiss
        * Feds: 100 weapons seized; 14 area residents charged
        * Two victims from police shooting in Chatham are identified
        * Northwestern, Cadence health merger takes effect Sept. 1
        * U of I nurses vote to authorize strike; contract talks continue
        * Man found guilty of cutting neighbor’s ear, fingers with chain saw
        * Fight over Knee Defender leads plane to divert to O’Hare
        * Four shot in South Shore drive-by
        * Emanuel fires back at City Council’s inspector general
        * Dump ‘Fake IG,’  give Ferguson more power


        * Jackie Robinson T-shirts being offered for big bucks online
        * Coverage of the Jackie Robinson West celebration
        * No bomb found after Southwest Side threat shuts intersection
        * Historic St. Charles building to be moved to new location on Wednesday
        * Carly Rousso appearance, group's sentencing stand spark controversy
        * Mayor who survived West Nile stars in warning ad
        * University of Illinois Hospital nurses vote to authorize strike
        * Chicago native suspected of fighting with Islamic State is killed
        * Police officers hurt at South Side disturbance
        * New lawyer appointed for teen held in death of mom in Bali


        * Chicago’s urban farms have yet to harvest sustainable jobs, better health
        * Chicago's urban farms have yet to harvest sustainable jobs, better health
        * Chatham Schools Supt. Talks Growth & Planning
        * Charities Stepping In Where Government Used To Be
        * Green, Libertarian Parties Await Approval For Nov. Ballot
        * Pregnant Workers To Be Protected Under New Law
        * Appellate Court Confirms: Term Limits Not Eligible For Ballot
        * Art At The Illinois State Museum
        * Buy American Sections Required at State Parks & Historic Sites
        * WUIS/SJ-R Business Report: Ameren Gas Upgrades; Carpenter St. Underpass; Pease's Design Change


        * Our Opinion: Get off Facebook and talk to each other
        * Durbin, Oberweis disagree over debate schedule
        * Concealed carry data botched by error
        * Michael Gerson: Too detached to lead?
        * Teamsters vow to fight IDOT layoffs
        * Quinn vetoes bill raising speed limit to 70 mph on all interstates
        * Quinn deputy staff chief going to private sector
        * Quinn signs law allow study of industrial hemp
        * Quinn: Agencies must follow hiring rules
        * Quinn signs pregnancy discrimination measure


        * Carle gets OK to expand
        * St. Elizabeth's certificate of need application includes support from community; rival hospitals object
        * St. Elizabeth's gets support from community; rival hospitals object
        * St. Elizabeth's gets letters of support from community; rival hospitals object
        * Man charged in home invasion
        * Jacksonville volleyball opens with win
        * West Central trivia night set
        * GOLF
        * Eunice Tilton
        * US Senate candidates disagree over debate schedule


        * Oakwood Hills to reopen village hall after threats led to closing
        * Resident nominated for open trustee seat on Island Lake board
        * Healthcare: Northwestern, Cadence to complete merger Sept. 1
        * Magenium Solutions wins Glen Ellyn building award
        * Aeromexico to get Gogo's next generation connectivity service

        * Dem Explains Why He Voted 'Present' on DAC...
        * IRS enforcement agent numbers could drop t...
        * Once-Vulnerable Freshman on Safer Ground i...
        * Immigration dominates Lipinski's town hall...
        * Jesse Jackson Jr. political fund fined nea...
        * Lipinski: Time to stop 'kicking the can' o...
        * Scaletta Armoring Hosts Congressman Dan Li...
        * Tom Kacich: Rauner's focus will soon shift...
        * Jackson Jr.'s political fund fined nearly ...
        * 'Celebrity Crime Files' Season Three, With...

        * Ten Miles Square...
        * 10 things to know about corporate inversions...
        * 10 things to know about corporate inversions...
        * US Senate candidates disagree over debate ......
        * US Senate candidates disagree over debate ......

        * Council of Jewish Women backs call to prob......

        * Chicago Immigration Reform Advocates Press Local ICE Director For Action On Pending Deportation Cases
        * Congresswoman Schakowsky Participates In 'Come Care With Me Day'
        * Bedell to challenge D'Amico in 15th House race
        * Ride-sharing may be forced to steer around insurance company roadblocks
        * ICE deportations protest
        * Study: Wage Growth Remains Sluggish For Most American Workers
        * Chicago suffers deadliest weekend since July 4th
        * Chicago area resort to host "Biggest Loser"
        * Illinois Should Not Budget for Payment Delays
        * Rep Flowers at signing of bill for pregnant workers


        * Governor Quinn Proclaims “Jackie Robinson West Championship Day” - Governor Celebrates with Team and Fans at Rally and Parades
        * Eight Illinois Fire Departments Recognized For Their Fire Prevention Efforts - Award Recipients are an Example of Courage and Commitment to Saving Lives
        * Governor Quinn Signs Law to Stop Discrimination Against Pregnant Women in the Workplace - Governor Signs Landmark Legislation on Women’s Equality Day to Guarantee Women the Right to be Both Mothers and Employees
        * Governor Quinn Opens State-of-the-Art Police Forensic Laboratory in Belleville - New State Police Building Provides Forensic Capability for Southern Illinois Law Enforcement Agencies
        * Governor Quinn Vetoes Uber Bill




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller