* Setup from Politifact…
“We’ve got 600-plus police and fire pensions Downstate that are on the cusp of insolvency because they don’t have the revenues that they need to be able to keep those pensions going,” [Mayor Lori Lightfoot told the Chicago Sun-Times]. “They’ve done all the things that we have done historically: raised property taxes, sold assets, had their ratings reduced by rating agencies, and they’re out of levers to pull, so they need help just as we do. So this isn’t a Chicago-specific thing.”
* The backtrack…
“I think highlighting that there are lots of police and fire pension systems that are underfunded is accurate,” said Amanda Kass, associate director of the Government Finance Research Center at the University of Illinois-Chicago. “I don’t think it’s accurate to indicate that the majority are on the brink of insolvency.” […]
“The mayor’s point that municipalities throughout the state are struggling with their pension obligations is an important one,” spokeswoman Anel Ruiz wrote in an email. “Approximately 30% of the 632 public safety pension funds in the state are currently funded at ratios of under 50 percent, according to the Department of Insurance.”
That math tracks with the DOI data included in the commission’s report. For comparison, Chicago’s police and fire pensions are both funded at levels below 25%. Just 25 Downstate public safety funds have a ratio lower than that, records show.
It’s difficult to say your city’s pension funds are just like everyone else’s when only 4 percent of Downstate and suburban funds are worse off than your two biggest problems.
…Adding… From comments…
(W)hat has confused me about her “this is a solution for everyone” framing is that I don’t understand what she is proposing that will help downstate towns at the same time as Chicago. Is she suggesting that the real estate transfer tax be raised everywhere, not just Chicago?
* And then there’s this…
Peoria, for example, faced down a $20 million pension gap by cutting its city workforce by about 16 percent — eliminating 22 firefighter positions and 16 police jobs to close its $6 million budget hole.
Downstate, Carterville raised property taxes by 30 percent last year to help cover a shortfall created by a state mandate.
Kankakee increased its municipal sales tax to help pay off its pension tab.
And even little Alton (population: less than 30,000) had to take action: it sold off its water treatment plant for about $54 million to help pay down its unfunded pension liabilities.
Of course, Chicago is much larger and a central pillar of the state’s economy, but lawmakers up for re-election may not see it in purely economic terms. Helping the Windy City gives rhetorical ammunition to political opponents looking to needle incumbents who might approve any kind of a tax hike when so many others were left to fend for themselves.
“Little Alton” is about the same size as Kankakee and both are much larger than Carterville, but you get the drift.
* Also, the property taxes in, say, Rockford (a city mentioned more than once by Lightfoot) are significantly higher than they are in Chicago. Rockford didn’t wait for the state.