Welcome to the Senate Republican Press Search.

Full text for Articles for Today, Thursday, November 15, 2018 - 2 Articles

Print

At budget time, Illinois towns consider large tax hikes as pension costs mount
Illinois Watchdog.Org
Thursday, November 15, 2018  |   Article  |   By Cole Lauterbach
Budgets--Local , Local Government (60) , Pensions (70)
Municipal leaders across Illinois face cutting services or hiking taxes to pay for growing police and fire retirement contributions as pension costs continue to increase.

The Carterville City Council voted Tuesday to approve a 30 percent property tax increase to cover ballooning pension costs.

“It’s extremely frustrating,” Mayor Brad Robinson said. “Our total pension liability in 2011 was $60,000. Seven years later in 2018, it’s almost $430,000.”

Property owners in Evanston, Urbana, Danville, Naperville, Peoria, Moline, Quincy, River Grove, Geneseo, Mundelein, and others have reported looking at higher taxes to cover growing pension costs in budget discussions.

“This is going on all across the state,” said Mark Glennon, founder of financial watchdog Wirepoints. “From Carterville in southern Illinois to some of the largest cities in the state. These pension contributions are eating their lunch.”

Pension obligations are also affecting the creditworthiness of municipal bonds.

S&P Global Ratings lowered suburban Oak Lawn’s bond rating four notches, a highly-unusual downgrade, based on what the agency called “structural imbalance in the village's budget and the very weak funding levels in its police and firefighter pension plans.”

Some towns have levies high enough that, combined with growing home values, allow them to hold the line on taxes. After raising taxes in previous years, Normal’s property tax rate will drop based on rising property values under the same levy.

Unlike some other municipalities, Carterville officials have contributed the actuary required contributions, or ARC. Some towns have failed to keep up with contributions, exacerbating pension funding problems. Carterville was required to increase pension contributions after its population rose above 5,000, which forced the city to switch from the Illinois Municipal Retirement Fund to regional police and fire pension accounts in 2012. 

The move to regional pension systems required the city’s pension fund balances to be at least 90 percent funded by 2045. Starting in 2018, Illinois law allowed pension funds to go after municipalities that fail to make the required contributions, garnishing their state-allocated tax revenue before they get it.

“We’re in a situation where somebody 100 miles away made rules,” Robinson said. “For a mayor of 5,600, this is quickly going to become unsustainable.”

Glennon said the state needs to take emergency measures to address the rising pension costs before the next economic downturn. Failure to address the problem could leave municipalities with pension bills so high that it would be virtually impossible to raise taxes high enough to cover the cost.

The 30 percent property tax hike in Carterville will cost the average homeowner there an additional $50 in city taxes in 2019.


Illinoisans share tax concerns with lawmakers
Illinois Watchdog.Org
Thursday, November 15, 2018  |   Article  |   By Greg Bishop
Budget--State (8) , Taxes, Graduated/Progressive , Taxes, income (86)
Taxpayers gathered at the Illinois capitol Wednesday to share concerns about the state's high taxes.

Connie Cane came to Springfield from Gilberts, Illinois. She said her chief concern is property taxes, and not being able to sell her home if she were to leave the state. She also opposes the idea of a progressive tax.

“I am worried about the types of legislation that could pass and the fact that there are not enough Republicans to say ‘no’, ” Cane said.

The prospect of a voter referendum to change the state constitution's flat tax to a progressive tax is more certain after last week’s election that solidified Democrat control of not just the state legislature, but also the governor’s mansion. Democrats, including House Speaker Michael Madigan, have given their support to a progressive income tax structure.

Cane said lawmakers aren’t trustworthy enough for more tax dollars because they haven’t enacted certain reforms.

Riverton resident Beverly High is retired. She said one reform lawmakers should pass is a spending cap.

“They should not be allowed to spend more each year than maybe perhaps what the GDP is,” High said.

Several measures that have bipartisan support to put a spending cap in place haven’t advanced.

Kem Wilson said one of her concerns is Madigan's power Speaker of the House and the chairman of the Democratic Party of Illinois.

Wilson, who owns and operates The Look Studio and Day Spa in Jacksonville, said as a small business owner a progressive tax would penalize her the more her business succeeds. She opposes that. She also opposes any idea of a service tax.

“It’s just tax on tax and the problem is it’s never enough,” Wilson said. “It’s just they’ll pass this just like they passed the 32 percent [income tax increase] a year-and-a-half ago, okay, they’ll just pass more.”

Wilson said it’s no wonder people are leaving the state.

High said she doesn’t want to leave her family and start over somewhere else. She said lawmakers have to be responsible with tax dollars.

“They need to balance our budget,” High said. “This is ridiculous. I have to balance my budget. Everybody else has to balance their budget. There’s no reason why our legislators shouldn’t have to balance their budget every year.”

Illinois hasn’t had a truly balanced budget in years. Despite praising the current budget as balanced, it is actually over $1 billion in the red.

Those at the statehouse Wednesday to talk with lawmakers about their concerns were also treated with a bomb threat that evacuated several floors of the building. After an all-clear was given, activity resumed.