* Press release…
Morrison Pushes for Real Pension Reform
SPRINGFIELD—Today, State Representative Tom Morrison (R-Palatine) joined Wirepoints President Ted Dabrowski and fellow lawmakers at a press conference in the state capitol to discuss new research on Illinois’ pension crisis.
The recently disclosed Wirepoints’ research sheds new light on the effect the pension crisis has on local municipalities. Specifically, over a hundred of Illinois’ largest cities have received an “F” grade for their local pension funds, compared to 2003 in which only seven cities got an “F” grade.
For Rep. Morrison, who serves on the House Personnel and Pensions Committee, this serious issue cannot be ignored.
“We’ve all heard about the 5 statewide pension systems that are in crisis, but this research looks at the pension crisis happening in our home communities,” said Morrison. “Our cities are struggling, property taxes and fees are rising, and the added unfunded mandates placed on them is making matters worse—the research proves that.”
The legislature has not yet taken up impactful pension reform matters this spring, despite the growing liabilities at the state and local level.
At their press conference today, Dabrowski discussed the rising costs for Illinois’ 650 local pension funds—which has a direct effect on city budgets, taxpayer wallets, and the retirement security of hundreds of thousands of police, firefighter and municipal workers and retirees.
The key findings of Wirepoints’ report include the following:
* Workers’ retirement security has declined in an alarming number of Illinois cities. In 2003, just 21 of 175 cities analyzed had less than 60 cents on hand for every dollar they needed to fund future benefits of their city workers. By 2019, 99 of the 175 cities were below 60 percent funded. A 60 percent funding level is often seen as a point of no return from which pension funds can’t recover.
* City taxpayers have increasingly paid more to pensions over the past 16 years, yet the pension shortfalls are far larger today. Pension contributions of the 175 cities have nearly quadrupled to $960 million in 2019 from $250 million in 2003, yet local pension shortfalls still tripled to $11.8 billion, up from $3.4 billion in 2003.
* Pension costs as a share of city budgets have doubled, crowding out spending on core government services. City pension contributions as a share of general budgets have doubled to 17 percent in 2019 from 8 percent in 2003.
* Some local pension funds have turned upside down – they now have more retirees drawing benefits than active workers contributing. In 2003, only 15 cities had more pensioners drawing benefits than active workers making contributions into the fund. In 2019, that number rose to 112 cities.“We have ignored this problem for far too long,” continued Rep. Morrison. “Today’s research should be a stark wakeup call; ignoring this massive, growing problem won’t make it go away, it will only make it more difficult to dig us out of this hole.”
In my suburban Cook County district, property taxes remain a top concern. Additionally, the hidden cost is that property values are not appreciating as they should. This is a huge weight on the state and its residents, and why we must have pension reform now.”
While there was a group of Republican lawmakers present at today’s press conference, not one Democrat was in attendance, leading Dabrowski to call for their support.
I followed up and asked what his actual reforms were…
For starters, he would support a constitutional amendment. He also supports allowing municipal bankruptcy.
* The Question: Should the state allow municipalities to declare bankruptcy without state permission? Make sure to explain your answer. Thanks.
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