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Our View: Grinch-like news on town pensions

Updated: January 24, 2013 6:35AM



As if we haven’t had enough scary news about public-pension funding in Illinois, there’s more to worry about. Overshadowed by the crisis in long-term funding of the state’s five pension funds is a similar issue with municipal police and fire pensions.

These local pension bills are growing rapidly and consuming a worrisome portion of towns’ budgets — to the point where smaller towns without home-rule authority (those under property tax caps) eventually may face bankruptcy if nothing is done to relieve the burden.

A coalition of cities, villages and municipal associations, called Pension Fairness for Illinois Communities, is sounding the alarm and trying to impress upon legislators the need for pension relief for towns and fire protection districts. The group realizes it has a back seat as the Legislature grapples with how best to reduce Illinois’ roughly $96 billion in unfunded pension liability, but the local officials hope lawmakers will follow through on police and fire pensions once the state’s crisis is addressed.

Leaders of the coalition, including Palos Hills Mayor Gerald Bennett and Tinley Park Mayor Ed Zabrocki, say the problem results from the Legislature granting improved police and fire benefits without providing a way for towns to afford them. The situation has worsened since 2000, when lawmakers lowered the minimum retirement age to 50 from 55 and OK’d a compounded, 3 percent yearly cost-of-living raise for retirees.

The result? More towns and fire districts in a budget vise — caught between rising pension costs and strong public pressure to hold the line on the property tax (or unable to raise it because of the tax cap). They must increase the tax or reduce costs elsewhere, i.e, layoffs and fewer services.

The coalition’s reform package: police and firefighters paying more for their pensions, killing the compounded raise for retirees, returning the minimum age to 55 and raising service time to 35 years for a maximum pension.

The police and fire unions will fight the plan, but the problem will only get worse. When legislators approve state pension reform, they should then quickly deal with municipal pensions. They really have no choice.



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