The Gem City joins a growing list of Illinois municipalities raising property taxes to pay for pensions.
Homeowners in the Adams County city of Quincy will see higher property tax bills in 2019, for reasons all too familiar to a growing number of Illinoisans: the rising cost of pension obligations.
Quincy aldermen voted Dec. 17 to raise the city’s property tax levy by 5.25 percent to pay for police and fire pensions, according to WGEM-TV.
The city was originally looking at a 13.8 percent property tax increase for 2019, but managed to soften that increase by including a transfer of $600,000 in unbudgeted surplus revenue into its public safety pension funds.
An earlier proposal introduced by Alderman Mike Farha would have avoided a property tax hike, and instead cut expenses to make room for rising pension obligations. But the City Council rejected that measure.
An owner of a $100,000 home – slightly less than Quincy’s median home value – will pay an estimated $15more on next year’s property tax bills.
Quincy’s public safety pensions account for over 62 percent of the city’s total projected property tax levy. As of 2016, Quincy had only 53 and 43 cents for every dollar needed to fund its police and fire pensions, respectively, according to a 2017 report from the Illinois Department of Insurance.
“The fact of the matter is, our [pension] obligations as a city increase every year and we have to identify ways to keep up with those obligations,”Alderman Jeff VanCamp told WGEM-TV. A state law that went into effect in January requires municipal pension funds to be 90 percent funded by 2040, placing increased pressure on local budgets.
Between fiscal years 2008 and 2018, the city’s contributions to its public safety pensions grew to $3.9 million from less than $1.8 million – or by nearly 120 percent. The city estimates it will contribute over $4.2 million to police and fire pensions in fiscal year 2019.
Quincy is another example of an increasingly common pattern in Illinois: hiking property taxes to pay for pensions. For example, Norridge recently hiked its property tax levy by more than 35 percent to pay for police pensions. Likewise, Highland Park approved its second consecutive property tax increase to fund its public safety pensions. Smaller municipalities such as Carterville and Geneseo hiked their property taxes by 30 and 10 percent, respectively, to pay for public safety pensions. Peoria, Rockford and Chicago are each grappling with worsening pension crises.
Defined-benefit pensions are imperiling government workers’ retirement security and jeopardizing today’s public services to pay yesterday’s pensioners, all while leaving taxpayers on the hook for ballooning costs.
Lawmakers in Springfield must move to protect the retirement security of government workers and taxpayers’ interests. They should capitalize on recent momentum and support an amendment to the Illinois Constitution to allow for changes to the growth of future, not-yet-earned pension benefits while protecting benefits already earned.