Pensions laws cost Arlington Heights more than $2 million

SPRINGFIELD - A trio of pension laws approved by state lawmakers to enhance local police and firefighter benefits cost Arlington Heights taxpayers more than $2.4 million over the past five years, according to a state report.

The laws made it possible for police and firefighters to reach maximum pensions of 75 percent of their pay at 30 years rather than 35 years of service. They also provided for a surviving spouse to get the full pay if the person dies in the line of duty. Other provisions increased benefits for surviving children and those who leave employment because of job-related disability.

The Illinois Commission on Government Forecasting and Accountability examined the costs of those added benefits to select local governments, including Arlington Heights. The commission, an economic agency of the Illinois General Assembly, pegged the cost to the village alone at $2,418,070.

Local officials said this is exactly the kind of unfunded mandate from the state they've been fighting.

"The village of Arlington Heights greatly values the service of its police, fire and paramedic personnel," said Village Manager Bill Dixon. "What this issue is about from the standpoint of the municipalities is state mandates, where the state, through legislative action, sets standards and benchmarks when it comes to pension levels and the funding of pension levels and yet the impact falls on the municipalities and local taxpayers to fulfill those mandates."

That, in turn, squeezes local property taxes and forces money that could go elsewhere in the budget, to go to the pension funds, Dixon said.

The other communities studied were Bellwood, Champaign, Springfield and Wilmette. Of them, Springfield was hardest hit with more than $5 million in added costs associated with the pension enhancements. These communities were chosen because the commission's consulting actuary for the study also is the actuary for these specific police and fire pension funds and the state could be ensured access to the necessary data.

While the state sets pension parameters for local police and fire employees, it does not pay for the pensions. That responsibility falls on local taxpayers. Mayors, village managers and other local government officials throughout the state have been increasingly critical of the state enacting politically popular pension sweeteners without any funding.

In 2008, lawmakers approved a proposal that required the effect of such police and fire pension enhancements to be examined before legislation is approved. State Rep. Mark Beaubien, a Barrington Hills Republican, sponsored that proposal.

"It makes us a little more responsible," Beaubien said.

The political reality, he said, has been that lawmakers don't know the specific financial impact of such pension improvements and at the same time aren't likely to vote against police and firefighters for fear of the political fallout.