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updated: 5/17/2012 11:17 AM

Madigan pension idea 'a stealth tax increase,' mayors say

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  • Jeffrey Braiman

      Jeffrey Braiman

  • Michael Madigan

      Michael Madigan

  • Tom Rooney

      Tom Rooney

 
 

SPRINGFIELD -- Suburban mayors are fighting back against a proposal by Illinois House Speaker Michael Madigan that would take tax money away from their towns and use it to pay for teachers' pensions.

"What it amounts to is a stealth property tax (increase)," said Wilmette Mayor Christopher Canning, president of the Northwest Municipal Conference.

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He and other mayors were reacting to Madigan's plan that could cost the suburbs millions of dollars by diverting a business tax collected for villages, townships, school districts and others and sending it to the state's retirement funds for teachers instead.

The move could "blow a real sizable chunk out of any budget our size," said Rolling Meadows Mayor Tom Rooney.

Madigan is among top Illinois Democrats who wanted to have local schools take over the state's share of payments for teachers' pensions, saying school boards set the salaries that establish pension amounts. When Republicans balked at that, Madigan proposed paying the state's share of pension contributions out of the corporate personal property replacement tax, which the state collects and distributes to local taxing bodies.

The mayors accused lawmakers of wanting to take local money to fix the state's budget problems.

"Obviously, they've looked at every available source and see a big bank of funds," said Buffalo Grove Mayor Jeffrey Braiman.

It's unclear, though, whether Madigan plans to move forward with his idea or if it's simply meant as a bargaining chip as lawmakers try to find a way to curb the state's escalating pension costs.

The proposal was scheduled for possible debate in front of a House committee Wednesday, but the debate never happened.

Several mayors compared their opposition to a similar battle last year, when they fought to keep the state from pulling back what's traditionally been their share of Illinois income taxes. That plan never came to be.

"I think you're always concerned at the end, when they're doing the budget," Hoffman Estates Mayor Bill McLeod said of state lawmakers, who face a May 31 deadline to pass an annual budget.

Lawmakers are looking to reduce pension costs that eat into what the state can spend on schools, help for the disabled and other programs.

Gov. Pat Quinn Wednesday released a new website called SaveOurState.Illinois.gov to try to highlight his plans to cut both pension costs and spending on health care for the poor -- the other big challenge facing lawmakers this month.

Quinn has proposed cuts to teachers' and state workers' retirement benefits, and he generally supports the state shifting some pension costs onto local schools. But he hasn't offered an opinion on Madigan's plan.

"We owe it to the next generation to rise to the occasion in the next 15 days and restore fiscal stability to Illinois," he said.

Despite the May 31 budget deadline, lawmakers have yet to debate major proposals concerning heath care and pensions.

The state is facing at least $9 billion in unpaid bills, and lawmakers almost certainly need to decide on health care cuts before finishing the rest of the budget.

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