Local communities seek pension relief from state

SPRINGFIELD - Local cities and villages are pressuring lawmakers to give them relief from mounting pension payments that threaten to swamp their local budget and force cuts or tax increases.

Investment losses have resulted in increased upcoming pension contributions that in many cases, local governments say they'll struggle to make. In Arlington Heights the increase is $1.6 million. In Rolling Meadows, Mayor Ken Nelson said the upcoming contribution is $1.8 million higher than the last payment and if nothing changes, would raise the city's portion of the property tax nearly 30 percent.

Similar figures and woes echo across the suburbs. These governments are under a 40-year plan approved in the 1990s to set them on the course for fully funded pension systems.

The state Senate had endorsed a plan that would readjust that funding schedule using 2009 as the starting point, a move akin to extending a mortgage in order to lower current payments.

But lawmakers said that plan has raised numerous concerns. Instead, lawmakers, the municipalities and affected unions are trying to broker a shorter, perhaps one-year deal that would reduce pension contributions even though it could add to long-term debt.

"I see no other available means," said Republican state Sen. Pam Althoff, former mayor of McHenry and among the plan's sponsors.

The threat to local budgets if nothing happens is that many are unable to unilaterally raise taxes under the law and would be forced to cut elsewhere to come up with the pension contribution. For those with taxing ability, the idea of hitting local residents with higher taxes in this economy isn't welcoming.

There's a sense of urgency to the issue because local governments must soon decide their issues and lawmakers' fall session is scheduled for only this week and the final week of October. They'll return in January, but by then, it'll be too late for the local communities.

Althoff and state Rep. Elaine Nekrtiz, a Northbrook Democrat also involved in the issue, said the goal is to get a temporary fix approved this fall and then take a comprehensive look at pension benefit funding next year.

Local mayors and village presidents have long criticized lawmakers for approving politically popular pension sweeteners for police and firefighters but not providing money to support them, sticking the local taxpayers with added costs.

On the other hand, the state's pension systems are in terrible financial shape because lawmakers and governors shorted pension payments year after year and chose to spend the money elsewhere in the budget. Making up those past payments will cost taxpayers tens of billions of dollars over the coming decades.

Daily Herald staff writer Debby Donovan contributed to this report.