Elk Grove mayor says pension liabilities hurting towns

Elk Grove Village Mayor Craig Johnson says pension liabilities are hurting towns that already are cutting costs to avoid raising taxes.

Johnson said for the fifth year in a row, there is no increase proposed for the village’s portion of the property tax levy. In fact, the $10.6 million in general fund revenues from the 2011 levy represents a $5,000 decrease.

Meanwhile, the levy for police and fire pensions — $16.7 million for 2011 — is going up by 5 percent, or about $300,000, he added.

“It’s frustrating,” Johnson said. “Five years we’ve held the line on our general tax levy, and the pension levy keeps going up. Forty cents of every dollar we collect goes to pensions. It’s unsustainable.”

Johnson said in the 15 years he has been on the village board, village police and fire pension contributions have gone up from 14 percent to nearly 40 percent.

In 2000, the village’s police and fire pensions were 104 percent funded. But with changes in state requirements, lowering of the retirement age and new liabilities, village police and fire pensions are now only roughly 60 percent funded, which is better than some other communities but still puts a strain on village finances, Johnson said.

“The state keeps changing the benefits and every time they change it, our funding goes down,” he said.

Johnson argues that while the state should honor the pensions promised to those currently in the system, all new public sector employees should be enrolled in 401K retirement plans similar to what private sector workers have.

“The state needs to wake up and fix this thing,” he said. “Any new people coming on, they’ve got to do a new system.”