Posted on 12/26/2010 3:30:36 PM PST by DeaconBenjamin
DECATUR - As the Decatur City Council prepares to convene Monday to discuss setting its portion of the local property tax levy, the largest burden on those revenues - funding the pensions of police, firefighters and city employees - remains a persistent and growing challenge.
City Manager Ryan McCrady and Finance Director Ron Neufeld highlighted some telling statistics in the city's attempts to maintain its pension funds over the last decade.
"We've been putting in what we're required to put in, but the unfunded liability keeps growing," McCrady said.
The council will discuss how it will meet the obligations before it. Council members have clearly expressed a desire to move forward without raising the levy.
In 2001, about 30 percent of the city's property tax levy went into paying down the pensions of its retired police and firefighters. In 2011, 70 percent of it will go toward pensions, even as recent years have seen cuts to other services that draw their funds from the same source, including the Decatur Public Library.
This year the library eliminated the Bookmobiles in the face of cuts exacted upon it by the city council.
Despite such austerity, costs continue to rise due to increasing unfunded liability, caused by higher-than-expected costs that must be paid off at a mandated minimum rate. According to city data, Decatur faced about $10 million in unfunded liabilities to its police and fire pension systems. In fiscal year 2011, the city's unfunded liabilities for police and fire pensions are expected to total about $80 million.
The state legislature sets all of the rules for pension contributions, and over the years it has mandated that municipalities make ever increasing payments. The result, McCrady said, has been a higher and higher cost for the city.
Recent pension reforms that passed the General Assembly and await the Gov. Pat Quinn's signature could provide long-term relief, McCrady said, but in the short term, city staff and the council have to figure out how to meet their obligations in a fiscal climate that leaves little breathing room.
"It's to the point now where taxpayers can't sustain a property tax levy to the point where we can fund these out of the property taxes," McCrady said. "We're starting to draw from other operations to pay for these obligations."
In recent years, the city council has taken money out of funds intended to commemorate the bicentennial of Abraham Lincoln and the city's construction fund, as well as the general fund, to pay for pensions.
Adam Ruderman, president of the Decatur Fire Department's employee union, said he hopes municipalities will be held accountable to making more than just minimum payments to police and fire pensions. Despite some perceptions that such pensions are "extravagant," Ruderman said after health insurance costs, many firefighters are left with about $2,500 a month for the rest of their lives.
Ruderman said solutions won't be easy or quick.
"It would be extremely biased for me to say, 'They should raise the tax levy by 15 percent,' because you can't fix it overnight," Ruderman said. "I would not advocate that. I think some people we expected to be responsible decision-makers have made very poor decisions."
Despite the difficulties, Neufeld pointed out the money in the pension funds themselves has steadily grown and isn't in danger of running out. Continually making ever-increasing payments, however, is causing the burden to overshadow other essential city services, McCrady said.
McCrady said employees rightfully deserve their hard-won pensions and also have been making larger and larger contributions to their plans at the same time the city has, but the solution might be something local government can't handle.
"Governments can't sustain pension programs," McCrady said. "Private industry has gotten out of the pension business, and the best long-term solution is for government to get out of the pension business."
There will be a war over this.
It's brewing nationally.
Nobody is doing ANYTHING to cut pensions to make them affordable are reasonable.
All that is being contemplated is taking more money from the producers to pay for the overruns.
Yes, it will come to a head eventually.
McGrady is right: Government should get out of the pension business.
Does this boob expect to elicit sympathy with this? I'll bet many of these guys are retiring in their late 40's and early 50's and just going on to other work.
On top of that, the key word in that sentence is "many"....that's French for "some". They probably have guys sucking twice that out of the public trough annually. Sickening.
“We’ve been putting in what we’re required to put in, but the unfunded liability keeps growing,”
“I’ve been making the minimum payments every month but how much they say I owe keeps going up.”
raise the property tax but make it a requirement that all retired govt employees live in that district...let them live the mess they created...they and their evil union minions and the enabling govt managers..
Cops’ and firefighters’ pensions sucking property tax payers dry.
And they want respect?
Sink ‘em.
"only" $2500 a month...."only"....
funding the pensions of police, firefighters and city employees
Not currently possible legally, but a good idea regardless.
I noticed that, too. In that context, “Many” means the bottom tier.
I could retire on $2500 a month.
“Ruderman said after health insurance costs, many firefighters are left with about $2,500 a month for the rest of their lives.
Does this boob expect to elicit sympathy with this? I’ll bet many of these guys are retiring in their late 40’s and early 50’s and just going on to other work.”
Exactly, double and triple dippers.
"I can't be overdrawn. I still have some checks left."
Why should the taxpayers pay these people’s pensions?
raise the property tax but make it a requirement that all retired govt employees live in that district...let them live the mess they created...they and their evil union minions and the enabling govt managers..
Tell the unions to pound sand.
You are correct. The challenge of the new Tea Party House will be to cut off any further bailouts. The first fight is to defeat the RINO’s who will want to cut a deal with the democrats to keep on deficit spending. The sooner that we can defeat the RINO’s the sooner we go to war with the democrats and cut the spending off. This is an extremely difficult challenge and the Tea Partiers need all the help we can give them.
This will lead to the big fight where the responsible states will be able to fend for themselves and the parasitic states like IL, NY and especially CA will melt down. After the meltdown we save what is worth saving. This will be very rough but the only chance we have to save the future for our children.
Probably. Here in Northern California, our firefighters are taking home $250,000 in direct compensation on a base pay of about $100,000. The difference is overtime, and it’s a union game. Fire districts are faced with very high health and welfare benefits and the future untenable bite of pensions ( which now, by law start at 50 years of age irrespective of the length of service), so they are running something on the order of 15% understaffing to blunt these costs. The result is massive overtime expense. And now the latest wrinkle is that firefighters from a surrounding district become residents of ours and they now run for Fire Board positions with back door union financing. Now three our five-member fire board are union fire fighters. So now the fix is really in. County-wide those in the workforce making over $100,000 has grown from about 1400 to more than 1800 in just one year. Nearly all that growth is from firefighters. The only people making more than the firefighters are the doctors at the county hospital.
Any corporate chieftain who said such a thing would soon be out on his ass.
Audit all governments including the us government and the federal reserve.
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