Controlling Local Government Costs

Pension Reamortization

 
Extending the amortization deadline beyond the artificial target of 2040 will curb the accelerated annual rate of growth in taxpayer contributions and reduce the exaggerated fiscal pressures impacting municipal budgets, while still protecting secure retirements for our first responders.
 
By passing legislation to consolidate the investment functions of local pension funds, lawmakers have set these pension systems on a path to increase investment returns and limit the long-term property tax burden all while not encroaching on constitutional protections. Unfortunately, communities have not yet begun to reap the benefits of consolidating public safety pension funds. Yet, Tier 2 enhancements in the consolidation legislation have immediately added to the taxpayer burden.
 
Lawmakers should work with local governments to restructure the arbitrary pension funding deadline in current legislation. Under the Illinois Pension Code, current local pension funds must make contributions to target a 90 percent funded ratio by 2040. The Conference does not support reamortization lightly as we have regularly opposed legislation that “kicks the can down the road” without addressing the health of the pension system. However, the pandemic has placed a new and unexpected toll on local government budgets. Combined with the Tier 2 enhancements, the already shaky pension system will only put more pressure on taxpayers. Based on the most recent data, NWMC communities have a combined 58 percent funded ratio with nearly $2.4 billion in unfunded liabilities in their public safety pension systems.  With that fiscal reality and amidst the ongoing pandemic, short-term taxpayer relief is necessary.
 

Unfunded Mandates

 
Local governments drained by ongoing COVID 19 costs and revenue losses cannot absorb any new unfunded mandates. State lawmakers should pursue opportunities to lower burdens on local governments by lowering prevailing wage thresholds, reducing the need for costly Freedom of Information Act (FOIA) litigation, and eliminating outdated and costly publishing requirements for legal notices. Any new requirements, must include the necessary funding for implementation.