FILE - Macomb, Ill. City Hall
City Hall of Macomb, Ill. (J.R. Vazquez | Wikimedia via Creative Commons)
Cities are feeling the budget strains from growing pension bills in the months before budgets are due.
Many Illinois municipalities have budgets due in April. A growing number of them are faced with shortfalls due to growing pension contributions. The public retirement plans require more local funding as employees retire and live longer.
Officials in Quincy are facing a $1 million budget shortfall. Mayor Kyle Moore said the city will have to either cut services or raise taxes.
“With our current revenue portfolio, the amount that we’re expected to bring in is not sufficient to provide the city services we do today,” he told a crowd gathered at last week's City Council meeting. “If the council wishes us to not raise any additional revenues, then we know that we’re gonna have a lot of cutting to do.”
Similar conversations are playing out across Illinois, said Ted Dabrowski, president of financial watchdog Wirepoints.
“Cities from Danville to Rockford to Springfield to Macomb and Quincy are all being pressured,” he said. “That whole definition of a Ponzi scheme falling apart is happening as we speak.”
Macomb officials are using the city's rainy-day fund to cover mounting pension payments.
City administrator Dean Torreson said police and fire pensions have put a $430,000 hole in Macomb's budget. Raising taxes could fill the gap, but Torreson said residents are “tapped out.”
“Other than that, our only other option is to lay people off and reduce the workforce over time,” he said.
Torreson said it’s hypocritical for the state to demand higher annual pension payments from municipalities given Illinois' worst-in-the-nation pension problems.
“It’s the state telling us, ‘do as we say, not as we do,’ ” he said.
Pension benefits are a state-decided but locally-funded mandate, protected from diminishment by the Illinois Constitution.