"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27, 2010


Thursday, October 15, 2009

Government to Government: STOP

There is a village about 30 miles northwest of Chicago that is communicating a warning and call to action about the problem with public employee pensions in Illinois. This village in this state is one of thousands of local communities across the country (view the links in the left margin entitled “Feeding at the Public Trough”) facing unheard of costs for pensions that have been manipulated through state legislatures at the behest of special interest unions with the complicity of weak and corrupt politicians. This is a very important message and we encourage you to read it in its entirety.   Here is the text of that call to action:

Q: What pensions are available to public employees?

As required by state law, municipal employees (police,
fire and non-public safety personnel) are covered by three
separate pension programs.

Police and firefighters are covered by local pension funds.
Decisions for these pension funds are made by a board
consisting of two active employees, one annuitant and
only two representatives of the municipality. Police and
firefighters receive a full pension (75% of their final pay)
after age 50 with 30 years of service and may receive a
50% pension at age 50 with 20 years of service. Police and
firefighters also are entitled to numerous other benefits.
All other eligible municipal employees are covered by
the Illinois Municipal Retirement Fund (IMRF), which is
a statewide program that consolidates multiple municipal
employers into a single fund. It is governed by a board
consisting of three current employees, one annuitant and
four representatives of employer local governments. IMRF
employees receive a full (75%) pension at age 60 after 40
years of service and may receive a 50% pension at age 55
with 31 years of service.

Q: Who determines the benefits and contributions for
pension programs?

By law, our Village is mandated to fund the pension benefits
of police, firefighters and other municipal employees. The
General Assembly determines the benefits and employee
contributions for pension programs, not your local elected
officials.

The Crisis:

The unprecedented economic downturn has impacted our
residents, businesses and municipal revenues. Despite the
fact that the Village of Barrington has made its actuarially
required pension contributions (and more) over the years,
losses in retirement fund values and escalating costs due
to pension sweeteners authorized by the Illinois General
Assembly have taken a toll on the funding of public
employee pensions. This funding comes from three
sources – employee contributions, employer contributions,
and investment returns. Since employee contributions are
capped by the General Assembly, the fiscal burden falls
upon the Village contributions (local taxpayers) to keep
these funds financially solvent. By law, Barrington is
mandated to fund the pension benefits of police, firefighters
and other municipal employees.

Unless the Illinois General Assembly takes action on October
14-16 and 28-30, a massive spike in police and fire pension
costs will have a significant impact on our Village’s budget in
2010. Funding these increased pension costs will contribute
to major cuts in other areas of our budget affecting Village
services and possibly more staff.

Recognizing the financial impact on taxpayers, the Illinois
Municipal Retirement Fund (IMRF) board took steps
to mitigate its investment loss and offered an option to
municipalities to cap their fund contribution for municipal
(except police and fire) employees to a 10% increase per
year. However, a similar cap on contributions to police
and firefighter funds will require legislative action by the
Illinois General Assembly. While a cap is only a stop gap
measure, it would help ease the immediate budget crisis for
municipalities.

Our community, through the Northwest Municipal
Conference (NWMC), sought such a legislative remedy this
year. Working with Senators Susan Garrett and Pam Althoff,
NWMC succeeded in getting Senate Bill 2011 approved by
the Illinois Senate. Opposition from the state police and
firefighter unions stalled Senate Bill 2011’s advancement in
the Illinois House.

Members of the General Assembly have one more opportunity
to provide relief from this substantial spike in public safety
pension costs during their fall veto session on October 14-16
and 28-30. Waiting until next year for legislative action will
be too late.

While the state Representatives and Senators representing
Barrington have been very helpful to our Village on this
issue, it is important for more of their colleagues to do the
same. To minimize the impact on current Village services
caused by escalating pension costs, please contact your State
Senators and Representatives, thank them for their past
support, and urge them to continue to support Senate Bill
2011 and ask them to encourage their colleagues to support
it, as well.

For a list of the Village’s State Senators and Representatives
and for additional information, please visit the Village’s
website at  http://www.barrington-il.gov/.

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