Excerpts from peoriapublicradio.org:
Facing escalating obligations to police and fire pensions, Peoria city leaders want residents to give direction on a course of action. The city council spent close to 90 minutes during Tuesday’s meeting discussing a plan to place an advisory referendum on the February ballot to gauge interest in implementing Police Protection and Fire Protection taxes.
“By 2023, one out of every nine dollars that you collect in the general fund will be going to cover public safety pension costs – over and above the property tax levies we’re currently showing,” said City Manager Patrick Urich, showing a general fund transfer requirement growing from $4 million this year to $10.6 million. “This is what’s driving us to cut services. This is the structural imbalance that we’re facing.”
Illinois law requires pensions to be 90% funded by 2040 and Peoria currently has $340 million in unfunded obligations. The amount of property tax revenue going toward the city’s general fund for operations has steadily decreased all the way down to nothing.
“There are no property tax dollars that you’re levying that are supporting the general fund operations for public safety, for public works, for community development, or for city hall – zero,” said Urich. He also noted that nearly 85% of the tax levy is covering pension costs.
Adopting two protection taxes of 7.5 cents per $100 in assessed value would generate about $1.2 million apiece. The council has the authority to implement taxes at that rate without a referendum, but the rates could be increased up to 0.6% with a referendum.
The city had a balanced budget before the pandemic struck. While the council members seemed to favor asking residents to vote on what to do, most indicated they are opposed to higher taxes. The council unanimously voted to bring the referendum proposal back for additional discussion in 30 days.
There was a suggestion of the possibly doubling the $10 million in short-term borrowing the council approved last week in an attempt to save the two fire department engines that would be cut, but the borrowing would need a repayment source, and anything more than an extra $10 million would likely require a property tax increase.
The council decided to revisit the possibility at the next meeting.
#1 by Austin on September 10, 2020 - 8:55 AM
When a town or city relies on 1 or 2 companies for the bulk of their revenue, its going to end badly one day. CAT left, now they are screwed because they didn’t have a backup plan. I am amazed Hoffman Estates is doing as well as they are since of the 3 major HQ they have (had) are not in great shape. The old Ameritech HQ (later AT&T major office) closed, Claire’s is barely hanging on, and we all know about Sears. They do have a lot of office buildings, but who knows what the future is for that market. My point is a town/city needs to plan a head so you don’t have such sever cuts like Peoria or Decatur who relied on one major company.
I 100% agree with Mike, why were they not funding the pensions to begin with? These major shortfalls are almost always because the council keeps kicking the can down the road, and now they can’t anymore.
#2 by Localguy on September 9, 2020 - 10:28 PM
More corrupt politics.
#3 by Mike on September 9, 2020 - 8:36 PM
How long historically has the city been underfunding pensions? Also when they keep giving tax breaks to companies that then in turn leave or abuse those tax breaks and force the citizens to be the ones who clean up the mess. It sounds like the city really needs to look at priorities and stop doing stupid shit with other people’s money.