(The Center Square) – As cities across the state see less revenue in the aftermath of the months-long COVID-19 shutdown orders, some are looking at pushing local pension payments out by a decade to get some “breathing room.”
Illinois Municipal League Executive Director Brad Cole said they’ll be opposing any additional unfunded mandates. One mandate he said they want to be changed is moving the pension ramp out 10 years to 2050.
“There’s no way they’re going to be able to make those heightened payments, so we need a little bit of breathing room and we’ve asked the general assembly to provide that through a re-amortization of the public safety pension funds,” Cole said. “We hope that is something they’ll consider during the veto session”
Veto session isn’t until after the November election.
In Springfield, Alderman Joe McMenamin has been ringing the pension funding alarm since long before COVID-19. He said it may be too late.
“We’re in a very, almost desperate situation with our long term financing,” McMenamin told WMAY.
McMenamin said for Springfield, it might not be popular, but officials need to rework union contracts to address benefit costs, something he said pushing the pension ramp out ten years won’t solve.
“We’re in an absolute mess on pension financing,” he said. “It’s grown worse and worse. It’s almost like we’ve waited too long to properly fix the problem. We’ll kick the can down, kick the can again.”
Cole equated it to refinancing a house and said it’s necessary to pay what’s been promised.
“We can either kick the can down the road and make the payments or stop kicking the can, declare bankruptcy and start defaulting on the obligations that are due to the pension recipients,” Cole said. “We’re not kicking the can down the road. We’re refinancing so we can continue to make payments.”
Illinois recently consolidated hundreds of downstate police and fire pension funds, but that largely saved on administrative costs, not the legacy costs of promised benefits.
Across the state, there’s more than $12 billion in unfunded pension liabilities of local police and fire pension funds combined.
