Pension increases impact property taxes

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May 16, 2009

BY JENNIFER BAILEY The Commercial-News Sat May 16, 2009, 08:35 PM CDT

DANVILLE — There have been several potential pension increases in front of legislators recently.

Personnel costs already are a major portion of the city’s budget.

Rising costs in the fire and police pension funds and Illinois Municipal Retirement Fund make it harder to keep city taxes down.

“Property taxes pay for the pension costs,” Mayor Scott Eisenhauer said. “When we talk about increases to pension costs, it’s a direct impact to what the citizen pays.”

This adds to the taxpayers’ burden, many of whom don’t have pensions.

Eisenhauer has said of the estimated $1.92 property tax rate, if the city eliminated the unfunded liability portion from the police and fire pensions not being paid in past years, the rate would be $1.21.

The fire pension currently is 35 percent funded, while the police pension is 40 percent funded.

The city’s 2008 tax levy shows $1.38 million in property taxes going to the police pension and $1.81 million to the fire pension fund, about 12 and 8 percent increases from last year, respectively.

“My opinion has been that there should be no increase to pension benefits,” Eisenhauer said.

Any small change, such as with the older retired firefighters, can open the door to more increases, he said.

“It’s an impact,” Eisenhauer said of any pension fund change, and the costs usually rising faster than the annual equalized assessed valuation for properties.

But state Rep. Bill Black, R-Danville, adds that the older retired firefighters “who labored in a different era (without air masks and packs and who took tremendous risks), are not being treated fairly.”

“I don’t want to slap the Danville police and fire board in the face,” he added. “Hank (Shouse’s) pension is probably less a month than a mayor of a good-sized city makes in a week. We’re not trying to wipe out the city’s pension...”

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