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 Lake in the Hills is the latest municipality in Illinois to
confront growing pension costs, which could mean higher property tax bills for
some village residents.
On July 25, the Lake in the Hills Village Board approved a $1.5 million request
from the village’s police pension fund for the 2019 levy year, according to the
Northwest Herald, amounting to a 9.17% increase from the previous year.
The request for the increase was driven largely by the fund’s
lower-than-expected investment returns in fiscal year 2018, according to the
Herald.
Last year’s levy request was $1.37 million, up only 0.14% from fiscal year 2017.
An independent actuary contracted by both the village and police pension boards
determined this year’s levy amount.
A higher police pension levy could affect property taxes in the village. Since
the police pension fund itself doesn’t levy a property tax, increased spending
on police pensions may require an increase in the village’s property tax levy,
which could translate to higher property tax bills for some homeowners.
The village’s police pension board came under fire from taxpayers in 2018 when
former Deputy Police Chief Alan Bokowski was allowed to keep his $84,000 annual
pension, despite being sentenced to more than four years in prison for sexually
assaulting a minor.
Lake in the Hills is not the only community seeing a growing share of public
resources captured by pensions. Cities such as Harvey, Rockford and Norridge
have all been forced to either hike property taxes or make painful budget cuts
– or both – to accommodate rising pension demands.
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Fortunately, Lake in the Hills has not reached that
point yet. But other Illinois communities have seen firsthand where
a pension problem can lead, if left unaddressed.
Pension pressure
Illinois state and local governments spend more on pensions as a
percentage of revenue than any other state – and nearly double the
national average. Under state law, Illinois pension funds must
achieve 90% funding by 2045.
In 2018, a $6 million budget shortfall driven by pensions forced
Peoria to cut local police and fire department jobs, despite the
fact that 85% of the city’s property tax revenues had already been
going directly to pensions.
North suburban Highland Park raised its property tax levy by nearly
$1 million in December to pay for pensions.
Lawmakers in Springfield must take action to address the pension
crisis. By amending the state constitution to protect earned
benefits, but allow for changes in future benefit accruals, state
lawmakers could pass a pension reform package that reduces annual
pension contributions and fully funds the pension systems faster
than planned under current law. This plan would enable state and
local governments to honor promises made to both retirees and
current workers – and protect taxpayers from future tax hikes.
While Lake in the Hills does not face a crisis as severe as that of
other communities, the latest levy increase should alert local
taxpayers and government workers to the risks posed by an
unaffordable pension system.
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