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SOUTHWEST
ILLINOIS COUNTY FACES PROPERTY TAX HIKE, LAYOFFS AMID RISING PENSION
COSTS
Illinois Policy Institute/
Brad Weisenstein
Perry County is home to the DuQuoin State
Fair, but the prize hog is a pension system eating money needed for
public safety and other core services. County employees face layoffs.
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 A small county in southwest Illinois is facing big pension
obligations and the possibility that it won’t make payroll in late May.
Perry County faces a $1 million shortfall that is threatening its employees’
second payday in May. County leaders May 13 will consider recommendations to
hike property taxes and fees, to curb spending, to lay off employees and to
shorten their workweek.
“We basically need $1 million in the month of May just to meet payroll and to
pay what bills we have left,” Perry County Treasurer Mary Jane Craft told WPSD-TV.
“If we just meet payroll and not our bills, we still need $400,000.”
How did the county fall into crisis? Shrinking revenue and growing pension
demands appear to be at the heart of the crisis.
General fund revenue to operate the county was just less than $6.6 million
during the 2012-2013 budget year. The 2017-2018 revenue was $1.5 million less.
During that same period, the county’s pension obligations ballooned. Revenue
dedicated to pension payments jumped to $900,000 from $225,000 .
High labor costs are another issue, said County Clerk Beth Lipe. The county
hired a consultant whose recommendations include cutting employees to 30 hours
per week, layoffs, fee increases and severe spending cuts. She said a property
tax increase next year is inevitable.
“If we hold the line and make sure nobody crosses it on their budgets, then
maybe in one and a half to two years we’ll be out of financial problems,” Lipe
said. “I’ve lost a lot of sleep over it. I worry about everyone. The consultant
said labor is our most expensive item, and the only one you can adjust
immediately.”
County residents are resistant to the property tax solution the county board
will consider May 13.
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“I think they need to start laying people off, cut
back on the payroll. That’s what we all have to do. I don’t think
taxpayers should be responsible for that,” resident Kevin Kellerman
told WPSD-TV.
Perry County homeowners in 2017 averaged $1,556 in property taxes on
mortgaged houses with a median value of $86,200, according to U.S.
Census Bureau data. Property taxes in the county grew $301 per
person, adjusted for inflation, between 1996 and 2016.
County government is not alone in pensions sapping available
revenue. Of every $1 in property tax for municipal police service,
95 cents goes to pensions. The rate is 92 cents for fire services.
Lipe said county leaders for years have resisted increasing property
taxes because the schools, local hospital and other taxing bodies
have been raising them.
Unsustainable growth in pension costs have resulted in service cuts
and soaring property taxes across Illinois.
Illinoisans pay the second-highest property taxes in the nation. A
proposal by Gov. J.B. Pritzker to replace Illinois’ constitutionally
protected flat income tax with a progressive tax would do nothing to
address Illinoisans’ high property tax burden. In fact, property
taxes have soared by over 35 percent in the only state in 30 years
to switch its income tax system from flat to progressive.
Until Illinois adopts a constitutional amendment that protects
earned retirement benefits, but allows for reasonable adjustments to
the growth of future, unearned benefits, current public services
will remain in jeopardy and politicians will continue to call for
tax increases.
Illinois needs pension reform, not tax hikes.
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