|
 Nine firefighters have been asked to hand in their gear and
their fire station will temporarily close as East St. Louis, Illinois, faces a
$5.5 million budget deficit and interception of nearly $4 million in state
funding for debts owed to its police and fire pensions.
City Manager Brooke Smith notified the firefighters of the layoffs Oct. 15 in a
letter stating they would end work at the end of the month.
“Unfortunately, with 100% of the City’s state revenues being redirected to the
police and fire pensions, we are faced with the difficult task of strategically
reducing some services in order to continue to meet our financial obligations
for the next few months,” she wrote.
The city’s firefighters pension board on Sept. 17 notified Illinois Comptroller
Susana Mendoza requesting an interception of the city’s state funding until it
receives $2.2 million the city owes the fund. The city’s police pension board
made the same request on Sept. 27, seeking $1.79 million the city still owes.
The state funding has since halted and the city has 60 days after those dates to
appeal, Mendoza’s spokesman Abdon Pallasch said.
Besides the loss of state funding, Smith also cited the city’s budget deficit.
 “As you are aware the City of East St. Louis has been forced to make some
difficult financial decisions to meet its budgetary obligations. According to
the 2019 budget, there is a $5.5 million deficit and the city is now proposing
lay-offs in the Fire Department,” she wrote in the layoff notice.
The firefighters pension was only 9% funded at the end of 2018, with an unfunded
liability of $65.2 million, according to data from the Illinois Department of
Insurance. The police pension was healthier, but still had only 31% of its
needed funds and a total pension debt of $39 million.
Rob Schield retired from the city’s fire department last month. He said he’s
glad to be out but feeling bad for his former colleagues. He said there were
alternatives to cutting firefighters.
“No police or non-essential employees got cut at City Hall,” he said. “Thanks
for cutting more hard-working jobs and putting the citizens and the remaining
firefighters in even more danger.”
The firehouse to be shuttered at 1700 Central Ave. protects four of the city’s
public housing projects. He said only two firefighters were there one recent
evening, plus two at another station and three at the third.
He said the city once had nine stations and 120 firefighters. By Nov. 1 there
will be two firehouses and 28 firefighters, he said.
to top of second column] |
He had harsh words for the city government, citing
repeated federal prosecutions of corrupt city leaders and decades of
fiscal mismanagement leading to inadequate fire equipment and
manpower, plus failure to fund pensions. East St. Louis was given a
riverboat casino license to rescue it from bankruptcy in the 1990s,
along with decades of state financial oversight to control its
spending.
East St. Louis has seen decades of population loss and now has over
26,000 residents, with 43% of them living below the poverty line. It
has the highest murder rate of any U.S. city.
East St. Louis is the fourth Illinois city to face state funding
interception since pension systems were first allowed to seek that
remedy in 2018, Pallasch said. The others are Harvey, North Chicago
and Chicago.
Illinois has more than $11 billion in pension debt across more than
640 local police and firefighter pension funds outside of Chicago,
each with its own local board. Gov. J.B. Pritzker’s task force on
pension consolidation recently recommended merging their assets, but
not their administration and overhead. Full consolidation of assets
and administration could save $21 million a year.
Tally the shortfall for all local systems, including Chicago, and
taxpayers are liable for $63 billion in local government pension
debt.
Then there is the state pension debt. While the combined pension
debt for Illinois’ five statewide funds is officially estimated at
nearly $137 billion, Moody’s Investors Service just pegged the debt
at $241 billion, using less rosy estimates of future investment
returns. That means despite a healthy stock market, each Illinois
resident is on the hook for $18,896 in pension debt.
Since 2000, Illinois’ growth in state spending on pensions has led
the nation at 501%, while spending on core services that residents
value has dropped by one-third. Despite spending more than 25% of
the state budget on pensions, they remain only 40% funded — a mark
experts see as a point of no return from which the pensions cannot
recover without structural changes.
Springfield must make those changes by leading the state toward
constitutional pension reform that protects earned benefits while
allowing reasonable adjustments to the growth of future, unearned
benefits. Short of that, state leaders will keep generating creative
schemes to raise taxes, local property taxes will continue to grow
as cities cut services and lawyers will send out more letters trying
to force cities to pay what their pension funds are owed.
Click here to respond to the editor about this article
|
