Illinois cities looking for pension relief, restoration of income tax share

[February 24, 2023]  By Andrew Hensel | The Center Square

(The Center Square) – Illinois cities are looking for state lawmakers to address local public safety pension costs and for the state to return their share of income tax revenue, among other proposals.

The Illinois General Assembly is in session through mid-May. The Illinois Municipal League released its "Moving Cities Forward" legislative agenda Thursday. The plan examines problems and offers solutions for the General Assembly to approve to "ensure that municipal budgets are balanced, and critical services are provided."

The plan aims to restore to cities the full 10% of funding through the Local Government Distributive Fund, which comes from state income taxes imposed on individuals and businesses across Illinois. As of 2022, the payback to local governments was just 6.16%.

State Sen. Don DeWitte R-St. Charles, said the extra funds could be vital for local municipalities.

“Several years back, an agreement was made that local governments would have 10% of the collected LGDF money returned to them, but in recent years the state of Illinois has been shortchanging communities and sending them lesser amounts," DeWitte said. "When the Governor sweeps those funds, he places an additional financial strain on local communities, and the ultimate burden falls on property taxpayers.”

IML Executive Director Brad Cole said restoring the full LGDF will go a long way to help alleviate burdens on taxpayer-funded municipal budgets.

From left to right: Illinois Municipal League First Vice President and Fairview Heights Mayor Mark Kupsky, IML President and River Forest Village President Catherine Adduci and IML Executive Director Brad Cole during a news conference in Springfield Thursday. - Greg Bishop / The Center Square

"If you want real pension reform, if you want real property tax reform, fund LGDF," Cole said.

IML President Catherine Adduci, village president of River Forest, offered insight into their pension reform plan.

"Another critical issue is to further reform the downstate public safety pension funds," Adduci said. "Specifically, by extending the scheduled date these pensions must be funded."

Adduci advocates for extending the downstate public safety pension system ramp to fund pensions by at least 90% from 2040 to at least 2050 to lessen the financial burden on taxpayers.

"This would provide immediate relief to our communities and taxpayers who continue to face skyrocketing pension payments," Adduci said.

According to Illinois Department of Insurance data, nearly $14 billion in unfunded liability was owed to local downstate public safety pension plans through 2020.

Andrew Hensel reports on issues in Chicago and Statewide. He has been with The Center Square News since April of 2021 and was previously with The Joliet Slammers.