Illinois Towns Drowning In Pension Debt From Hundreds Of Funds
From Bloomberg News
The pension-funding crisis undermining the stability of Illinois and Chicago is rippling through hundreds of smaller governments, squeezing budgets as officials prop up teetering police and fire retirement funds.
The eastern Illinois border city of Danville has reduced its firefighter ranks by 27 percent in five years to lower retirement costs. The tiny Chicago suburb of Stone Park sold $2 million in bonds last year to bolster the police pension, which had just six cents for every dollar owed retirees.
"Most communities in this state are in no position to continuously meet the pension requirements," said Tom Weisner, mayor of Aurora, the state's second-largest city, with a population of almost 200,000.
The squeeze comes from about 650 police and fire pension funds and is largely overlooked in the deepening Illinois and Chicago pension crises. The state is saddled with $111 billion in unfunded liabilities. Chicago and its public school system, with a combined shortfall of almost $30 billion, face the prospect of bankruptcy.
Half of local retirement systems are less than 60 percent funded, according to a May report from a commission created by the legislature to monitor Illinois's long-term debt position. Even those in better financial condition share a trait with weaker peers: mounting pressure from state-enacted benefit increases, resulting in higher taxes and service cuts to cover the costs of 11,000 retirees and 22,000 active public-safety employees.
Read more in our daily News Update...
From Bloomberg News
The pension-funding crisis undermining the stability of Illinois and Chicago is rippling through hundreds of smaller governments, squeezing budgets as officials prop up teetering police and fire retirement funds.
The eastern Illinois border city of Danville has reduced its firefighter ranks by 27 percent in five years to lower retirement costs. The tiny Chicago suburb of Stone Park sold $2 million in bonds last year to bolster the police pension, which had just six cents for every dollar owed retirees.
"Most communities in this state are in no position to continuously meet the pension requirements," said Tom Weisner, mayor of Aurora, the state's second-largest city, with a population of almost 200,000.
The squeeze comes from about 650 police and fire pension funds and is largely overlooked in the deepening Illinois and Chicago pension crises. The state is saddled with $111 billion in unfunded liabilities. Chicago and its public school system, with a combined shortfall of almost $30 billion, face the prospect of bankruptcy.
Half of local retirement systems are less than 60 percent funded, according to a May report from a commission created by the legislature to monitor Illinois's long-term debt position. Even those in better financial condition share a trait with weaker peers: mounting pressure from state-enacted benefit increases, resulting in higher taxes and service cuts to cover the costs of 11,000 retirees and 22,000 active public-safety employees.
Read more in our daily News Update...