“We’ve really turned the corner,” boasts Alton Mayor Brant Walker, citing examples of increased economic activity in his community.
But, like other municipalities throughout Illinois, the city is saddled with huge pension debt. Unlike many of those other localities, however, Alton has found a way to get out from under much of that debt: by selling city assets.
Last month, the Alton City Council accepted American Water's $54 million dollar bid for its municipal water treatment plant. That big chunk of change will cover nearly half of the $113 million that the city owes in unfunded pension liabilities.
“I know the state of Illinois says you can’t go bankrupt, but if you don’t have any money, what do you call it?” Walker asks. “If we did not have the influx, almost $54 million, Alton would no doubt be Harvey.”
With no outsized assets to sell, Harvey had to lay off dozens of public safety workers when local pension stewards forced Comptroller Susana Mendoza’s office to withhold more than $1.4 million in state tax distributions the city was owed.
“There will be a lot of Harveys coming down the pike very soon due to pension funding shortfalls,” Walker predicts. “Kankakee’s in trouble. Harvey’s in trouble. The list goes on and on.”
That's the thing about budgets. A young person may think he can keep writing checks as long as he has checks to write. An adult knows that there must be money in an account to cover those checks and that he has to stop writing them when the money runs out.
Speaking of money running out, who's responsible for the budgets of Harvey and other Illinois municipalities now on the verge of bankruptcy? Why do so many of them owe millions of dollars in unpaid pension bills? Did they not realize that the terms they once agreed to were insupportable in the long run? Why did they agree to them? Why have they waited so long to address the problem? Are they adults or children?
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