Madison - St. Clair Record

Sunday, August 25, 2019

Cash-strapped Illinois counties chase down unpaid tickets from 1980s

Their View

By Ben Szalinski, Illinois Policy Institute | Aug 7, 2019


Melanie Little, of Florida, answered a call about a traffic ticket she received in 1983 from Jefferson County, Illinois. The problem: Melanie was only 14 in 1983; she didn’t drive yet.

“I was left thinking, damn the state of Illinois is so broke… they’re having to track down people from the ’80s to pay traffic tickets,” Little said in an interview with the Chicago Tribune.

Counties across Illinois have hired independent collection agencies to go after old, unpaid tickets in hopes of bringing in extra revenue, according to the Tribune. The collection agencies are tracking down both Illinois residents and those who moved out of the state years ago for outstanding tickets, some of which go back more than three decades.

Many of those contacted by the collection agencies believe they’ve been targeted by mistake, according to the Tribune.

Smaller Illinois counties have found outsourcing debt collections to be an effective cost-saving measure that gains them revenue. That deal comes at the expense of those chased down for ticket debt: Counties can add a 30% fee onto tickets in order to pay the collection agency for their service.

John Pelissero, a professor of political science at Loyola University Chicago, told the Chicago Tribune that outsourcing for debt services is a growing trend among local governments. “Many smaller cities and counties have responded to the decline in intergovernmental aid from (federal and state governments) by looking to increase their own-source revenues, while limiting general tax increases,” he said.

Pension pain

Another reason cities and counties are desperate for revenue? Pension costs.

Across Illinois, local governments have been forced to raise property taxes and cut services to keep up with rising pension demands.

Springfield-area residents pay some of the nation’s highest property taxes, with many of their tax dollars going toward pensions. Ninety-five cents of every dollar taxed in Sangamon County for local police go to pensions, and every dollar taxed for fire services goes to pensions. Local public safety services across St. Clair County face a similar problem. Cities such as Peoria have suffered police and fire department layoffs as the cost of pensions crowds out the city’s ability to provide reliable services.

The Illinois Municipal Retirement Fund, or IMRF, was 90% funded as of the end of 2018. That’s a higher ratio than any of the five state-run pension funds, largely because cities are mandated – through a court-enforced funding guarantee – to fund IMRF pensions before everything else, even if that means cutting budgets for road repair, libraries and police and firefighter pensions.

But IMRF still suffers from the fundamental problems that plague all pension plans: The fund’s pension obligations grew at the pace of 7.2% per year between 2000 and 2014, far outpacing inflation ¬– and taxpayers’ ability to pay. Local taxpayers were also contributing more than the city employees, yet IMRF was still underfunded by billions of dollars.

Cities such as Springfield, Harvey and Oak Lawn have been forced to redirect nearly all property tax revenue raised for public safety to pensions instead – and still hike property taxes. This leaves little room for services that actually benefit taxpayers.

Illinois’ dire financial situation, fueled in part by out-of-control pension growth, has caused counties to turn to unconventional practices with the hope of finding new revenue sources to fund services residents expect. To protect the retirement systems and stop them from forcing more painful cuts into current services, Illinois lawmakers need to pursue constitutional pension reform that protects earned benefits while controlling the growth rate of future, unearned benefits.

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