Rising costs for Illinois’ 650 local pension funds are wreaking havoc on city budgets, taxpayer wallets and the retirement security of hundreds of thousands of police, firefighter and municipal workers and retirees, according to the independent, non-profit economic research group Wirepoints.
The Illinois-based group focuses largely on state and local pension research and last week awarded “F” grades to 102 of the state's 175 biggest cities.
Wirepoints’ study included 10 metrics, such as police, firefighter and municipal pension fund ratios and pension debt per household. Results from 2019 and 2003 were compared.
In Madison County, Alton and East Alton got F grades; Wood River got a D and Edwardsville got a C.
Key findings in Alton, which also received an F in 2003:
• The city’s total score dropped from 53 in 2003 to 31 in 2019, a decline of 22 points.
• In 2019, city taxpayers contributed 6.2 times more to pensions compared to 2003, and yet city pension debts today are 2.4 times larger.
• The city’s combined pension funded ratio fell 15% percentage points between 2003 and 2019.
• Pension costs are crowding out core government services. City pension contributions as a share of general fund budgets have grown to 26.5% percent in 2019 from 6.6% percent in 2003.
Key findings in East Alton, which received a D in 2003:
• The city’s total score dropped from 60 in 2003 to 31 in 2019, a decline of 29 points.
• In 2019, city taxpayers contributed 3.6 times more to pensions compared to 2003, and yet city pension debts today are 4.5 times larger.
• The city’s combined pension funded ratio fell 29.3% percentage points between 2003 and 2019.
• Pension costs are crowding out core government services. City pension contributions as a share of its total budget have grown to 10.1% percent in 2019 from 4.6% percent in 2003.
Key findings in Wood River, which received a B in 2003:
• The city’s total score dropped from 84 in 2003 to 60 in 2019, a decline of 24 points.
• In 2019, city taxpayers contributed 4.1 times more to pensions compared to 2003, and yet city pension debts today are 5 times larger.
• The city’s combined pension funded ratio fell 24.1% percentage points between 2003 and 2019.
• Pension costs are crowding out core government services. City pension contributions as a share of general fund budgets have grown to 25.0% percent in 2019 from 10.4% percent in 2003.
Key findings in Edwardsville, which received a B in 2003:
• The city’s total score dropped from 84 in 2003 to 71 in 2019, a decline of 13 points.
• In 2019, city taxpayers contributed 4.5 times more to pensions compared to 2003, and yet city pension debts today are 5.6 times larger.
• The city’s combined pension funded ratio fell 16.2% percentage points between 2003 and 2019.
• Pension costs are crowding out core government services. City pension contributions as a share of general fund budgets have grown to 13.3% percent in 2019 from 7.4% percent in 2003.
At a press conference May 5 announcing the results, Wirepoints president Ted Dabrowski said the state gets most of the pension crisis attention, but that cities and municipalities are facing "skyrocketing" pension costs.
He said that in 2003, only seven cities were in crisis, but the number increased dramatically to 102 in 2019.
Local officials are "handcuffed" by state mandates, he said, adding that they can "do nothing" about collective bargaining, have "zero power" to negotiate contracts and have difficulty in trying to merge excessive levels of governments.
"Retirement security is collapsing...pension debt is three times higher (than in 2003)," he said.
"Nobody is winning. Taxpayers are increasingly feeling there's nothing to do but leave.
"That is why we are speaking up."