Illinois comptroller can now seize local funds for late pension payments

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In the first year that Illinois’ comptroller can seize local government’s funds for delinquency of pension payments, a report shows the debt of Illinois’ police and fire pensions has exploded, potentially leaving local services threatened.

A report by the Commission on Government Forecasting and Accountability shows Illinois’ 653 police and fire pensions outside of Chicago are nearly $10 billion in debt.

This reflects a funding ratio of only 58 percent.

Municipalities can be penalized if they miss a payment. 2018 is the first fiscal year that Comptroller Susana Mendoza can legally withhold the full amount that the city falls behind from state payments to the city via the Local Government Distributive Fund.

If a municipality falls more than 90 days behind in its required contributions, under the 2016 law, the police or fire pension fund “may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments in accordance with any applicable rules of the Comptroller.”

Mendoza could then take the delinquent payments owed to the pension funds out of the city’s expected LGDF money.

Cities across the state have announced tax increases that will go to paying off growing pension costs. The city of Danville now collects a “public safety pension fee” that costs residents up to $267 a year to pay down their public pension debt.

Commission member and State Sen. Jil Tracy, R-Quincy, said most of her city’s property taxes go to pay police and fire pension debt.

“It’s definitely a snowball rolling, as to edging out other vital services,” she said. “They have to struggle to find ways to meet that obligation but still provide core services to the public.”

Mendoza’s office did not immediately provide statistics on whether this law has yet to be utilized.

From Illinois New Network. For more Illinois News Network content, visit ILNews.org.

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