Guest Editorial: Normal’s pension problem

In January of 1776 Thomas Paine published a pamphlet titled “Common Sense.” In it, Paine advocated for the cause of what later that year became the American Revolution. Originally, Paine published “Common Sense” anonymously. And so it is that I come to my fellow residents of Normal as a concerned citizen and taxpayer with a burden to awaken people to the seriousness of an impending financial crisis in Normal, Illinois.

Specifically, I want to address the seriousness of our public pensions. This is the elephant in the room in our state legislature, but it also affects us locally. Here’s how.

Background

The Normal City Council has raised property taxes 11 years in a row in order to fund our police and fire pensions. Instead of budgeting for these payments at the beginning of the year, the Normal City Council has turned to a tax levy at the end of the year as the most elastic source of funding available. In other words, they can spend money foolishly all year long and when it’s time to make pension payments, they do so by raising a property tax levy.

Present Trajectory

The State of Illinois has mandated that public pensions be funded to at least 90% by year 2040. The Normal City Council has made it their goal to have pensions funded at 100% by year 2040. To accomplish this goal, Normal property owners have been hit with a property tax increase every year for the last 11 years. If we continue down this path we have 22 more years of tax increases in order to reach full funding by 2040. The lunacy of this should be evident to us all. We’ll be taxed out of our homes if this continues. Sadly, it shows no sign of stopping.

Objections to the present funding of Normal City Pensions:

-There is a common misconception in our community that there is no other way to fund pensions apart from a property tax levy. Some Council members have gone as far as to read state statutes at Council meetings implying they have no other choice but to raise taxes. Let’s be clear. This is a decision this Council has made on how to fund pensions. It is not a state law. There is nothing in state statute that would prevent pensions from being funded through the general fund or any other available revenue stream. These matters are up to Council members to decide and they have opted for a tax increase 11 consecutive years.

-In spite of increasing taxes 11 years in a row, our pensions are severely underfunded. According to the Comprehensive Annual Financial Report for the City of Normal that Andrew Huhn presented at Tuesday night’s Council meeting, our police pension is funded at 53.41% and our fire pension is funded at 57.43%. But, these troubling figures were not presented Tuesday night. Instead Pantagraph reporter Derek Beigh offered this gloss of the problem in Wednesday’s paper: “the hikes are working, with both police and fire pensions closer to being fully funded than they were a year ago. The town hopes to reach 100 percent funding by 2040.”

Who do they think they’re fooling? The fire pension is only up 1.9% from last year and the police pension is only up 1.65% from the same year. And, that’s with a 6.38 increase to the property tax levy at the end of 2017. Under, this present trajectory Normal might reach close to 90% funding by 2040, but you’ll be taxed out of your home before they get there. But more, troubling is these figures do not include declining property values, more people entering the pension system, a lack of reforms by the state and the increasing problem of out migration in the state of Illinois. It’s a recipe for an economic disaster.

-Normal residents should find no consolation that our tax levy is lower than eight other downstate comparable communities in Illinois. This is the standard talking point we hear from Normal City officials and the Pantagraph is all too eager to repeat it. Yet, we’re still talking all things Illinois where it is a fact we pay some of the highest property taxes in the nation. What should matter to us is not what the tax levy is in Decatur or Peoria, but what it is in communities where people from Normal are actually moving. We’re talking here about locally based companies who are growing jobs out of state. Places like Dunwoody, Georgia, Richardson, Texas or Tempe, Arizona. No doubt people in Normal know people who have moved to all three places in the last year alone. Those of us left behind are stuck paying higher taxes.

Conclusions

When Normal residents live with the lingering threat of a property tax increase each year, our city representatives are not making our community an affordable place to live. Higher property taxes discourage economic development in our community. Most new businesses who consider coming want some type of a tax rebate incentive up front. Our city leaders don’t seem to understand that companies ask because our taxes are too high. But, what about “Normal Joe taxpayer?” What type of relief does he get?

Illinois faces an impending financial crisis that is driven largely by our looming pension debt. Reversing this problem will ultimately require changing the Illinois State Constitution to enact the needed reforms. Don’t count on that happening anytime soon.

In the meantime, Normal is going to have to tighten its belt and get serious about paying down their pension debt by some other means than a yearly burden on the back of property owners.

The money is there, Normal City officials choose to spend it foolishly. May Common Sense prevail.

13 thoughts on “Guest Editorial: Normal’s pension problem

  1. NO need to worry! Portillos will be paying taxes in years to come, and by then, they’ll be a tourist destination! Not to mention Rivian, I can already see their stock value surpassing TESLA, and with all their capital in local banks, there will be free money everywhere!
    Seriously, BOTH towns NEED to cut out their EXCESSIVE spending, and QUIT threatening us with lesser services, higher crime, worse streets, etc. and GET BUSY doing THEIR jobs!!
    There is NO REASON that both cities should be in the shape they are in when we have a good economy, which is being sucked dry by BAD decisions by the leadership of BOTH cities!
    GOOD EDITORIAL!

    Liked by 1 person

    1. Way ahead of you, commenting101! I left earlier this year. So glad I said “yes” to the move. Those with in-demand skills and the monetary means continue to leave town. Koos and his pals in the media try to downplay the economic decline and suggest that State Farm is relocating as many jobs to Bloomington as are leaving. This may or may not be true. (Likely the latter.) The kicker is that the jobs coming in are low skill, low wage jobs, while those leaving are tech, innovations, and higher skill, higher wage jobs.

      Liked by 2 people

      1. The out-migration issue will not improve. Has anyone noticed that about 2 years ago, State Farm said they would be maintaining about 17K employees in BN? Now they are saying 15K. And the people moving out/being downsized were making, many of them, six figures. The jobs moving in are call center jobs. Not terrible jobs, but they make about $30K. The income disparity is a problem that is going to get worse. Add to our already high, and constantly increasing property taxes the Unit 5 operating bond payments, and the upcoming tax increase referendum, and the average citizen will not be able to afford to live here. Further depressing property values.
        I have recently been looking at property in a neighboring state. The property taxes are a small fraction of what they are in IL (approximately one-third of what they are here) for a roughly comparable house, in an equivalent metro area.

        Liked by 1 person

      2. I’m told the number at State Farm is closer to 13,000. They’re clearly playing three card monte with the relocations, shuffling of personnel, and vague press releases that go unchallenged by the local dead tree and government-welfare radio station. State Farm will do what it does, I get it. My beef is not with them, but our local politicians and media that try to minimize the decline that’s right under their nose.

        Liked by 1 person

  2. All one has to do to realize how bad these idiots have…up. Go to realtor.com,
    pick a house same value as yours and pick a comparable city in most other nearby states. Look at what their real estate tax is….you will be sickened. Comparing my house (not located on a lake) to one located on a lake in Wisconsin and Minnesota I found they paid 40 to 50% of what I am honored to pay in Illinois. It makes me wonder if in my will I should ask on my death my house to be leveled so the damn county won’t get as much in the future from it. Can we say Atlas Shrugged? Don’t agree with everything in the book but there are some good points brought up and comparisons can be made to our local failure of a government…..and then there is Madigan’s lap dog JB Prickster….

    Liked by 2 people

    1. Look at your tax bill again. Is it the Town of Normal to blame?
      Don’t think so. It’s Unit 5. Complain about taxes all you want….but know where the money is going first

      Like

  3. Again, I will challenge anyone to explain the difference between any government and a criminal organization. ANY Government…at ANY point in time in history. Any takers?

    Mind you, to do so will require you to show me a government that has funded itself independently without resorting to involuntary taxes on property or wages – because that’s called theft (which, the last time I checked, is immoral).

    Government is nothing more than a glorified racketeering and extortion operation, with the explicit understanding that it’s codified monopoly on violence and coercion will be used to extract your tribute.

    Every government in history has operated in this fashion in one form or another. And just like any other criminal organization, it extracts more and more because you allow it.

    The sooner you people start looking at governments this way, the better off we will be.

    Like

  4. Back in April, I left State Farm because that place is turning into it’s own train wreck. I took my IT and engineering skills to Columbus IN. I am making more than I did at State Farm. Taxes are lower. Roads and infrastructure are maintained better. People aren’t shooting each other in the hood. Columbus doesn’t have a hood like Bloomington. I suggest that if you can, move out of Illinois. It was a liberating feeling for me. I don’t feel like as much of my labor is going to pay the masses of human debris. This includes both those who work for government and those deadbeats who look for the hand out from government.

    Liked by 2 people

    1. I’m an escapee too, Mike. Although I’m in a different new location, my sentiment is exactly the same. Your insight from State Farm matches my experience and that of my now ex-colleagues. The drawn-out process of reductions and relocations has led to low morale, which has seen talented folks with market skills just pick up and leave State Farm and the community. The $30k a year claims and customer service jobs are replacing the $70+, $100k+ a year tech and management jobs. Bots will take out claims and customer service departments in due time. Not a winning formula for Bloomington.

      Like

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