By: Diane Benjamin
Normal is pretending pensions can only be funded with property taxes. They choose to fund them with property taxes and have increased property taxes 11 years in a year to fund them.
The goal is to get to 90% funded by 2040. Will they achieve that goal?
Not a chance!
2018 numbers from the new CAFR (financial statements) http://www.normal.org/DocumentCenter/View/14264/CAFR18-FINAL-DOC?bidId=
PDF page 131 – Police pensions are 53.41% funded.
PDF page 132 – Fire pensions are 57.43% funded.
PDF page 133 claims the police fund earned 17.09% in 2018.
PDF page 134 claims the fire fund earned 25.82% in 2018.
Even with those massive investment returns, the total percent funded only increased around 2%. Those returns aren’t sustainable and should make people wonder what they invested in. Crypto currency?
What about previous years?
Numbers don’t lie, especially the ones filed with the State of Illinois: warehouse.IillinoisComptroller.com
Fire pension funding – Note the percent funded, even with tax increases it wasn’t going up:
Police pensions – Note the same is happening here:
What about funding prior to 2015? The first three columns are Police, the last three are Fire.
Even as property tax rates were increased because Normal doesn’t budget pension expenses for Police and Fire, the funding percentage is much lower than 2014.
Citizens should be outraged that Normal has priorities other than pensions so they just raise your ridiculously high property taxes.
More outrage should be coming from the police and fire unions whose members expect to retire someday.
Normal hasn’t added to their Rumor vs Fact page since 2017. Maybe they will now. I can’t wait. http://www.normal.org/1378/Rumor-vs-Fact
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This state and local communities need to wake up and freeze pensions where they are, convert everyone to 401K style with matching percentages similar to private sector, and raises / promotions / salaries inline with the private sector. It’s the continued expansion of the government that leads to pension funding percentages that refuse to budge even with excellent investment returns and additional tax dollars paid in.
The public employee unions (and their supporters in government) are playing a game of chicken with the pensions. They don’t want to compromise on these lucrative benefits (who wouldn’t, right?) and appear willing to watch services suffer, debt grow, taxes increase, and more companies leave Illinois. Like a Ponzi scheme, the pensions paid out today require the money of current workers who themselves are promised huge returns. At some point, this will implode. While I agree with Lizard’s proposal, that will never happen in Illinois. Diane – speaking as one in the field of accounting, would you agree that those returns are unsustainable and point to a corresponding decline on investment in future down market? I’ve heard that pension funds are promising big returns as an accounting gimmick, which then forces them to invest in riskier assets or investments. Thus, when it rains it pours…both in up markets and down markets.
If you invested in a standard 70-80% equities, just basically following the DJIA or S&P 500, those 15-20% returns would be common for 2017. You are right they wouldn’t be for every year though. The guaranteed 3% raises are killing any progress that can be made, so is allowing people to retire at 50-55 with full pensions and medical coverage.
Oh where oh where have 11 tax increases gone?
Not one more Town of Normal.
Somebody has got to pay so Normal can build more shrines to their retired tax vampires. See Mark Peterson Plaza as a prime example of WASTE!!!!