Daily Archives: November 17, 2018

Village plays the blame game with pension fund shortfall

Village officials blame everybody but their own policies for pension funding shortfall as justification for property tax increases

If you listen to village officials defending their decision to hike property taxes by 35% this year, they’ll point fingers at Springfield, the previous disgraced actuary… but never their own policies.

While it is no doubt Springfield has contributed to the problem (see the “Edgar pension ramp”), neither Chmura nor any other village official will admit the major reason for the pension funding shortfall: higher salaries and benefits for employees.

Only the new actuary “dared” to mention this critical fact.

We previously reported how the Village paid the pension payments out of the general fund in previous years, but has since shifted the burden entirely to homeowners.

“Village Administrator” Joanna Skupien, reading from a prepared statement at the November 14 tax levy hearing, stated how the Village would supplement the police pension payments from the general fund “if financially able to”.

Major James Chmura, just this year, raised the Norridge sales tax to 10.5% . Yet by Village officials’ own admission, and supported by the Village’s financial documents, not a penny of that tax increase has gone into the police pension fund.

Where is all this sales tax money going?

Village property taxes going up

Skupien’s statement indicated the average property tax increase for homeowners would be $35 next year, however public bodies are notorious for under reporting tax increase numbers in order to “sell” tax increases.

Based on our calculations, however, depending on your home assessed value (as determined by outgoing Cook County Assessor Joe Berrios), as well as the median home value in Norridge, it’s going to be more like between $50 to $100 higher next year, based on current property assessment trends.

This may not seem like a lot (unless you’re fixed income). But this is just one of the many public bodies on your tax bill.

For example, these pension payments only cover the police pension fund, not the firefighters and EMT (ambulance) pension fund, as the Village of Norridge does not provide fire and ambulance services, as many other municipal governments do.

The concern however is this 35% increase year over year has opened the floodgates for a substantial ramp up of the Village portion of our property taxes, every year.

The actuary recommended a pension payment of $2.1 million for next year, which means the $1.6 million isn’t enough.

As the pension funding level has dropped to 55.67% this year, the recommended amounts in 2020 will no doubt be higher, perhaps much higher.

So that means we may be looking at another 35% or greater tax increase in 2020. And because the Village is “home rule”, it can raise taxes any amount without a referendum.

It’s not the $50 increase for next year… it’s the $100 or $200 or $500 increase the year after that.

We only have to look at Chicago to see how their property taxes have increased under Rahm Emanuel, for the same stated reasons: pensions.

It may have not been much the first year, but the snowball got bigger and bigger year after year until it really stated to hurt.

Overspending the issue

All in all, the Village’s song and dance over the property tax increases, sounded like a bunch of excuses to continue overspending.

As the new actuary admitted, there’s no evidence previous actuary Tim Sharpe made decisions that adversely affected Norridge’s pension fund investments.

Neither Sharpe, nor Springfield, are responsible for the high salaries and benefits.

There is nothing in the Illinois constitution that requires or guarantees salaries or benefits for current employees. The village could freeze salaries (as we and others have advocated) as well as having employees to pay more for health care benefits.

The village could also reduce, even modestly, the size of its patronage army, and implement a real anti-nepotism policy. They could hire people only when there is a job requirement, not because a Village employee’s family member needs a job.

They could outsource certain kinds of work that don’t really need to be performed by Village employees.

This would, however, require Village politicians to care more about municipal finances overall, than keeping their regime in power.

Apparently, that’s too much to ask from Norridge’s politicians.

Recording of the November 14 2018 Village of Norridge tax levy hearing (full video – 19 minutes)