WBEZ | Terry Link http://www.wbez.org/tags/terry-link Latest from WBEZ Chicago Public Radio en Chicago suburbs grapple with their own pension crisis http://www.wbez.org/news/chicago-suburbs-grapple-their-own-pension-crisis-110166 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/pothole - AP Charles Rex Arbogast.jpg" alt="" /><p><p>On a recent drizzly weekday afternoon, Mt. Prospect Mayor Arlene Juracek climbs into the back seat of an official white village SUV.</p><p>She&rsquo;s guiding a tour of her local pension crisis.</p><p>Behind the wheel, Assistant Village Manager Dave Strahl hangs a right down Forest Avenue, on the northern end of this upper middle-class northwest suburb. In a few seconds, he&rsquo;s slaloming around potholes on a road that&rsquo;s crumbling, awash in gravel.</p><p>&ldquo;We fell behind in our street maintenance,&rdquo; Juracek explains, leaning forward from the backseat. &ldquo;So as your revenue sources are limited and your costs are escalating, you start to make the tradeoffs. ... One of the most escalating costs is the pension costs.&rdquo;</p><p>Even Juracek admits there is not a direct correlation between potholes and pensions.</p><p>But mayors around Illinois are complaining of a similar trend: State-mandated local pension contributions for police and firefighters are straining local budgets, threatening to squeeze out money for basic government services. Yet according to a <a href="http://cgfa.ilga.gov/Upload/2013FinancialConditionofDownstatePoliceFirePA96-1495.pdf" target="_blank">state study from last year</a>, the total projected future debt for suburban and downstate public safety pensions has ballooned at least eight-fold since the early 1990s.</p><p>That has mayors warning of deeper service cuts, higher taxes and compromised retirement security for cops and firefighters.</p><p>Experts and municipal groups say mayors are even more anxious because, starting next year, a new Illinois law takes effect that will enable the state to intercept tax dollars from towns that don&rsquo;t pay enough into their police and fire pension funds.</p><p>A <a href="http://pensionfairness.org/" target="_blank">coalition</a> of nearly 100 towns and municipal groups is finally sitting down with state lawmakers and labor leaders to try to stabilize those pensions. But the group fiercely disagrees with police and fire unions over what caused the underfunding - and how to fix it.</p><p><strong>Budget pressures</strong></p><p>Illinois has more than 600 individual, locally-controlled pension funds for cops and firefighters outside the city of Chicago. And the trend in Mt. Prospect is similar to that seen in towns and cities across the state, regardless of their size or economy.</p><p>The village has seen the health of its local police and fire pension funds steadily decline over the last several years. It&rsquo;s projected that each will have just more than half of the money it needs to pay out in future retirement benefits, a ratio known as the &ldquo;unfunded liability.&rdquo; But all the while, the village&rsquo;s required police and fire pension payments have nearly quintupled since 1997.</p><p>Mayors like Juracek say this puts pressure on local budgets in ways that are beginning to hit residents.</p><p>In the suburbs, Elk Grove <a href="http://www.elkgrove.org/Modules/ShowDocument.aspx?documentid=2041" target="_blank">recently passed</a> a utility tax just to pay for pensions. Downstate Bloomington approved a <a href="http://www.cityblm.org/index.aspx?page=575" target="_blank">similar measure</a> late last month.</p><p>Officials in Niles say rising pension costs contributed to a recent sales tax hike. And in Fox River Grove, northwest of Chicago, the mayor says he may have to choose between borrowing money to build a new train station, and borrowing money to bolster his police pension fund, which is projected to have just about a quarter of the money it will need to pay retiree benefits in the future.</p><p>Mayors around Illinois say the economic recession dealt a large blow to their local pension funds. But they also blame what they call &ldquo;<a href="http://pension.iml.org/page.cfm?key=3536" target="_blank">pension sweeteners</a>&rdquo; - that is, benefit enhancements passed by state lawmakers, who must approve all changes to pension law.</p><p>Many mayors claim the increases are an unfunded mandate, pushed by powerful police and firefighter unions and okayed by Springfield lawmakers.</p><p>Longtime suburban Roselle Mayor Gayle Smolinski says state accused lawmakers are often &ldquo;happy to be the purveyors of largesse at our backs.&rdquo;</p><p>&ldquo;I don&rsquo;t have a money tree in the back that I&rsquo;m saying I just don&rsquo;t wanna give to you guys,&rdquo; said Mayor Gayle Smolinski, of suburban Roselle. &ldquo;I&rsquo;m talking about real money that&rsquo;s coming in from my taxpayers, many of them who don&rsquo;t have pensions anymore.&rdquo;</p><p>The coalition is <a href="http://pensionfairness.org/page.cfm?key=11348" target="_blank">asking</a> the General Assembly to scale back the three percent compounding annual benefit increases given to downstate cops and firefighters. Lawmakers <a href="http://www.wbez.org/news/legislature-passes-historic-pension-vote-109287" target="_blank">recently approved</a> similar cutbacks for the state of Illinois&rsquo; pension funds, and for <a href="http://www.wbez.org/news/mayor-emanuel%E2%80%99s-pension-plan-headed-governor-109989" target="_blank">Chicago laborers and municipal workers</a>. Unions are <a href="http://www.wbez.org/news/politics/unions-file-lawsuit-over-pension-changes-109588" target="_blank">suing</a> over the state-level benefit changes, claiming they violate the Illinois constitution.</p><p>The coalition also wants to raise the retirement age for downstate and suburban police and firefighters, and make them contribute more toward their pensions out of each paycheck. They would also consolidate the hundreds of local pension funds across Illinois to save money on administrative costs, similar to the way <a href="http://www.imrf.org/info/about.htm" target="_blank">municipal workers&rsquo; retirements</a> are structured.</p><p>Illinois State Sen. Terry Link, D-Waukegan, has been spearheading talks between municipal groups and police and fire lobbyists.</p><p>&ldquo;Then we&rsquo;re putting it off a year or better before we can, uh, try to help the problem,&rdquo; Link said. &ldquo;So that&rsquo;s what I&rsquo;m trying to do right now, is work on some things that can be done without causing, uh, a court case. And then the taxpayers could see some relief immediately.&rdquo;</p><p><strong>&lsquo;Not about potholes&rsquo;</strong></p><p>But lobbyists for police and fire pensions in Springfield say mayors have been misleading the public about the nature and cause of the pension problems.</p><p>&ldquo;It&rsquo;s definitely not about potholes,&rdquo; said Sean Smoot, a lobbyist with the Police Benevolent and Protective Association of Illinois, which represents downstate police pension funds.</p><p>Smoot said the choice these mayors are presenting - cutting basic services or paying public safety pensions - is a false one.</p><p>And Smoot rejects the claim that mayors and municipal interest groups had no hand in increasing public safety pension benefits over the years.</p><p>&ldquo;These pensions sweeteners that they like to point to, those didn&rsquo;t happen without their agreement,&rdquo; Smoot said. &ldquo;So, for them to turn around and say...&rsquo;General Assembly, you put these unfunded mandates on us,&rsquo; it&rsquo;s just simply not true.&rdquo;</p><p>Pat Devaney, with the Associated Fire Fighters of Illinois, maintains retirement benefits didn&rsquo;t cause this crisis.</p><p>&ldquo;But it&rsquo;s a great talking point for them to stand up at a press conference, deliver, and not accept any responsibility for what&rsquo;s gone on in their community,&rdquo; Devaney said.</p><p>In fact, Illinois pension benefits for cops and firefighters outside of Chicago are actually less generous than similar plans across the country, according to an analysis for WBEZ by the non-profit Urban Institute, and Washington, D.C. think tank.</p><p>That&rsquo;s largely because cops and firefighters here do not get Social Security, said Richard W. Johnson, who heads up the institute&rsquo;s Program on Retirement Policy. Johnson&rsquo;s analysis found that Illinois&rsquo; downstate public safety workers also pay more than average toward their own pensions, though they do not have to pay Social Security taxes.</p><p>Instead, Devaney said municipalities shouldn&rsquo;t be allowed to wriggle out of making their required pension payments. He contends towns have been making artificially low contributions for decades - though they should have anticipated the present problems.</p><p><strong>&lsquo;We saw it coming&rsquo;</strong></p><p>Rather than &ldquo;pension sweeteners,&rdquo; longtime Illinois police and fire pension actuary Art Tepfer said the rapidly rising pension costs that towns are struggling with came about by design.</p><p>&ldquo;This is the way that Illinois retains it&rsquo;s No. 1 ranking as having the worst-funded pension funds in the country,&rdquo; said Tepfer, who serves as an actuary to more than 100 downstate and suburban public safety funds in Illinois.</p><p>Tepfer points to a 1993 change in state law, when legislators approved a pension funding scheme that functioned similar to an adjustable-rate mortgage: low payments at first, but rapidly rising payments in the future.</p><p>&ldquo;Well, we&rsquo;re in the future now,&rdquo; Tepfer said. &ldquo;This is what&rsquo;s happened. And that&rsquo;s why we have a pension crisis. We saw it coming.&rdquo;</p><p>Tepfer said smaller funds are also limited in how much money they can invest in stocks, which limits the amount of money they can make on their investments.</p><p>Back on the tour of Mount Prospect, Assistant Village Manager Dave Strahl points out a whopper of a pothole that&rsquo;s eaten the road to its very foundation.</p><p>The longer it goes unfixed, the worse it gets.</p><p>Mayor Arlene Juracek leans in from the back seat to say that&rsquo;s the same reason state lawmakers need to change downstate police and fire pensions - soon.</p><p>&ldquo;If not now, when?&rdquo; Juracek asks. &ldquo;You need to start because the problem gets worse every single year. You need to start at some point in time and really get the ball rolling and impress on everybody the urgency of getting a solution.&rdquo;</p><p><em><a href="http://www.wbez.org/users/akeefe" target="_blank">Alex Keefe</a> is political reporter at WBEZ. You can follow him on <a href="https://twitter.com/WBEZpolitics" target="_blank">Twitter</a> and <a href="https://plus.google.com/102759794640397640028" target="_blank">Google+</a>.</em></p></p> Mon, 12 May 2014 12:27:00 -0500 http://www.wbez.org/news/chicago-suburbs-grapple-their-own-pension-crisis-110166 Lawmakers already horse-trading for new casino bill http://www.wbez.org/content/lawmakers-already-horse-trading-new-casino-bill <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-October/2011-10-18/slot-machines-2_Flickr_Michael-Kapple.jpg" alt="" /><p><p>Gov. Pat Quinn’s rejection of a casino bill Monday created a scramble among public officials, Chicago Mayor Rahm Emanuel’s office and lawmakers who are regrouping to assess their next move.&nbsp;</p><p>Quinn’s refusal to go along with several key sections of the gambling bill, and his assured veto, delivered a grave blow to the Illinois horse racing industry. The industry, which includes five tracks long-suffering from revenue losses, was counting on slot machines at their facilities to help rebuild the purses, or winnings, needed to revive the sport.</p><p>But Quinn’s move also represented a mere step in the process of political horse trading that underlies all complex, controversial bills in Springfield. Senate sponsor Terry Link (D-Waukegan) was already counter-offering Quinn’s proposal less than three hours after the governor’s news conference.</p><p>Link said he will introduce a new casino bill as early as Tuesday that incorporates several of Quinn’s demands—but not all of them. Park City, he said, will remain in the bill as a host town, and so will slots at racetracks, two items Quinn outright rejected.</p><p>“At first, the governor said the bill was too top heavy, but he’s come a long way,” Link said.</p><p>Indeed, Quinn said “yes” to five new casinos, which still marks a significant expansion of gambling. He rejected calls for more casinos as lieutenant governor.</p><p>But Link and the horseracing industry are banking on Quinn changing his mind on slot machines at horseracing tracks, and that gamble remains a major unknown. Allowing racing facilities to install the machines amounts to the creation of five mini-casinos at Arlington Park, Hawthorne Park, Balmoral Park, Fairmount Park and Maywood, in addition to the five casinos in Chicago, Rockford, Danville, Lake County and south Cook County that Quinn said he would support.</p><p>Quinn said he didn’t support the idea of naming Park City, which is in Link’s Senate district, as a host town for a new casino. Instead, Quinn said the gaming board should choose a location in Lake County through a competitive bidding process.</p><p>“There should be no automatic licenses,” Quinn said.</p><p>Dave McCaffrey of the Illinois Harness Horsemen’s Association described Quinn’s announcement as “the first pitch of the seventh game, and the game will play out during the next month.”</p><p>Link said slots at racetracks bring more than 20 votes to the bill. Without it, he can’t pass any gambling expansion legislation, he said.</p><p>Link is willing to compromise on the regulatory components Quinn suggested. The new bill will more explicitly put the Illinois Gaming Board in charge of all decisions regarding new casinos, including the Chicago-owned facility. A Chicago Casino Development Authority will still be formed to oversee a Chicago casino, but it will report directly to the gaming board, Link said.</p><p>The new bill also will allow the gaming board more time and resources to handle the expansion, and the bill will reflect a 26 percent reduction in the number of overall gaming positions. That means fewer places to sit and gamble at each facility. Link would not specify how, exactly, the reduction would be divided among racetracks and proposed new casino locations. But he thought the reduction would appease Quinn’s concerns that the bill, again, would be too big.</p><p>“There is an oversaturation of casino gambling in Chicago and other parts of the state,” Quinn said. “We need to scale it back. We must have a much have smaller expansion of gambling.”</p><p>Link said he and the governor are getting closer in their negotiations.</p><p>“I would say we’re only about a half-mile apart,” Link said.</p><p>He said so far, Emanuel’s office is “on board” with the new bill, which could be heard in a specially-called Senate Executive Committee as early as Wednesday. Lawmakers are on break until the first week of veto session Oct. 25, but Link wants to get the new version moving before then.</p></p> Mon, 17 Oct 2011 19:19:00 -0500 http://www.wbez.org/content/lawmakers-already-horse-trading-new-casino-bill Illinois Senate passes gambling expansion http://www.wbez.org/story/casino/illinois-senate-passes-gambling-expansion <img typeof="foaf:Image" src="http://llnw.wbez.org/4462999763_57308b5085.jpg" alt="" /><p><p>Chicago is on its way to getting a new casino. The Illinois Senate narrowly passed a major gambling expansion proposal Wednesday. The bill would create five casinos around Illinois, including one in Chicago.</p><p>Supporters, like state Sen. Terry Link, D-Waukegan, said he hopes the new casinos will bring an extra billion dollars a year to the state.</p><p>&quot;But we got a huge deficit in the state of Illinois,&quot;&nbsp;Link said. &quot;We got huge problems in the state of Illinois. So you don't look at little things to fix it,&nbsp; you look at big things to fix it.&quot;</p><p>Under the bill, the state's nine current casinos could also expand. And horse race tracks would be permitted to add slot machines. The gambling expansion bill still needs approval from the House of Representatives, which won't likely come up for a vote until January. Gov. Pat Quinn has been critical of the legislation, but wouldn't say if he would veto the measure.</p></p> Thu, 02 Dec 2010 12:38:00 -0600 http://www.wbez.org/story/casino/illinois-senate-passes-gambling-expansion