Geneseo hikes property taxes by 10 percent to pay for pensions
The city of Geneseo hiked its property tax levy by nearly 10 percent to pay for police pensions.
Local leaders in Geneseo, Illinois, made their community’s pension problem known Nov. 13 when city aldermen voted to hike the city’s property tax levy by 9.99 percent.
City Administrator Lisa Kotter cited police pension costs as the driving force behind the levy hike, according to the Dispatch-Argus. This increase will bring Geneseo’s total levy to $1,162,908. The city will hold a Truth in Taxation hearing Dec. 11.
Like many Illinois communities, Geneseo is grappling with the state’s pension funding requirements. Municipal pension funds are required to be 90 percent funded by 2040 under a state law that went into effect in January.
In 2017, Geneseo had just 53 cents for every dollar owed to its police pension fund, according to a report from the state comptroller. That represented an increase from its 48 percent funding level in 2016, but a decrease from the 56 percent funding level the fund saw in 2015.
Auditors recommended the city increase the police pension portion of its property tax levy to $473,928 from $388,512, according to the Dispatch-Argus, and projected that the city will need $497,000 for pensions next year – and $521,000 the following year.
Geneseo, a city with a population of 6,500, is far from the first municipality to see pension costs spike its property tax levy. The small southern Illinois city of Carterville hiked its levy upwards of 30 percent – its largest property tax hike in history – to keep up with rising public safety pension costs. Norridge, Peoria, Rockford and Chicago each face pension crises.
Defined-benefit pensions have failed both government workers and taxpayers, imperiling workers’ retirement security while tethering taxpayers to massive, unpredictable costs.
State lawmakers have the ability to reverse course, provided they’re willing to pursue the necessary reforms. Lawmakers in Springfield must amend the Illinois Constitution to allow for changes to the growth in future, not-yet-earned pension benefits – while protecting benefits already earned – to enable municipalities to regain control over their finances.
Without a constitutional amendment, continual growth in unfunded pension liabilities will cast an ever-larger shadow of uncertainty over taxpayers and government workers.