Lemont Township residents’ $22 million pension crisis on April 1 ballot

A local referendum would tell state lawmakers how Lemont Township voters would like to fix $22 million in pension debt for which they are responsible. Pension reform is the surest way to provide property tax relief.

Lemont Township voters April 1 will have a chance to declare how they want to handle the public pensions driving up their property taxes – a $21.7 million debt for which they are responsible.

Municipal government pension obligations cost taxpayers living in Lemont more than $3 million annually.

While the pension debt is for municipal employees only, all voters in the township get a say in how local and state pensions should be handled. Despite spending nearly $3 million annually on pension obligations, taxpayers in Lemont face nearly $22 million in unfunded pension liabilities from city police and firefighters. Collectively, municipal pension funds in Lemont have a funded ratio of 75%. Experts warn pension funds with funded ratios of 60% or less are considered deeply troubled. With a funded ratio of only 68%, the Lemont Police Pension Fund is dangerously close to this level.

Large pension obligations and unfunded liabilities are part of the reason why property taxes in Lemont Township are nearly double the national average. Property taxes across Lemont Township exceed 1.8%, while the U.S. median sits at just 1.0%.

The typical homeowner in Lemont Township pays nearly $8,500 in property taxes annually, according to the U.S. Census Bureau.

Millions of residents’ property tax dollars are diverted away from services towards municipal pension debt within the township, leaving property taxes among the highest in the nation and driving tax bills higher every year.

Fortunately, voters in Lemont Township will have the opportunity to begin to reverse this trend. A referendum will appear on the April 1 ballot that asks if voters would approve constitutional pension reform if savings could be directed towards property tax relief. The referendum reads as follows:

“Do you support constitutional pension reform to protect workers’ existing retirements and generate savings which could provide property tax relief or be reinvested in the community?”

While non-binding, the referendum is the first step in voters making their voices heard and telling public leaders pension reform to provide for property tax relief is an acceptable tradeoff for taxpayers. A pension reform plan such as one originally developed by the Illinois Policy Institute – based loosely on bipartisan 2013 reforms that passed the Statehouse and were approved by the governor – would help to eliminate state and local unfunded pension liabilities and achieve retirement security for government pensioners without taking away current benefits. A constitutional amendment is needed because the Illinois Supreme Court ruled in 2015 that any pension changes were unconstitutional.

With polls showing nearly 3 in 5 Illinoisans believe the value of public services they receive are not worth the property taxes they pay, this referendum will empower local voters to communicate their priorities directly to state leaders and start building momentum for substantive property tax reform across Illinois.