Rockford Mayor: Illinois cities should be able to file for bankruptcy

SPRINGFIELD – Rockford Mayor Larry Morrissey said Wednesday that Illinois towns and cities would be in a better position to face their public safety pension obligations if they had the ability to file for bankruptcy.
The statement came during a downstate and suburban mayors’ news conference held in Illinois’ state capitol.
“If the state doesn’t give authorization to go to bankruptcy court, you simply cannot do it,” Morrissey  said. “Without that … cities are simply left with no recourse when dealing with collective bargaining … in police and fire pensions. So what we end up being is boxed in. … Frankly I wish we could appeal directly to a bankruptcy court, I think it would give us more leverage to get deals done.”
The mayors generally shared their concerns that skyrocketing public safety pension costs facing municipalities would continue to threaten local budgets, lead to higher taxes, cuts in services and even layoffs.
“Soaring pension costs aren’t just a Chicago issue or a state issue. The fire and police pension systems are suffocating the budgets of every town, village and city in Illinois,” said Peoria Mayor Jim Ardis. “In Peoria, for every dollar the city pays a firefighter, we pay over 50 additional cents to fund their pension. For police officers, it’s 41 additional cents.
“Mayors from across the state are here to help our constituents understand that there are currently legislators who are providing caviar and Champagne pensions and using our city credit cards to pay the tab,” he added.
“These spiraling out-of-control costs not only demonstrate how unsustainable the system has become, but also the urgent need to reduce the burden on taxpayers,” said Aurora Mayor Tom Weisner, a member of the Pension Fairness for Illinois Communities Coalition.
“It is a monumental problem for local communities that most people simply do not realize,” said Springfield Mayor J. Michael Houston. “They realize the problem at the state level, they realize the problem in the city of Chicago, but they’re really not focused on the fact that this is a problem that stretches across the state of Illinois.”
Houston added the problem would impact citizens directly.
“From a local perspective, as we look out into the future, we have one of two choices,” he said. “We either have to increase our revenue, which means some kind of tax increase, or we have to cut services in order to be able to fund these pensions.”
Pat Devaney, President of the Associated Fire Fighters of Illinois, disputes much of what the mayors said.
“There are zero facts to supports these assertions,” he said. “We have conducted an independent analysis of the 292 funds and many are healthy. Some are struggling because mayors have underfunded them and have not met their obligations. Given the fact that they haven’t managed budgets adequately, it is extremely irresponsible to ask the General Assembly to reduce their obligations or even try to become a deadbeat and get out from under them. That’s certainly not good public policy.”
“The math is easy, the politics are hard,” said Morrissey. “The politics are hard because the benefit levels are set in Springfield. The liability for the benefit doesn’t end up on the state’s balance sheet. IT has been very difficult for us to communicate what’s going on in Springfield and someone’s property tax bill.”
“We are going to see a continual withering away, degradation, of services and that’s the bottom line,” he added. “It probably won’t be the city of Rockford. We are funded pretty well, but we’ve got one of the highest property tax rates in the state. It’s been a burden on us, so what we are looking for is relief that wouldn’t require a Chapter 9 filing.”
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Comments

  1. one of many says:

    But, of course, in Hellinois, they just raise taxes to keep the mismanagement, waste, bloat and “I Got Mine!” going!

  2. There are no competent managers and reform leaders in any of the Public Sector operations today. It takes courage to perform the necessary actions by Public Servants to represent the taxpayers and address the massive fraud and corruption in the Public Sector operations. The changes necessary today to address the 50% over staffing and compensation plus the millionaire pension scam in the Public Sector require strong leadership and major periods of conflicts like strikes. This is not a period for the weak in management but the restructuring and reform actions must be done if the survival of the city, state and nation is desired. One needs to understand that there is no functional Public Sector operations including the Judicial Systems. The leaders can start by freezing all compensation actions including taxation increases and let attrition commence. The present state of Public Sector operations is a very difficult and dangerous state that normally ends in revolutions.

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