FILE - Fire truck, firefighter

A “perfect storm” of less money, fewer people and growing pension costs are leading to service cuts in one of Illinois’ largest cities.

Peoria Mayor Jim Ardis said the city’s two-year budget had planned service cuts included to deal with the declining revenue from sales taxes, more vacant homes and higher employee pension costs. He said pensions are on track to use all of the city’s property tax revenue next year.

“There’s only one or two percent of property taxes left after pension obligations to help us with city operations,” Ardis said.

As planned, Peoria officials had to temporarily shut down one of the city’s rescue fire engines to save money.

The annual police and fire pension contributions cost more than $17 million per year. It’s essentially an unfunded mandate from the state, Ardis said of the pension benefits, because state lawmakers set the rates but don’t pay.

“They’re handing out the perks and getting all the stardom with police officers and firefighters unions, but then they hand the dinner check to us,” he said.

Pensions are protected under the Illinois Constitution and cannot be diminished.  

Peoria’s fire and police pension funds are 55 and 57 percent funded, respectively, as of 2016. The city's required contribution is more than $17 million annually. The city is one of hundreds in Illinois that have shorted such pension funds, albeit by a relatively small percentage.

“At an estimated growth rate of 8 percent annually, public safety pensions would require $1.2 million more in 2019 to meet the statutory obligations,” the city’s budget reads. “If the City were to fund at the actuarial level, the amount would need to be $4 million more.”

According to a report by Wirepoints, nearly 60 percent of police and fire pensions were shorted in 2016.

Reporter

Cole Lauterbach reports on Illinois government and statewide issues for INN. Lauterbach has managed and produced shows for news/talk radio stations in both Bloomington/Normal and Peoria, and created award-winning programs for Comcast SportsNet Chicago.

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