The Sky is Falling, The Sky is Falling ! !
Exaggerating 101
Things written on the internet ripple quickly through the ether, and become true by virtue of everyone quoting the original blog. If enough people say something, it must be true, correct?
Take, for example, recent blogs and articles worrying about the cost of pensions. This is indeed a problem, but we should get accurate facts.
A recent story has rippled around the blogs, saying that “Pensions Eat 70% of the City of Decatur, Illinois Budget. Anyone who knows anything about public budgeting quickly knows this can’t be true – pensions are expensive, but who is driving the police cars and fire trucks and fixing the streets if all the money is going for fat cat pensions?
I am not sure where the story started, but the first site on a google search for "Pensions Eat 70% Budget Decatur, Illinois" states the following.
“Pensions Eat 70% Decatur, Illinois Budget
Please consider Pensions eat up growing portion of city of Decatur's property tax revenue
Please consider Pensions eat up growing portion of city of Decatur's property tax revenue
As the Decatur City Council prepares to convene Monday to discuss setting its portion of the local property tax levy, the largest burden on those revenues - funding the pensions of police, firefighters and city employees - remains a persistent and growing challenge.
City Manager Ryan McCrady and Finance Director Ron Neufeld highlighted some telling statistics in the city's attempts to maintain its pension funds over the last decade.
"We've been putting in what we're required to put in, but the unfunded liability keeps growing," McCrady said.
In 2001, about 30 percent of the city's property tax levy went into paying down the pensions of its retired police and firefighters. In 2011, 70 percent of it will go toward pensions, even as recent years have seen cuts to other services that draw their funds from the same source, including the Decatur Public Library.”
City Manager Ryan McCrady and Finance Director Ron Neufeld highlighted some telling statistics in the city's attempts to maintain its pension funds over the last decade.
"We've been putting in what we're required to put in, but the unfunded liability keeps growing," McCrady said.
In 2001, about 30 percent of the city's property tax levy went into paying down the pensions of its retired police and firefighters. In 2011, 70 percent of it will go toward pensions, even as recent years have seen cuts to other services that draw their funds from the same source, including the Decatur Public Library.”
Blog article on the link below:
This is of course not accurate. I searched the internet, and found a simple summary of the Decatur, Illinois budget.
The summary shows that the City government takes only 14% of the total property taxes paid by its citizens. 64.72% of that does indeed go to pensions, but property tax is of course a small part of city budgets in Illinois. Sales tax and other revenues make up a much larger portion of the budget. So it is accurate state that 64.72% of the Cities Property Tax Revenue goes towards pensions, but the cities total income and budget is much larger.
More than you would ever want to know about Decatur’s budget.
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There have been a number of stupid and costly pension decisions. In Illinois the State Legislature makes the law, and the municipalities must follow the law. The State of Illinois recently required that 100% of Firemen pensions would go to their spouse on the death of the firefighter from whatever cause. This is of course costly.
What happens is the Fire pension folks worked on the Legislature. The Legislature knew that the Firemen were closely watching this issue, and they would loose votes if they did not vote for the change. No one was watching out for the other side of the issues, So the Legislators could be the good guys, getting the support of the Firefighters, and leaving the cities and towns to pay the bill.
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