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Police & Fire Systems Underfunded
Tue January 31, 2012
Galesburg Looking to Improve Pension Funding
Galesburg Mayor Sal Garza said the city is developing a strategy to avoid the same pension system headaches plaguing the state.
Illinois has billions of dollars in unfunded pension liabilities. While Galesburg's obligations are nowhere near those amounts, Garza is concerned that the police and fire pension systems are receiving less than 60% of what they should be getting from the city.
The city's IMRF (Illinois Municipal Retirement Fund) is at 90%, and Garza would like to bring the police and fire systems up to that level.
But he is not inclined to go along with one idea, which is to simply raise taxes.
“We've had suggestions that we should just tie directly to the taxes and raise taxes accordingly to continue to fund the pension obligations,” Garza said. “To me that just isn't feasible. We have to look at more creative, more dynamic approaches.”
Garza declined to elaborate on what is being considered. “A lot of substantial leg work needs to be done on this still,” he said.
Garza hoped a proposal could be ready for the city council to consider in the next couple months.
He said Galesburg has increased its contributions to the retirement funds over the years, but costs are rising and returns in the city's investment portfolio have been weakened by the recession.
“Very nominal, very meager returns,” Garza said.
He also said there is a rising number of retired city workers, which places even more of a financial strain on the systems.