Here’s an action alert from the Illinois Association of Fire Protection Districts:
ILLINOIS ASSOCIATION OF FIRE PROTECTION DISTRICTS
2015 Annual Conference, Peoria, Illinois
POINTS FOR CONSIDERATION REGARDING LIMITATIONS ON PROPERTY TAXES AS APPLIED TO ILLINOIS FIRE PROTECTION DISTRICTS:
- T
he General Assembly and Governor should take into account the particular governmental functions of the different units of government which levy property taxes. Proposals being offered take a broad sword approach to property tax relief by general limitations imposed on all units of government regardless of function. This is shortsighted and ill advised. The 800+ Illinois fire protection districts provide fire, EMS, rescue, hazmat and other emergency services to their communities. They should not be lumped with townships, library districts, street light districts etc. Any consideration of limitations on property taxes should consider this. While it is easy to say “let the voters decide,” a fire apparatus cannot be purchased on the way to a fire. Extrication and EMS equipment cannot be purchased on the way to a traffic accident. Lives and property will be put at significantly greater risk if this often heard mantra is used as the basis for legislative decision making. While other government services and undertakings may have the luxury of time for multiple and repeated considerations by voters, that is not true of the emergency services. This fact should be recognized and considered by legislators and the executive branch. - The General Assembly and Governor should also take into account the differences among the various units of local government with respect to revenue sources. While they range in size from very large urban and suburban fire department operations with full time career firefighters to very small rural districts operating on a completely all-volunteer basis, all fire protection districts rely almost wholly for their financial support on real estate taxes. They do not receive sales tax or income tax revenues or have authority to adopt the myriad of local taxes that municipalities and counties have been granted authority by the legislature to impose. They do not receive regular and ongoing state support such as that provided to schools. Those units with additional sources of revenue such as schools, cities, villages, and counties should be distinguished from units providing essential public services like fire protection districts, but which are forced to rely solely on real estate taxes for their ongoing financial support. Alternatively, if fire protection districts are to be lumped together by the proponents of property tax relief with those other units of government which do receive large amounts of state and federal support, other sources of financial support should be provided to fire protection districts in a similar fashion.
- The General Assembly and Governor should also take into account the relative burden that various units of local government place on real estate taxpayers. Little to nothing is heard in the discussion of property tax relief on this point. In an unscientific sample of actual tax bills from 25 fire protection districts, the average percentage of the total tax bill represented by taxes for fire protection it was 5.3% even though fire protection districts clearly provide one of the most important emergency services furnished in any community. The property tax burden of fire protection districts is minimal by comparison to other units of government such as education.
- Last, the General Assembly and Governor should take into account the impact of external mandates such as those from IDOL, pension costs, OMA, FOIA, Prevailing Wage, newspaper publication requirements etc. on financial resources of units of government. This was raised and recognized in the Lt. Governor’s report issued pursuant to Executive Order 15-15 by the Local Government Consolidation and Unfunded Mandates Task Force. While lip service has been paid for years to this issue, if any sort of further limitation is to be placed on property taxation, it is critical that this be considered for fire protection districts. By way of example, for years, fire protection districts operating under the requirements of the Property Extension Limitation Law (PTELL) in the Collar, Cook, and many downstate counties have been compelled by the mandate of state law to provide a pension to career firefighters to shift more and more of district property tax funding to meet pension funding requirements under the Pension Code. Other mandates such as legal publication requirements, OSHA compliance, and Life Safety Code enforcement requirements have had a similar impact under PTELL. A statewide property tax freeze or expansion of PTELL will exacerbate this situation for districts already under PTELL and impose it on all other districts with similar effect. While districts do not necessarily disagree with some or all of these mandates, consideration should be given to them in any enactment of further limitations on property taxes.
Note that members of the Illinois Association of Fire Protection Districts (IAFPD) are fire protection districts, not fire departments.
In Illinois, fire protection districts are a different governmental unit than fire departments.
Fire protection districts are a standalone taxing district.
Fire departments are part of a municipality, and thus not a separate taxing district.
If your property tax bill says “fire district” or “fpd” for example, that’s a fire protection district.
Some fire protection districts are pass throughs (not an official word), meaning they don’t have any equipment or employees, rather, they contract with another fire protection district or fire department to provide fire protection.
Fire protection districts and fire departments covering more than 5,000 people are mandated by state law to provide a pension, which outside Chicago, is commonly known as a Downstate Fire pension fund, more officially known as Article 4 – Firefighters’ Pension Fund – Municipalities 500,000 And Under.
Downstate Fire pensions are individual per Fire Protection District or Fire Department.
Meaning, there is not one large Downstate Fire pension fund.
If you see “pension” on your property tax bill, that is an IMRF pension.
Thus Downstate Fire pensions don’t appear on property tax bills as a line item, rather, they are included with the taxing district line item.
Don’t believe there are any exceptions to that; the county clerk’s office is the definitive source for such information.
Some fire protection districts are still volunteer.
In McHenry County, there are many fire departments and fire protection districts, as listed below, followed by whether or not employees participate in a Downstate Fire pension fund, followed by the percent the pension is funded as of 2013.
There is a small chance there could be a dept or district listed as have no downstate fire pension fund yet they participate in an IMRF pension fund; and once again IMRF pensions are line items on property tax bills.
Algonquin-Lake in the Hill Fire Protection District – Has a Downstate Fire Pension Fund, 76% funded.
Cary Fire Protection District – Has a Downstate Fire Pension Fund, 84% funded.
Crystal Lake Fire Department – Has a Downstate Fire Pension Fund, 65% funded.
Crystal Lake Rural Fire Protection District – Does not have a Downstate Fire Pension Fund, has an intergovernmental agreement with Crystal Lake Fire Dept. No full or part time employees.
Fox River Grove Fire Protection District – Has a Downstate Fire Pension fund but no members since no full time sworn firefighters according to district documents, plans are to dissolve this fund. No full time employees, 39 part time employees.
Harvard Community Fire Protection District – Has a Downstate Fire Pension Fund but no longer any participants in this plan either, plans are to dissolve this fund. No full time employees, 55 part-time employees.
Hebron-Alden-Greenwood Fire Protection District – Does not have a Downstate Fire pension fund. No full time employees, 36 part time employees.
Huntley Fire Protection District – Does have a Downstate Fire Pension Fund, 94% funded.
Lakewood Fire Department – Does not have a Downstate Fire Pension Fund, Woodstock provides fire protection service through 2015.
Marengo Fire Protection District – Does not have a Downstate Fire Pension Fund; 1 full time employee; 57 part time paid employees.
McHenry Township Fire Protection District – Has a Downstate Fire Pension Fund, 1,242% funded (2 active members, no retired members). 10 full time employees, 156 part time employees.
Nunda Rural Fire Protection District – Has a Downstate Fire pension fund, but no active or retired members. No full time employees, 50 part time paid employees.
Richmond Township Fire Protection District – Does not have a Downstate Fire Pension Fund. 1 full time employee, 37 part time employees.
Spring Grove Fire Protection District – Does not have a Downstate Fire Pension Fund. No full time employees, 48 part time employees.
Union Fire Protection District – Does not have a Downstate Fire Pension Fund. No full time employees, 27 part time employees.
Wonder Lake Fire Protection District – Does not have a Downstate Fire Pension Fund. No full time employees, 52 part time employees.
Woodstock Fire-Rescue District – Has a Downstate Fire Pension Fund, 55% funded.
Sources of information: Report on the Financial Condition of the Downstate Police and Downstate Fire Pension Funds in Illinois by the Commission on Government Forecasting and Accountability (COGFA), May 2015, data is from 2013; and Illinois Comptroller Warehouse.
The public salary and pension databases such as Better Government Association and Open the Books in general do a poor job of reporting fire department, fire protection district, and police department pay and pensions, often reporting the hourly wage (as opposed to pensionable income) or not reporting the pensions (remember each taxing district has an individual pension fund so a lot of FOIA requests and follow is required to complete the task).
There is a provision of Public Act 96-1495 which begins taking effect in 2016, which, if not modified by the General Assembly, and there is no indication it will be modified, allows Downstate Police and Downstate Fire pension funds to have the State Comptroller divert state funding from the taxing district to the pension fund if contributions don’t meet the parameters in PA 96-1495.
“The Act amends the Code to require that the annual tax be an amount sufficient to fund 90% of the municipality’s pension costs by the end of 2040.”
http://www.tresslerllp.com/pubs/xprPubDetail.aspx?xpST=PubDetail&pub=586
“The portion of State grant funds available for this purpose is limited in 2016 and 2017 as follows:
• In FY 2016, the amount of the delinquent payment up to 1/3 of the total amount of any grants of State Funds to the municipality, and
• In FY 2017, the amount of the delinquent payment up to 2/3 of the total amount of any grants of State Funds to the municipality.
However, in FY 2018 and each year thereafter, all of the State grant funds may be diverted to the
pension fund, up to the amount of the delinquent pension fund contributions.”
http://www.rsnlt.com/clientuploads/documents/CCM_-Pension_Changes_to_Affect_Art._3_Art._4_Pension_Funds_1.4.pdf
http://www.chicagotribune.com/suburbs/oak-park/ct-fire-privatization-north-riverside-tl-0626-20140619-story.html#page=1
Public Act 96-1495 is the same act that created Tier II Downstate Police & Fire pensions, which have reduced benefits for those employees beginning their career on January 1, 2011 or after.
So on the one hand legislators reduced benefits for new fire and police.
On the other hand in the very same PA 96-1495 legislators pretty much forced many municipalities & fire protection districts to contribute more to the pension funds, by setting the formula to fund 90% of the municipality’s pension costs by the end of 2040 with the new law that the state comptroller must take state money allocated to the municipality and divert it to the pension fund if the procedure is not followed.
The problem is many of those pensions are unaffordable at the hiked benefit and salary levels.
Fire and police pension benefit levels were hiked at the state level by elected state politicians.
Salaries were hiked at the local board level by locally elected board politicians.
The result is ever increasing taxes for fire and police at salary and benefit levels that would not be in place if taxpayers had a direct vote on the matter.
Law should be changed so taxpayers approve all collective bargaining agreements.
Law should be changed so any state legislator created pension and retiree healthcare benefit hikes require voter referendum approval.
A state referendum should be held to repeal the pension sentence added to the state constitution in 1971, because the pension sentence forces taxpayers to pay for pensions hiked by the above methods whereas the State Representatives and Senators hike pension benefits, and local board members hike salaries.
The local board members ability to control salaries is hampered by state arbitration and mediation law, where taxpayers ability to pay is not fully considered as the arbitrators look at is there any money in the budget for the hikes and how much are other police and fire departments and fire protection districts paying their employees.
The arbitrators don’t consider taxpayers ability to pay long term for the hiked pensions.
The arbitrators don’t consider taxpayer homes being foreclosed.
The arbitrators don’t consider overall taxpayer burden amongst all local taxing districts, state income taxes, federal income taxes, etc.
The arbitrators don’t consider the amount taxpayers have to repay bonds to the taxing district; some taxing districts run their facilities into the ground by not adequately maintaining them then have a bond referendum for a new facility claiming it’s cheaper to build new then rehab current.
The arbitrators don’t consider ability or desire of taxpayers to pay for non referendum bonds issued by taxing districts, that being bonds issued without voter approval which hike property taxes.
And the list goes on and on.
The political system is skewed and broken and grossly unfair to taxpayers in Illinois.
And PA 96-1495 is part of the broken system.
Below is a summary of the above statistics, ranking McHenry County Fire Protection Districts which has a Downstate Fire Pension Fund with active or retired members, ranked from lowest to highest percentage of funding.
It would take more effort to convert that to a formula which can be applied to an individual property and annual taxes.
Woodstock Fire-Rescue District – 55% funded.
Crystal Lake Fire Department – 65% funded.
Algonquin-Lake in the Hill Fire Protection District – 76% funded.
Cary Fire Protection District – 84% funded.
Huntley Fire Protection District – 94% funded.
McHenry Township Fire Protection District – 1,242% funded (newer fund).
Many fire, police, and public schools have enjoyed generous overall compensation hikes which includes salaries, current benefits, pensions, and retiree healthcare, courtesy of local and state politicians, with the underfunded portion of pensions and retiree healthcare being a future tax hike.
Underfunded = future tax hike.
If the pensions had been fully funded all along, or at least hikes frozen until pensions were fully funded, the overall compensation would have been lower, because the tax caps would not have allowed for all the hikes.
There has been a big compensation hiking spree at taxpayers expense without taxpayer direct approval on the hikes.
People talk of unfunded mandates.
The worst unfunded mandates have been legislative pension benefit hikes by the Illinois General Assembly (State Senators and Representatives) over the last 45 years, which hike the pension.
Since there are 19 pension funds in the Illinois Pension Code, including Downstate Fire, and pension hikes occurred most years from 1971 – 2011 in particular but even to this day, almost all legislators and Governors share blame, some more than others.
A lot of times this was passed off as “no meaningful impact” on pensions.
Well if you have a lot of “no meaningful impact” hikes, they can result in meaningful hikes when all 19 pension funds are lumped together (downstate police and fire mushroom from 2 of the 19 pension funds into over 600 pension funds because they are per taxing district not 2 big funds).
An insidious result of salary hikes has been hiked pensions which are not required to be accounted for at the time of the salary hikes, be it by boards, arbitrators / mediators, or state law.
All of this means something has to give, be it hiked taxes, reduced services, clawing back legislative pension benefit hikes, freezing salaries, furloughs, etc.
One key component would be to to repeal in its entirety the pension sentence added to the state constitution in 1970, because the result of the sentence has been hiked pensions, not better funded pensions.
The pension sentence means that taxpayers are guaranteeing all legislative pension hikes passed by state legislators and Governors that occurred while pensions were already underfunded!
That is indefensible and disgraceful yet occurred over and over and over, 1971 – 2011 and beyond.
Likely the only taxpayer recourse is to repeal that pension sentence and claw back benefit hikes.
The unions simply claim, they employer didn’t make it’s full payment.
How is the employer supposed to make the full payment, if the full payment is not being made, and the legislators repeatedly hike benefits, and employers hike salaries, both requiring hiked benefits.
How is the taxpayer ever supposed to make all those payments (the government employer gets its money from taxpayers).
Impossible.
Can’t be done in it’s entirety of all 19 pension funds in the Illinois Pension Code, it created chaos.
Rewriting a sentence, the fourth sentence from the bottom in the previous post.
How is the government employer supposed to make the required pension contribution to the pension fund if simultaneously in the very same years that the required pension contribution is not made, the legislators pass pension benefit hiking legislation, and the government employers hike salaries, both resulting in hiked pension contributions.
The taxpayers has been placed in an impossible pension contribution situation by elected state and local officials.
And that taxpayer pension contribution is forced on taxpayers by the state constitution.
The state constitution “protects” union members and others in the pension systems, but it does not protect taxpayers.
It’s a Government Employee Pension Protection Clause.
It’s not a Taxpayer Protection Clause.
The pension sentence added to the Illinois State Constitution put the taxpayer at great risk.
Here is the sentence.
“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
That sentence had the potential for politicians, unions, and government employees to abuse taxpayer, and that’s what happened.
Unlimited legislative pension benefit and salary hikes were possible, none of which were required to be directly approved by voters.
The legislative pension benefit hikes, and salary hikes, hiked the pensions.
Each legislative pension benefit hike cannot be diminished or impaired according to the state constitution.
It’s a horrible sentence and 45 years of damage has been done, get rid of the sentence before more damage can be done.
Government employees did not “earn” those legislative pension benefit hikes.
The legislative pension benefit hikes were given to government workers by State Representatives, State Senators, and Governors.
The legislative pension benefit hikes were never approved directly by voters, that would have been a key part to a well worded pension sentence in a state constitution; but a pension sentence has no place in a state constitution; for example there is no pension sentence in the US Constitution.
Legislative pension benefit hike should be approved by voters, but even if such a law is passed, we still have 45 years of damage to unravel.
What else could be done.
Collective bargaining agreements should also be approved by voters.
The union gets to vote on collective bargaining agreements, which contain pay hikes, the taxpayers should also get to vote on collective bargaining agreements, to level the playing field.