My Suburban Life | Tax reform advocate group protests DuPage County stormwater bill

By on August 28, 2013   /   Illinois Press, Press  

TUA’s commentary on a new “rain tax” in DuPage County was featured in an article at My Suburban Life.
dupageraintaxThe president of Taxpayers United of America called upon DuPage County taxpayers Tuesday to protest the possibility of a stormwater utility fee in DuPage County.

TUA President Jim Tobin called the possible fee a “rain tax.”
Tobin’s remarks come about two weeks after Illinois Gov. Pat Quinn signed House Bill 1522, allowing DuPage County to charge property owners a utility fee that would be based on the amount of stormwater displaced by property.
The bill requires a two-year planning and education process before the county can put the fee in place. The fee would require a county board vote.
“This bizarre bill allows ‘stormwater utility fees’ on all properties in DuPage County, including homes, businesses, schools, churches and forest preserves,” Tobin said in a statement. “This could be the largest tax increase in DuPage County history.”
DuPage County Board Chairman Dan Cronin has said the county stormwater fee would be more equitable than the current method of using property taxes to fund stormwater infrastructure, because a fee would be based on the amount of stormwater displaced by a property. The infrastructure improvements would aim to alleviate flooding issues during large rainfalls.
“If you’re a big developer and you put down a large, 50,000-square-feet parking lot of concrete, and you displace a lot of water to your neighbor downstream, you’ll pay more,” Cronin said when the House passed the bill. “If you take steps to install semi-permeable pavers and rain barrels at home, your fee will be a lot less, you’ll get credit for it. It’s the ultimate in responsible behavior policy.”
The county fee would be similar to the fee created by Downers Grove this year for village property owners. While the village of Downers Grove cut property taxes nearly $2 million this year to account for the separate fee, the county has not said whether it would cut property taxes in a similar fashion.
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Chicago Tribune | New law allows DuPage to shrink government

By on August 5, 2013   /   Illinois Press, Press  
Rae Ann McNeilly, Executive Director of Taxpayers United for America, was quoted in the Chicago Tribune on legislation allowing DuPage County to consolidate government.
DuPageCountyHow many government officials does it take to change a light bulb in a subdivision near Naperville?
Too many, according to advocates of streamlined government, who celebrated Gov. Pat Quinn’s signature Friday on legislation that will allow DuPage County to consolidate or eliminate some government entities like the Century Hill Street Lighting District.

“This is the best medicine to take on bureaucracy and excessive, wasteful duplicative government that we’ve had in a long, long time,” Quinn said.
Under the new law, the county will be able to dissolve non-elected government agencies deemed outdated or inefficient following a full analysis and public review process.
And in the case of the unincorporated subdivision just outside Naperville, one of the trustees on the Century Hill Street Lighting District wouldn’t mind being out of a job.
“As a board, we’re entirely welcome to this,” said Tom Cieslak, 70, who has been volunteering as an unpaid trustee since the 1980s. “What happens if I get a heart attack tomorrow and I’m one of two people that know the job?”
The district, which includes about 300 homes, levies about $15,000 in property taxes to service approximately 77 streetlights. Cieslak said that managing the district has grown increasingly burdensome.
“It’s very difficult to maintain a district this small to ensure quality and to keep up with the changing levels of law in terms of ethics rules and Freedom of Information rules,” he said. “There’s more and more training that’s being put on us. There’s very little support in the community.”
In addition to the Century Hill Street Lighting District, about a dozen other entities could be on the chopping block under the new law, including fire protection, sanitary and mosquito abatement districts.
“Frequently we find there’s another unit of government that could do the same thing,” said DuPage County Board Chairman Dan Cronin, who had pushed for the legislation. “Why don’t we just figure out who is going to be the odd man out?”
The narrowly written law currently applies only to DuPage County, which has more than 400 taxing bodies. State officials say they hope DuPage will serve as a model for other counties.
“I believe this has changed the conversation in Springfield, and I think it’s the first step and you’re going to see a lot more of this going on in the entire state,” said Rep. Deb Conroy, D-Villa Park, one of the sponsors of the new law.
Rae Ann McNeilly, executive director of Taxpayers United of America, said she supports the concept of shrinking government, but questions the “top-down method” being employed in DuPage.
“You have county bureaucrats telling the local bureaucrats what they need and don’t need,” she said. “But at first blush, any time we can shrink government, it’s a good thing as long as it doesn’t negatively impact the governed. They should have the say in what occurs — it’s their tax dollars.”
Cronin said his office will analyze each entity individually to determine whether there is the potential to save money and come up with a plan for how those services would still be provided. Residents would be able to weigh in during public hearings and could put together a referendum to fight a proposed dissolution.
Cronin acknowledged consolidation could mean the loss of jobs for some.
“This is not going to be all sunshine and rainbows,” he said. “This is about realizing tangible, measurable cost savings, and as anybody knows in operation of government, personnel is the No. 1 cost.”
Amy Kovacevic, 38, a trustee on the Downers Grove Sanitary District — a position that pays $6,000 a year — said she believes her agency is run efficiently, but believes the county could consolidate other nonessential or outdated governmental bodies.
“As a state, as a county, there are probably ways we can trim,” she said. “Many people are working paycheck to paycheck to pay their bills … and we owe it to the taxpayers.”
Ronald G. Berquist, 83, has served on the Glenbard Fire Protection District board for the past 12 years and has seen the district slowly shrink as the village of Lombard annexes homes and businesses.
Currently, the district levies taxes from about 700 homes and businesses in the unincorporated area near Lombard.
“It’s a paper district,” Berquist said. “We only levy the taxes and we contract our fire and EMS services from Lombard. So a point could be made that there is no point to what we do, but we continue under the statute. We think we perform a duty to the citizens of our district, but if they (county officials) choose to eliminate us, then they would have to take on the responsibility of levying the taxes.”
Berquist and two other board members each are paid $1,000 a year for their service and their duties include approving a budget and tax levy at an annual meeting and hearing complaints from citizens, although Berquist said none has shown up to meetings in recent years.
He said that given the modest expenses the district incurs, it’s unlikely that eliminating the district would save taxpayers any money. And he enjoys the opportunity to work in his community.
“My wife says, ‘Aren’t you too old to do this, why don’t you retire?'” I say, ‘I enjoy doing this.’ If they chose to eliminate my job, so be it. But I’m willing to serve as long as the structure exists.”
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The Globe and Mail | Pension liabilities drive America’s cities to their knees

By on July 25, 2013   /   Illinois Press, Press  

TUA’s study on Chicago police pensions was referenced in an article at The Globe and Mail.
mailandglobeIt turns out Jane Jacobs was wrong. Rationalist urban planners weren’t the worst thing that ever happened to the Great American City. Pension-promising politicians have done far more harm.
That’s clear in newly bankrupt Detroit, which spends 40 cents of every tax dollar on retirement benefits and debt service costs. Is it any wonder the street lights don’t work?
Detroit is admittedly an extreme example, driven to its knees by decades of depopulation and political dysfunction. But its insolvency has drawn attention to the greatest threat to American cities since possibly the Spanish flu: unfunded pension and health liabilities for retired workers.
Short of declaring bankruptcy, it’s nearly impossible for cities to cut contractually protected pension and health benefits. So instead, they’ve been slashing basic services and/or cutting back on new investments in infrastructure, undermining the basis for future prosperity.
Even that hasn’t solved the problem, though. Estimates of the extent to which cities have failed to set aside enough money to pay pension and health benefits vary. But the gap easily amounts to hundreds of billions of dollars. Include state governments and the shortfall is into the trillions.
“Pension liabilities are widely acknowledged to be understated,” Moody’s credit rating agency said this month. It estimates the true shortfall at three times the sums reported by cities.
Last week, Moody’s downgraded Chicago’s credit rating by three full notches. The vibrant Windy City is no Detroit. But benefits for former employees and interest on its debt now suck up a third of its operating budget. And things will only get worse. Moody’s pegged Chicago’s unfunded liabilities at $36-billion (U.S.) – almost twice the $19-billion reported by the city.
Accounting gimmicks are one of the biggest reasons for the discrepancy. Cities have bet on a rate of return on pension investments above 7 per cent, although the yields on government bonds hover around 2 per cent. Not only have cities and states contributed billions less than they should have over the years to fund future pensions, but very few have set aside any money at all to cover retiree health benefits.
It’s no mystery how most U.S. cities and states got into this mess. For decades, politicians bought labour peace by promising higher pay and benefits for public employees without thinking twice about how to pay for them. Most knew it would become someone else’s problem anyway.
Whether public employees deserve their pensions is beside the point. (While the pensions of Detroit workers appear reasonable, they also reflect that city’s lower cost of living.) Still, politicians shirked their fiduciary responsibility for the financial integrity of their cities.
In Chicago, the average police pension is $55,000. For firefighters, it’s upward of $60,000. In 2011, 94 former Chicago police officers had pensions above $100,000, according to Taxpayers United of America. What’s more, unlike their peers in many other cities, retired Chicago police also receive partial federal Social Security benefits, up to about $13,000 a year.
Since police, firefighters and teachers typically retire in their 50s, many will draw pension and health benefits for three decades or more. That is, unless other cities follow Detroit, which is asking a bankruptcy judge to let it slash pensions. If Detroit gets its way, it will set a precedent other large cities may try to follow. Until now, all they’ve been able to do is squeeze concessions from unions that affect only new employees, who will retire later and contribute more to their pension fund. And in most cases, police and firefighters have been exempt from the changes.
The greatest reckoning may come in California. The state has already seen smaller cities such as Vallejo, Stockton and San Bernardino declare bankruptcy. Last year, almost 15,000 former California public employees drew pensions of more than $100,000. And the $100K club is adding thousands of new members a year as baby boomer retirements pick up steam.
Public pensioners can be expected to put up a fight wherever officials seek to cut their benefits. But it would be hard to top the sheer nerve of Bruce Malkenhorst, the former city manager of the Los Angeles-area industrial enclave of Vernon (population 112). His 2012 pension was $540,000, until the California Public Employees’ Retirement System cut it to $115,000.
Mr. Malkenhorst, 78, who has been convicted of misappropriating public funds, is now suing to recoup the difference, citing “elder abuse.” It does make one read Jane Jacobs and weep.

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