Lake in the Hills approves over 9% hike to police pension levy

The village will dedicate an estimated $1.5 million dollars to its police pension fund in 2019 – 9.17% more than it paid last year.

Lake in the Hills is the latest municipality in Illinois to confront growing pension costs, which could mean higher property tax bills for some village residents.

On July 25, the Lake in the Hills Village Board approved a $1.5 million request from the village’s police pension fund for the 2019 levy year, according to the Northwest Herald, amounting to a 9.17% increase from the previous year.

The request for the increase was driven largely by the fund’s lower-than-expected investment returns in fiscal year 2018, according to the Herald.

Last year’s levy request was $1.37 million, up only 0.14% from fiscal year 2017. An independent actuary contracted by both the village and police pension boards determined this year’s levy amount.

A higher police pension levy could affect property taxes in the village. Since the police pension fund itself doesn’t levy a property tax, increased spending on police pensions may require an increase in the village’s property tax levy, which could translate to higher property tax bills for some homeowners.

The village’s police pension board came under fire from taxpayers in 2018 when former Deputy Police Chief Alan Bokowski was allowed to keep his $84,000 annual pension, despite being sentenced to more than four years in prison for sexually assaulting a minor.

Lake in the Hills is not the only community seeing a growing share of public resources captured by pensions. Cities such as Harvey, Rockford and Norridge have all been forced to either hike property taxes or make painful budget cuts ­– or both – to accommodate rising pension demands.

Fortunately, Lake in the Hills has not reached that point yet. But other Illinois communities have seen firsthand where a pension problem can lead, if left unaddressed.

Pension pressure

Illinois state and local governments spend more on pensions as a percentage of revenue than any other state – and nearly double the national average. Under state law, Illinois pension funds must achieve 90% funding by 2045.

In 2018, a $6 million budget shortfall driven by pensions forced Peoria to cut local police and fire department jobs, despite the fact that 85% of the city’s property tax revenues had already been going directly to pensions.

North suburban Highland Park raised its property tax levy by nearly $1 million in December to pay for pensions.

Lawmakers in Springfield must take action to address the pension crisis. By amending the state constitution to protect earned benefits, but allow for changes in future benefit accruals, state lawmakers could pass a pension reform package that reduces annual pension contributions and fully funds the pension systems faster than planned under current law. This plan would enable state and local governments to honor promises made to both retirees and current workers – and protect taxpayers from future tax hikes.

While Lake in the Hills does not face a crisis as severe as that of other communities, the latest levy increase should alert local taxpayers and government workers to the risks posed by an unaffordable pension system.