Proposed Pension Fix Could Take Lemont Tax Dollars

Lemont officials are speaking out against a proposal by House Speaker Michael Madigan (D-Chicago) to divert billions of dollars from local taxing bodies to the massively underfunded Teachers' Retirement System.

Madigan added three amendments to House Bill 3637 on Friday, which would allow the state to tap into the Corporate Personal Property Replacement Tax to help cover teacher pensions.

Under the proposal, local governments—including municipalities, schools, libraries and park districts—could lose as much as $1.4 billion from the CPPRT, a 2.5 percent tax on corporations that is collected by the state and earmarked for local governments.

"Diversions of the magnitude proposed within the amendments would be crippling to local governments," said Joe McCoy, legislative director of the Illinois Municipal League.

Madigan's proposal is one of many recommendations by state legislators to address Illinois' $83 billion unfunded pension liability—$44 billion of which is TRS.

On Monday night, Lemont Mayor Brian Reaves said the plan would severely impact the ability of local governments to provide services to their constituents.

"It's one more way that Speaker Madigan has found to take money from individuals and funds that have been operational for years," he said. "There's no way for municipalities who are not homerule to make up the difference."

Lemont taxing bodies received the following CPPRT disbursements between July 2010 and June 2011, according to the Illinois Department of Revenue:

• : $34,252.21
• : $19,207.06
• : $66,224.42
• : $210,390.94
• : $347,848.43
• : $398,911.41
• Lemont Township Road and Bridge: $20,571.45

Lemont school officials also voiced opposition to Madigan's plan.

"Like the potential shift of the state's responsibility of TRS pension payments to local school districts, Speaker Madigan's proposal would have a negative impact on school districts across the state, including Lemont High School District 210," said Tony Hamilton, director of school and community relations for District 210. "Over the past three years, we've been allotted an average of more than $350,000 annually. That revenue is important to District 210, as it is to school districts and other government entities across the state."

District 113A Interim Superintendent Robert Madonia said the proposal unfairly impacts school districts with a corporate and commercial base, which Lemont has. The district "cannot afford to lose CPPRT revenue."

"We can not afford to lose this revenue," he said. "We are coming out of fiscal challenges and this would hurt that recovery. Any loss of this type of money at the local level would have to either be reimbursed back to the district through a tax increase or the districts would again have to face program and staff cuts which would negatively impact children. This is money generated from our community and it should stay within our community."

Reaves said he has already written letters to State Rep. Jim Durkin (R-Western Springs) and Senate Minority Leader Christine Radogno (R-Lemont) regarding the proposal, and urged residents to do the same.

An Illinois House panel is scheduled to discuss Madigan's proposals during a hearing Wednesday afternoon. The state's budget deadline is May 31.

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