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Wed February 26, 2014
Springfield Pension Problem Worst in State According to Think-Tank
A conservative think tank recommends the City of Springfield switch its employee pension system to a 401K style plan rather than a defined benefit.
"First and foremost you need to make sure the data is pure." -- Budget Director William McCarty
The Illinois Policy Institute presented aldermen data that indicate the city of Springfield has the worst funded pension system among larger cities in the state.
But the presentation failed to sway many city leaders. Alderman Doris Turner, who is also Chair of the Sangamon County Democrat Party, wondered if the group tailored its data to reach a certain conclusion.
“Every study that I see that comes from you always reaches the same conclusion that we need to move to a 401K style pension system," Turner said. "It leads me to wonder ‘is that your conclusion? And are you doing those studies to reach that conclusion?’”
Mayor Michael Houston said the city’s pension problem was not created overnight and he says it won’t get solved overnight. He said if citizens want more money in pensions, then he has to remove dollars from other city services.
The city's budget director, Bill McCarty, questioned the accuracy of the group's report.
McCarty said the group didn't consider city's property tax rate hasn't gone up in 30 years. If the rate were the same as a nearby municipality, McCarty told the council, that could generate more revenue.
“We’d have an extra 5 to 6 million dollars a year that we could put toward pensions, but we don’t have that. So, there are a lot of variables that are at play when you start looking at comparables and you start ranking entities. But first and foremost you need to make sure the data is pure. And in this study the data is not pure,” McCarty said.