Putting together DeKalb’s pension picture has been like a forestry hide-and-seek. Facts are the trees and while facts have been examined, there’s often an underlying feeling that the ecosystem has not yet been adequately described. So I keep going back in.
One “specimen” whose significance I failed to fully appreciate earlier is the shortfall between what is collected in city property taxes and the annual required contributions to the three pension funds. Unlike the State of Illinois, DeKalb faithfully makes yearly contributions; and if the property taxes don’t cover them, the city must free up additional revenues from the General Fund.
So far, such shortages appear to have fallen exclusively on IMRF and below is a piece of that picture.
The growing shortages are alarming, but of course the larger story here has turned out to be the fantastical growth of the annual required contribution. In FY2004 — the year of the IMRF Early Retirement Incentive — the contribution jumped some 940%, then 35% the following year and 30% the year after that.
Another way to get from $54,000 to $1.2 million in annual contributions over a decade’s time is to take the initial $54,000 and increase it by 36.5% every single year.
Property tax revenues make up about 14% of General Fund budget revenues. This share has crept up from the 11%-12% range since the start of the Great Recession and now we find out that other operating revenues are going to the pension funds lately, too.
Are there ways to slow the galloping growth of the contributions? What if DeKalb wants to work another Early Retirement Incentive, which it may soon be qualified to do again?
Sources: City of DeKalb Comprehensive Annual Financial Reports (CAFRs) and DeKalb County tax information.