State lawmakers in Springfield are scheduled to discuss some of their options Thursday for tackling local governments' pension costs.
They're unlikely to reach any decision at the committee hearing. But preliminary, public talks there, along with meetings of a task force set up by Gov. JB Pritzker, may set the stage for future action.
Doing so is critical, said Peoria Mayor Jim Ardis, who spoke to Illinois Chamber of Commerce members Wednesday about the topic in Springfield. He called it the top issue for the Illinois Municipal League, "because it affects every one of the communities in the state that have police and fire departments."
Costs of pension contributions from local governments have been continuing to rise as each tries to hit a point of having their individual pension systems 90 percent funded within the next two decades.
At the end of 2017 that equated to some $11.1 billion of unfunded liability, according to IML documents. And in Peoria, it's $273 million of unfunded liability. The city's required contribution in 2018 was $21.7 million.
Municipal leaders have been pushing for a consolidation of pension systems, moving away from a model in which individual communities operate police and fire pensions, arguing that larger, unified systems generate better rates of return. Many recipients have expressed concerns about losing local control of investments as well as benefit administration, and have other worries about potential consolidation costs.
Both Ardis and a key Pritzker administration official say they see a change in tone now, with statewide police and fire organizations more open to exploring options for change.
"We're getting to the point where even police and fire recognize that they're in deep trouble," Deputy Gov. Dan Hynes said during a meeting earlier this month with the Journal Star editorial board.
He's the point man on the topic for the administration, and the task force he's working with has Fraternal Order of Police and Associated Firefighters of Illinois members, as well as former government officials and reform advocates.
Hynes, a former state comptroller, said that he thought members agreed that some action needed to be taken.
"I think everybody knows the status quo is not going to work, and everybody acknowledges the way the money is being invested right now is just absurd," he said, also noting that early discussions included assuaging concerns over costs of any consolidation.
"There are some investment vehicles that might have to be traded, but most of them just could be transferred in (to a larger, unified system)," he said. Communities would still have "individual accounts" with a larger fund, if leaders reach an agreement to go that route. .
Hynes and the task force set a preliminary, July 31 date to have their recommendations for action completed.
Pritzker said he felt it was important for the group to be deliberate in its work and find unity.
"We specifically didn't want to have some forced endeavor where there's some legislation in May that there's got to be quick action on," he said in the same editorial board meeting. "I think there's got to be consensus."
That likely means little or no immediate action on the bevy of bills, from fully consolidating police and fire pensions to making smaller tweaks in investment protocols, that have been introduced in the Legislature.
But with what's out there, Ardis said, the stage has been set by lawmakers like Rep. Ryan Spain, R-Peoria, who introduced a number of those bills, for action to be taken.
"They put a lot of options up there, so it's not just one take it or leave it (choice)," he said. "We just want to compromise and work together to get this."
Ardis said he'd like to see action of some kind, and soon, calling the increasing contribution costs the "biggest financial horse collar for every community in the state" and questioning why resolving that problem this year was less time-sensitive than other legislative priorities.
But he also gave credit that Pritzker's team is "going to look harder at it than any administration has in the last 20 years."
Pritzker also noted said that some local decisions on pensions don't necessarily require legislation, and argued that in some cases local entities could act on their own to streamline operations while panel members work on agreeing to legislative solutions.