Peoria Illinois Creates New Property Tax Devoted To Pension Shortage
This ARTICLE On Peoria Illinois Creates New Property Tax Devoted To Pension Shortage Was PUBLISHED On September 25th, 2019
It is no news to Illinois taxpayers that new Governor JB Pritzker is raising taxes in everything he can think of in Illinois.
- Most cities and counties in Illinois is facing a financial crisis
- Property taxes are increasing in most townships
- In a recent study, DuPage County home prices depreciated 24% since the 2008 Recession while property taxes increased by 7%
- Illinois has the second-highest property tax rates in the country
- Illinois is just trailing behind New Jersey as the highest property tax state
- Many Illinoians thought that things will be different from the election of JB Pritzker
- Unfortunately, many Illinoians now have voter remorse by electing the new governor
- The governor’s main solution to solve the financial crisis in Illinois is increasing taxes on everything he can think of without cutting spending
- He recently doubled the state’s gas tax which went into effect in July
- To top of the financial crisis, Pritzker approved Illinois lawmaker’s salary increase
- It just seems that Illinois elected an incompetent governor who has no clue and experience in running state government
- While Illinois is struggling and incurring debt as time passes, many states like Florida are raking in billions by managing the state like a business with low state taxes to attract new residents
In this article, we will cover and discuss Peoria Illinois Creates New Property Tax Devoted To Pension Shortage.
Reason Peoria Illinois Creates New Property Tax
No matter the types of taxes they increase, the City of Peoria in Illinois has a huge budget shortfall to cover its pension programs.
- The city’s police and fire pension is in a financial crisis
- Lawmakers decided for Peoria Illinois Creates New Property Tax Devoted To Pension Shortage
- This new property tax for homeowners will take effect in October 2019
By doing so, the city of Peoria may meet its public safety pension obligations which are due by the end of 2019.
The City Of Peoria Needs To Meet Pension Shortfall Before Year’s End
Peoria Illinois faces a shortfall of the public safety pension fund.
- The city needs an additional $1.2 million by the end of 2019 to properly fund the city’s public safety pension fund
- The city’s police and fire pension fund for retired police officers and firefighters are increasing 11% annually
The pension fund is the city’s biggest and fastest-growing annual expense.
How Peoria Illinois Additional Property Tax Works
The new Peoria Illinois Property Tax to fund the public safety pension shortfall was set up as a short term emergency funding fee.
- The amount taxpayers pay is dependent on the value and size of their homes
- The new property tax fee is supposed to last for a period of three-years
After three years, the city will re-evaluate its financial situation and can decide to eliminate the extra tax and/or continue it for a longer-term.
Pension Shortage Crisis In Illinois
The state of Illinois is not doing well financially.
- There are countless cities like Peoria that are facing bankruptcy due to pension fund shortfalls
- There is no doubt there needs to be pension reform
- There is no doubt that many politicians including the newly elected JB Pritzker are not experienced nor qualified running a government and/or business that is operating in the red. Illinois is a great state
- However, new competent management has been badly needed
- It is not how much you make but what you spend
- Under JB Pritzker’s Administration, this is not what is happening. Pritzker thinks increasing taxes is the solution to fixing the financial mess the state is in
- He is increasing taxes on everything he can think of PLUS he is increasing spending
- Giving Illinois lawmakers a raise when the state is in the red is not a good business decision
In the meantime, countless of Illinoisans are fleeing the state to other lower-taxed states.
Pension Costs Keep On Increasing Year After Year
There definitely needs to be pension reform in Illinois.
- Other states like Tennessee, Florida, Kentucky, Mississippi, Ohio, Alabama, North Carolina, Georgia, Texas are thriving and raking in billions in revenues with major surplus in their budget
- The main reason for this is because their pensions are well funded
- Illinois’s biggest problem is the negative pension fund
No matter how much taxes you raise in Illinois, you will never break even in their police and fire pensions.
Let’s Take A Case Scenario Why Illinois Can Go Bankrupt
The City of Peoria has seen the costs of their pensions double to $20 million from $10 million in the past 10 years. Peoria residents are paying 95% of every property tax dollar they pay for the negative funding in the police pension. The 95% is supposed to increase to 100% by mid-2020. The shortfall crisis forced the city to cut 38 police officers and firefighters in 2018. Recent data showed that 85% of the property tax revenue of the city goes to pensions. Springfield, the capital of Illinois has a $269 million shortfall in their police and fire pension. The pension shortfalls are continuing to spread with no light at the end of the tunnel throughout the state of Illinois. This is a developing story on Gustan Cho Associates Mortgage News. We will keep our viewers updated as things change.