December 7, 2016
(CHICAGO) In an analysis released today, the Civic Federation announced its support for the Chicago Park District’s proposed FY2017 operating budget of $449.4 million. The budget continues to reduce the District’s reliance on fund balance to close its budget deficits and keeps the property tax levy relatively flat. The full 61-page analysis is here.
As detailed in the analysis, the Federation supports the District’s efforts to maintain a high level of fund balance, reduce its reliance on previous year fund balance and prudently manage its debt profile, among other initiatives. The District has proposed moderate revenue enhancements to stabilize its short-term finances. The Federation finds these to be reasonable when balanced with the aforementioned long-term stabilization efforts as well as better management of healthcare expenses, utility conservation measures and ongoing work toward finding a settlement of pension reform litigation with its partners in labor.
“At a time of increased pressure for local governments across Illinois, the Chicago Park District’s sensible financial plan furthers the District’s long-term goals while showing restraint on the property tax levy,” said Civic Federation President Laurence Msall. “However, the Federation remains concerned about the uncertainty surrounding the pension fund’s fiscal sustainability in light of recent Illinois Supreme Court decisions striking down similar pension reform legislation for the City of Chicago and State of Illinois.”
The Civic Federation strongly supported the District’s previous work with unions, the Illinois General Assembly and then-Governor Quinn to enact comprehensive pension reform legislation in 2014. However, in October 2015, a lawsuit was filed in Cook County Circuit Court challenging the reforms. An October 2016 court order cancels a scheduled increase in the employer and employee contributions and reinstates retiree automatic annual annuity increases, but does not yet rule the reforms unconstitutional. While this provides temporary budget relief to the District and taxpayers in 2017, the long-term solvency of the fund will be in jeopardy if the scheduled increase is not restored or if the reforms are ruled unconstitutional.
Of additional concern to the Federation is the effect of the ongoing state budget impasse on District capital projects. Non-recurring revenues, the use of which has been reduced from previous years, are still being used to bolster the District’s budget.
The Federation recommends that the District study a consolidation of its pension fund with the Illinois Municipal Retirement Fund, consider funding pensions at an actuarial level rather than by a multiplier, implement a formal long-term financial plan, improve the detail of the budget book, and incorporate the Illinois International Port District’s Harborside Golf Center into the master plan for Big Marsh Bike Park.