On the issue of the growing Pension Crisis in Morton Grove, and the need for a responsible plan to address it
ISSUE: The Action Party states “we contribute more towards our pension obligations than the minimum payment required by law,” on their FAQ page of their website and in an article on Patch by Trustee Witcko (posted February 25, 2017).
This appears to be the Action Party’s plan for addressing the growing pension crisis in Morton Grove… pay more the minimum payment. But they have not addressed the growing debt obligation that is outpacing their payment plan. It’s like credit card debt, if you pay just about the minimum each month, but continue to charge purchases on your card, your credit debt will continue to grow. That is not responsible financial management.
That is exactly what is happening in Morton Grove. Between 2013 and 2016, our pension obligation increased from $135 million to almost $160 million. Yet the Village can only fund 41% of that pension obligation, a decrease from 47% in 2013. Meanwhile, the Village keeps spending money, the amount the Village owes in debt, such as General Obligation bonds and other loans, increased from about $25 million in 2013 to over $52 million in 2016.* So, we pay just about the minimum balance due, but keep using our “credit card” by spending money, and the Village’s debt and pension obligation grows. (*all this information can be found on your property tax bill)
Not only does this plan of “pay the minimum and keep spending” increase our debt obligation, it also has an impact our bond credit rating. Our rating had been upgraded in 2011. Then, Dan DiMaria and his New Action Party took office in 2013 and put their plan in place. The result is that our village bond rating has been lowered TWICE during DiMaria’s administration, and now stands at A1 (as noted by Moody’s Investor Services in January 2016). A lower bond credit rating means our Village pays higher interest when we issue bonds for things such as infrastructure improvements. Growing debt, low credit rating, and high interest rates prevent the Village from achieving the economic growth and vitality we all want and deserve.
The Action Party says they have a plan to address the pension crisis, but clearly their plan is not working. Paying just above the minimum satisfies the legal requirements, but it is not working for our Village, it so the Village’s debt grows. If this is the best they can do, their best is NOT good enough, and we need a new plan.
The Independent Candidates will implement a new plan for Morton Grove that addresses not only the amount of money paid toward the debt, but also addresses the spending side of the equation so the debt won’t continue to increase at this rate. They believe strongly that responsible financial management to ensure a solid economic foundation is essential to the future of our Village, and is the only way we can grow and thrive as a community.