Taxes: August 2008 Archives

A two-part series beginning in Sunday's Sun explores pensions for public-sector employees. Part I delves into city pensions: how pensions for police officers, firefighters, public works employees and others are funded. A typical 30-year veteran of a municipality these days can expect to collect about $72,000 a year for the rest of his life. And often that person will be in his 50s when he retires.

Part II explains how the burden for funding teacher pensions falls mainly on the state. Still, the income and sales taxes you pay are expected to pay for these comfortable retirement plans.

These days, it's hard to find comparable benefits packages in the private sector, where 401(k) and similar programs designed to help individuals supplement expected Social Security incomes are the norm. Employers often make a modest match, but nothing like the 9 or 10 percent matches that municipalities and school districts kick in.

Given the state's financial situation, it's clear that pension reform is needed. Match amounts are determined by state law. Yet lawmakers seem to lack the political will to even consider reform, what with the clout wielded by unions.

How do we fix this problem? How do we even start? Or, do you even agree that there is a problem? Maybe you think the current pension systems are fair and sustainable, that it will always be the responsibility of taxpayers to fund these programs. It seems unlikely that any proposal to reduce pensions would ever pass--it would be political suicide for any politician to support that.

OK, then, here's a thought: If state law forces local taxpayers to pay for these generous $6,000-a-month retirement plans, what about getting the state or federal government to increase income taxes on those who collect public-sector pensions? Then the recipients at least would have to kick back enough until a fair balance is reached.

What other thoughts or ideas about public-sector pensions do you want to share?

Naperville Township trustees did something unusual Tuesday night. They voted to drastically cut salaries for elected officials. The town supervisor's pay, for example, is being slashed in half to $45,000 from $89,000. The town clerk's salary is being cut to $32,000 from $40,000.

These cuts bring Naperville in line with the compensation afforded other township officials in DuPage County.

However, the cuts did not come without a fight. One trustee, Fred Spitzzeri, verbally attacked another, Gary Vician. Spitzzeri called Vician a hypocrite, since Vician voted for pay raises four years ago. Vician said the plan four years ago was to justify the raises because staff cuts were planned, but those savings were never fully realized, Paige Winfiled reports in The Sun.

What do you make of all this? Does the township board deserve praise for acting responsibly and reducing salaries? Or should it be qualified praise, since the board was correcting irresponsible past actions that inflated salaries in the first place? Or should the board be outright criticized for not doing enough to cut costs?

Boy, some could say there's a leadership vacuum in Naperville. We've been without a city manager since December and the city council seems in no hurry to fill the position. We currently don't have a fire chief. Our Park District executive director is on leave for reasons unknown. And now the schools superintendent is stepping down.

What do think is a better way to fill these positions: to promote from within, or to look outside the city for the best candidate? The trend nowadays is to conduct national searches. But that doesn't always produce the best selection, and it isn't always the best situation for taxpayers. Consider those school superintendents, park directors and city managers who can get fully vested in a very generous pension plan in one state, then a few years later accept a job in another state and before long become eligible to collect another full pension. What a country!

Tell us what you think. Is it better to do a national search, or to promote from within?