Harvey, Illinois’ layoffs to pay for pensions portends nasty future for the rest of state

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Harvey, Illinois' layoffs to pay for pensions portends nasty future for the rest of state

By John Ruberry

For decades Illi­nois, Chicago, and many other Land of Lin­coln munic­i­pal­i­ties have been kick­ing the can down the road in regards to pub­lic worker pen­sion obligations.

Har­vey, a poverty-​stricken south­ern sub­urb of Chicago with a long his­tory of cor­rup­tion, has not just reached the end of the road, it has run off of the cliff, in the man­ner of Wile E. Coy­ote. Because Har­vey has not been ade­quately fund­ing its police and fire pen­sion plans for years, a state law–Illi­nois iron­i­cally is guilty of the same sin with its pen­sions–requires the state trea­surer to with­hold the city’s por­tion of sales tax rev­enue, $1.4 mil­lion, to pay into those funds instead of that cash being deposited into the town’s gen­eral rev­enue account. Harvey’s police and fire pen­sions are funded at only 51 and 22 per­cent, respectively.

On Fri­day Har­vey laid off half of the employ­ees in its police and fire depart­ments, along with about a dozen other munic­i­pal workers.

Iron­i­cally two fire­fight­ers with 18 years on the job were among those given pink slips, they are two years away from qual­i­fy­ing for their own pensions.

Har­vey has had many other brushes with malfea­sance, and like Wile E, it has used a bag of tricks from its own ver­sion of the Acme Cor­po­ra­tion to remain air­borne. It pur­chased Lake Michi­gan water from Chicago, resold it to neigh­bor­ing towns and used that rev­enue for pay­roll and other expenses. Until Chicago sued Har­vey didn’t pay the larger city for that water. Its four-​term mayor, Eric J. Kel­logg, was fined $10,000 and banned from par­tic­i­pat­ing in future bond offer­ings after Har­vey diverted cash from a hotel devel­op­ment plan to other items, includ­ing payroll.

The FBI, accord­ing to the Chicago Tri­bune, is inves­ti­gat­ing bribery alle­ga­tions involv­ing a con­sul­tant of Kel­logg, the for­mer mayor of neigh­bor­ing Dix­moor who is a twice-​convicted felon. The case is cen­tered on secret record­ings made by Harvey’s comp­trol­ler, who com­mit­ted sui­cide in 2016, the same year that Fox Chicago, cit­ing reports from experts, said the city is “worse than broke.”

[cap­tion id=“attachment_106672” align=“alignleft” width=“300”] Aban­doned fac­tory on the Harvey-​Dixmoor border[/caption]

Ah, it’s easy to dis­miss Har­vey as an aber­ra­tion even in a state with a national rep­u­ta­tion for cor­rup­tion. In my life­time four Illi­nois gov­er­nors have been sent to fed­eral prison and a fifth faced trial for tax eva­sion but was found not guilty.

Pen­sion trou­bles such as the one Har­vey is fac­ing can’t come to my Prairie State town, can they?

They sure can.

A researcher from the Uni­ver­sity of Chicago says there are 74 other police or fire depart­ments with pen­sion funds that are com­pa­ra­bly under­funded as those of Har­vey. One of those towns in that predica­ment is Niles, the vil­lage west of the Chicago sub­urb where I live. I have some friends who reside there and they pride them­selves on their low – well, low for Illi­nois – prop­erty taxes.

Niles is one of those 74 towns. In 2010 its mayor for nearly five decades served a year in prison for his role in a kick­back scheme.

Term lim­its anyone?

Which Illi­nois munic­i­pal­ity will be the next Har­vey? Per­haps Chicago, as its pen­sion plans are the worst-​funded among the nation’s largest cities.

As for Illi­nois, its pen­sion funds are among the worst-​funded among the fifty states.

[cap­tion id=“attachment_106667” align=“alignright” width=“300”] Blog­ger in Harvey[/caption]

Har­vey is los­ing population.

Chicago is los­ing population.

Illi­nois is los­ing population.

Who will be the “last man stand­ing” over the edge of the cliff stuck with the bill?

John Ruberry, a fifth-​generation Illi­noisan, con­tin­ues to eye his exit strat­egy while he blogs at Marathon Pun­dit.

By John Ruberry

For decades Illinois, Chicago, and many other Land of Lincoln municipalities have been kicking the can down the road in regards to public worker pension obligations.

Harvey, a poverty-stricken southern suburb of Chicago with a long history of corruption, has not just reached the end of the road, it has run off of the cliff, in the manner of Wile E. Coyote. Because Harvey has not been adequately funding its police and fire pension plans for years, a state law–Illinois ironically is guilty of the same sin with its pensions–requires the state treasurer to withhold the city’s portion of sales tax revenue, $1.4 million, to pay into those funds instead of that cash being deposited into the town’s general revenue account. Harvey’s police and fire pensions are funded at only 51 and 22 percent, respectively.

On Friday Harvey laid off half of the employees in its police and fire departments, along with about a dozen other municipal workers.

Ironically two firefighters with 18 years on the job were among those given pink slips, they are two years away from qualifying for their own pensions.

Harvey has had many other brushes with malfeasance, and like Wile E, it has used a bag of tricks from its own version of the Acme Corporation to remain airborne. It purchased Lake Michigan water from Chicago, resold it to neighboring towns and used that revenue for payroll and other expenses. Until Chicago sued Harvey didn’t pay the larger city for that water. Its four-term mayor, Eric J. Kellogg, was fined $10,000 and banned from participating in future bond offerings after Harvey diverted cash from a hotel development plan to other items, including payroll.

The FBI, according to the Chicago Tribune, is investigating bribery allegations involving a consultant of Kellogg, the former mayor of neighboring Dixmoor who is a twice-convicted felon. The case is centered on secret recordings made by Harvey’s comptroller, who committed suicide in 2016, the same year that Fox Chicago, citing reports from experts, said the city is “worse than broke.”

Abandoned factory on the Harvey-Dixmoor border

Ah, it’s easy to dismiss Harvey as an aberration even in a state with a national reputation for corruption. In my lifetime four Illinois governors have been sent to federal prison and a fifth faced trial for tax evasion but was found not guilty.

Pension troubles such as the one Harvey is facing can’t come to my Prairie State town, can they?

They sure can.

A researcher from the University of Chicago says there are 74 other police or fire departments with pension funds that are comparably underfunded as those of Harvey. One of those towns in that predicament is Niles, the village west of the Chicago suburb where I live. I have some friends who reside there and they pride themselves on their low–well, low for Illinois–property taxes.

Niles is one of those 74 towns. In 2010 its mayor for nearly five decades served a year in prison for his role in a kickback scheme.

Term limits anyone?

Which Illinois municipality will be the next Harvey? Perhaps Chicago, as its pension plans are the worst-funded among the nation’s largest cities.

As for Illinois, its pension funds are among the worst-funded among the fifty states.

Blogger in Harvey

Harvey is losing population.

Chicago is losing population.

Illinois is losing population.

Who will be the “last man standing” over the edge of the cliff stuck with the bill?

John Ruberry, a fifth-generation Illinoisan, continues to eye his exit strategy while he blogs at Marathon Pundit.