It long was a pillar of faith in North Riverside that sales taxes would pay all the bills. And it wouldn’t just pay for police and fire protection and public works. It would pay residents’ water bills and waste hauling bills. It would allow the village to hand out free vehicle stickers. It would allow the village to never hike the property tax levy.
The message to residents — it’s still the message, judging by comments residents have made in the wake of recent hikes to water bills — was that sales taxes would provide a free ride.
Along with the obvious boon to residents, village employees also shared in the sales tax bonanza. The paid-on-call fire department was switched over to a full-time, later unionized department. The police department, due to the commercial institutions that provide the sales tax base, is staffed at a much higher level than your average village of 6,000 people.
With those bulked up public safety departments came the commensurate salaries and pensions. And still the village wasn’t done.
The village would also provide its employees with cheap health insurance for retirees and their spouses for the rest of their lives — an enormous burden that creaked as the pension obligations and costs to run village departments continued to rise.
It wasn’t until the economy collapsed in 2008, with the village teetering on financial ruin (it had to take out a $2 million loan to pay its bills) that any of that longstanding narrative of sales taxes supremacy began to erode.
Now residents and some employees are being asked to share the pain. Water and waste hauling are no longer subsidized, with the result that residents are seeing their water bills jump by hundreds of dollars a year. There has also been talk of asking residents to approve a tax referendum to fund police pension obligations. The fire department is threatened with privatization to get out from under the pension burden.
But no one is talking about that lifetime health insurance perk, which is available to an exclusive club of about 120 people and comes at an enormous cost to the village.
If residents and firefighters are being asked to sacrifice, then it’s fair to ask why others aren’t. The post-retirement health insurance obligation into the future, according to the village’s actuary in 2013, was $27 million. From 2010 to 2013 the village pumped more than $2 million of general operating funds into that plan to pay for it.
And that just a fraction of what the village’s actuarial obligation is to that plan on an annual basis. In 2012, the annual cost to operate that plan was, according to the village’s financial audit, $2.2 million.
If the village’s pension burden is untenable, what does that make this wholly voluntary insurance plan? If North Riverside is serious about getting out from under obligations, post-retirement health insurance would seem to be the place to start.
The perk needs to be immediately modified and quickly phased out. Yes, that will come at a cost to the roughly 120 people who are or will be scheduled to benefit from it. But that benefit is coming at the expense of 6,000 other people, and that just doesn’t seem to be a very fair equation.