Illinois House Bill HB2870

Illinois 2023-2024 Regular Session

• Introduced: 2/16/23
• Refer: 2/28/23
• Refer: 2/16/23
• Report Pass: 3/9/23
• Refer: 3/27/23

Caption

PEN CD-COOK COUNTY-FUNDING

Impact

The legislation will impose significant changes to how pension funding is managed in Cook County. Beginning in 2025 and extending through 2055, the bill stipulates that the County's required contributions are to be derived through a detailed formula. This formula will require annual adjustments to meet fiscal conditions, ensuring that contributions reflect the county's pension obligations accurately. Additionally, the County is granted flexibility in its funding mechanisms, allowing it to utilize other legally available funds in place of or alongside the property tax levy, which could lead to more strategic financial planning.

Summary

House Bill 2870 seeks to amend the Illinois Pension Code specifically regarding pension funding in Cook County. It introduces a requirement for the County to levy an annual tax on all taxable property within its borders starting in the levy year 2024. The intent of this tax is to ensure that the county produces sufficient revenue to cover its total required contribution to the pension fund for public employees for the following payment year. The bill establishes a structured approach to calculating these contributions, accounting for factors like projected normal costs, unfunded accrued liability, and other expenses, thereby creating more transparency and predictability in pension funding.

Contention

House Bill 2870 has sparked discussions about its implications for local governance and fiscal responsibility. A point of contention lies in the provision that mandates the implementation of the bill without reimbursement from the state, as stated in amendments to the State Mandates Act. Critics argue that this could impose undue financial burdens on counties already grappling with resource constraints. Supporters, however, contend that the bill is a necessary step towards ensuring that pension obligations are met systematically, potentially reducing the risk of shortfalls that could jeopardize employee benefits in the future.