Press

Chicago Tribune|Retiring Arlington Heights park district director gets salary spike in final years of service

Jared Labell, Executive Director of Taxpayers United of America, was quoted on the recent release of 10th annual Illinois State Pensions Report by Chicago Tribune.


As the Arlington Heights Park District’s executive director retires this week, about $85,000 worth of unused sick and vacation days he had accumulated since his hiring in 2008 have led to a significant salary spike during his final years of service, according to public records obtained from the park district by the Arlington Heights Post.
Retiring executive director Steve Scholten, 62, whose last day on the job is this week, was paid $182,533 in 2014, with his salary rising $32,516 – almost 18 percent – to $215,049 in 2015, officials said.
Scholten also received a six percent raise on Jan. 1, just months after he had alerted the park district’s board of commissioners that he would be retiring on June 30, but officials said most of the recent salary increase can be attributed to the park district paying out on Scholten’s unused sick and vacation days.
As of December 2015, Scholten was paid out half of his vacation and sick time, which was included in his $215,049 wages, said Donna L. Wilson, the park district’s director of finance and personnel.
“Once an employee announces they are retiring, we start paying out right away, so there’s not such a huge hit at the end,” Wilson said.
Since his hiring in 2008, Scholten had accumulated unused vacation days adding up to about $57,000, and unused sick days adding up to about $28,000, Wilson said.
While belt-tightening measures by the park board in 2012 eliminated the policy of allowing employees to be paid for unused sick days for those hired after 2007, Wilson said Scholten had an exception in his contract that allowed him to be exempt from the new provision.
Officials said that the park district’s new executive director, Rick Hanetho, who previously served as executive director of the Northbrook Park District, will have a base salary of $185,000, plus a $625 monthly car allowance, but has no payout provision in his contract for any unused sick days.
Prior to 2012, the park district paid half of an employee’s accumulated sick days up to 90 days, or a maximum of 45 days, Wilson said.
Scholten will have received all of his unused sick leave pay by Thursday, Wilson said.
Scholten’s monthly pension, which will be administered by the Illinois Municipal Retirement Fund, or IMRF, will be roughly 75 percent of the average of his highest annual salary earned over four consecutive years, IMRF spokesman John Krupa said.
In Scholten’s case, since he was employed by several local park districts during his 40 years in parks and recreation prior to being hired in Arlington Heights, including Elk Grove, Medinah, Glen Ellyn and Bloomingdale, Krupa said in addition to Scholten’s employee contributions, the remainder of his pension will be paid by each of the municipalities where he worked.
“It’s shared, and each park district’s liability is proportional to the amount of service credit earned,” Krupa said.
Krupa said it’s neither illegal nor unusual for public employees to “accrue a lot of sick and vacation days, and have a lump sum payment near the end of their employment.”
Indeed, Krupa said IMRF pensions are not contributing to the state’s budget crisis, adding, “IMRF is the best-funded pension system … it’s 87 percent funded.”
“These pensions are not funded by the state of Illinois, and most employers levy a tax for their employees’ IMRF-managed pensions,” said Krupa, adding that while IMRF does administer pensions for retiring executives like Scholten, most of the retirees were earning modest salaries.
“These are blue collar public servants who are not making executive salaries,” Krupa said.
Nonetheless, officials with the Chicago-based nonprofit Taxpayers United of America warned that when public service administrators reap sharp upticks in their wages shortly before retirement, local taxpayers end up picking up the tab for what the organization refers to as “pension spiking.”
“For many retirees in the private sector, they are looking at getting only a Social Security pension of about $15,000 a year,” TUA’s executive director Jared Labell said. “That pales in comparison to these public pensions, especially when you’re facing retirement on a fixed income, and you might not be able to stay in your home, because you can’t afford to pay your property taxes any longer.”
This week, the TUA released the results of its 10th annual Illinois State Pensions Report, which analyzed the IMRF, as well as several other retirement systems, including the Teachers’ Retirement System (TRS) and State Employees’ Retirement System (SERS).
According to the TUA report, the top 400 Illinois pensioners of 2016 will collectively receive $91.5 million in pension payouts this year alone.
“When you look at these huge public pensions, and you look at how much the employee has contributed, the system is lopsided, and it’s left to the local taxpayers to pay the bills,” Labell said.

Northwest Herald|Taxpayers United of America's president talks home rule in Woodstock

Jim Tobin, President of Taxpayers United for America, was quoted by the Northwest Herald about his speech “Home Rule is Home Ruin” presented in Woodstock IL.


WOODSTOCK – With the possibility of Woodstock becoming home rule, local voter advocacy group Voters in Action is encouraging residents to be informed and know what the designation could mean for the city.

 The group organized an event Wednesday night at the Woodstock Public Library, where about 45 people showed up to hear Taxpayers United of America President Jim Tobin’s take on the topic.
Tobin, who founded the taxpayer advocacy group in 1976, said his group characterizes home rule as the “most insidious” form of government in the country.
“The reason we think home rule is insidious is because it allows the city to raise property taxes without limit and without voter approval,” Tobin said, among other reasons.
In Illinois, when a municipality reaches a population of 25,000, it automatically becomes home rule, and Woodstock expects to reach that mark after a special census is conducted.
Advocates of home rule note the benefits, including giving more power to the people who know the community best, giving the city the ability to license landlords and create ordinances to require crime-free housing standards, and improving the city’s bond rating.

 Others feel the city should not be able to raise certain taxes allowed under home rule without voter approval, and have concerns about the elimination of the property tax extension limitation law, which does not apply to home-rule communities.

Woodstock resident and Voters in Action member Scott Gessert asked the Woodstock City Council to consider a policy that would limit the city’s home-rule power, and the council agreed to look at a policy in regards to notification, public hearings and limiting PTELL with an emergency provision – but not to consider an advisory referendum.
“[A referendum] is one of the most important controls voters have over their local government, and there is no good reason to give it up and hand the power to the bureaucrats,” Tobin said.
Woodstock City Council members and Mayor Brian Sager have said advisory referendums take time and money, and consideration of new taxes under home rule would be brought before the public at City Council meetings.
Joe Tirio, Voters in Action founder and Republican candidate for McHenry County recorder, asked for volunteers to help the group canvass newer neighborhoods in Woodstock that will be targeted by the special census. Volunteers will knock on doors May 21 and 22 to encourage residents not to participate in the special census, he said.
“Help us tell those people face to face that we aren’t going to sit and let them get the keys to almost unlimited taxing power,” Tirio said.
Anyone interested in volunteering can email inq@votersinaction.com.
More information on home rule can be found on Voters in Action’s website at votersinaction.com, Taxpayers United of America’s website at taxpayersunitedofamerica.org and the city’s website at woodstockil.gov.

Wirepoints|The Illinois Municipal Retirement Fund’s Shameful Bragging Tour – WP Original

Taxpayers United of America was quoted about the IMRF pensions by Wirepoints.


“Gall: Brazen boldness coupled with impudent assurance and insolence.”
–  Merriam-Webster Dictionary
By: Mark Glennon*
IMRF, the Illinois Municipal Retirement Fund, went on a “statewide informational tour” last week. It was basically a brag fest. Illinois taxpayers should be appalled.
IMRF is the second largest pension fund in the state. It covers 100,000 employees and retirees of 3,000 Illinois municipalities who are not policemen, firefighters and those covered by state pensions. Among its boasts is that it will be reducing contributions made by municipal employers from 11.73% of payroll to 11.34%. Also, it’s “well funded,” in its words — about 87 % funded — far higher than most state and municipal pensions in Illinois.
Here’s why taxpayers should find IMRF’s grandstanding galling:

  •   If you’ve been wondering why Illinois has the highest property taxes in the nation, often exceeding a suicidal four percent, count IMRF as one reason. IMRF is unique among Illinois state and municipal pensions because it’s empowered to force municipalities to raise property taxes to keep its funding up. That crowds out money for libraries, roads, schools, you name it. Taxpayers pay $2.50 for every $1.00 that IMRF member pay into their pensions, far higher than is typical in the private sector. Most IMRF retirees get Social Security, too, into which both they and municipalities contribute. For IMRF, municipalities around the state don’t face the impossible choice of either underfunding or raising taxes to cover contributions — as they do with police and fire pensions. IMRF just sends a bill for whatever it takes, which goes into property taxes.
  •  Even with its comparatively high funding level, IMRF is still short about $5 billion, which taxpayers will be on the hook for. Dropping employer contribution rates means little with taxpayers in hock for that $5 billion plus whatever else accrues.
  • IMRF offers its members, in addition to their pension, a “guarantied” 7.5% annual return savings account, effectively at taxpayer expense. As any saver today knows, guarantied long term rates are far lower than that (under 2.7%). Guess who guaranties the difference? Property tax payers. As with the pension obligations, IMRF can force automatic property tax increases as necessary to cover that savings account. We wrote in detail about those 7.5% accounts earlier.
  • IMRF members also get a “13th payment,” notorious in the pension world. That’s a sort of bonus check once a year in addition to their monthly pension payments, paid entirely by taxpayers, according to IMRF’s site.  It cost $42 million last year. A coalition of public unions gloated two years ago about killing a bill that might have ended it.•  IMRF’s accrued pension benefits have been growing at the pace of 7.2 percent a year since 2000, according to the Illinois Policy Institute, far faster than the 2.3 percent rate of inflation and beyond what city taxpayers can afford.
  • IMRF attributes its supposed success largely to the Tier 2 pension reforms, which it praises. They should be embarrassed if that’s what’s helping them look good. The Tier 2 pension reforms of 2010 are a disaster. They were “bulldozed through” the legislature by House Speaker Michael Madigan with no understanding of the consequences. Tier 2 employees — those hired after 2010 — pay in the same portion of their paychecks even though the cost of their benefits is 40% less than Tier 1 employees because Tier 2 benefits are far less than Tier 1’s. We’ve written in detail about the myriad problems in the Tier 2 “reforms,” linked here, here and here. The General Assembly has a legislative task force trying to figure out how to fix Tier 2 problems. We haven’t heard a peep on that, probably because they are stumped.
  • IMRF continues to peddle numbers about its positive economic benefit, but it looks at only one side of the equation. Eighty-five percent of its retirees remain in Illinois after they retire, supporting the the creation of nearly 16,000 jobs and $600 million in additional salaries, it gloats. Yeah, well, 100% of that money would have been spent in Illinois had municipalities been able to spend it on other services and there’s no reason to think that any fewer jobs would have been supported had the money been left with taxpayers to spend as they choose. IMRF measures only one side of the issue.
  • Why did IMRF, alone, get the right to force funding to keep it relatively healthy while cops and firefighters in many towns an cities face the certainty of having their pensions go broke? Who knows, but maybe it had something to do with mayors, county board members and other top brass politicos being in IMRF.
  • “Spiking” — jacking up end-of-career pay in order to artificially jack up the pension — is a recurring problem with IMRF members. The General Assembly is now considering special legislation to try to control it.
  • Members are supposed to work a minimum number of hours per year to get a pension, but questions persist about how well that’s enforced. As reported last week, some members of one county board weren’t even aware of that requirement.

The press is routinely suckered by IMRF’s propaganda. WTTW’s Chicago Tonight show has featured, at least twice, IMRF representatives showboating as a model as a successful pension, and they go unchallenged. The Rockford Register Star last week praised IMRF, saying it puts other pensions to shame. (They also repeated the absurd myth that 80% funding is healthy for a pension.)
IMRF is no model pension. It is, as Taxpayers United of America put  it, “the gold standard in taxpayer abuse.”
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.
 
 

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Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.

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