Wirepoints, a government watchdog website operated by the same people who run the Illinois Policy Institute, listed Oak Lawn’s police and fire pension funds as “underfunded” while arguing that as many as 200 municipalities may have to declare bankruptcy at some point.
The only problem is that municipalities are forbidden from filing for bankruptcy and even if they could file bankruptcy, courts would likely find that municipalities have the ability to raise revenue and therefore are not bankrupt.
The report came in light of the City of Harvey’s recent pension crisis and the local pension board’s decision to intercept state revenue for the pensions rather than operating costs.
Wirepoints argues that the crisis is not limited to Harvey and is severe from “East St. Louis to Rockford and from Quincy to Danville” based on their review of state pension data.
Both Oak Lawn’s police pension fund and its fire pension fund are named in the report and possibly entitled to future garnishment of the village’s revenue from the state.
Under state law, pension funds that don’t receive the required funding may demand that the Illinois Comptroller intercept their municipality’s tax revenues.
Oak Lawn’s Fire pension fund was funded at 58% of the required amount in 2016 creating a shortfall of $1,156,767. That’s a percentage shortfall of 28 percent.
The police pension fund is worse. It was funded at 52% in 2016 creating a shortfall of $1,902,607. That’s a percentage shortfall of 39 percent.