Highland Park approves 2 percent tax levy hike
Updated: December 11, 2012 5:44PM
HIGHLAND PARK — The Highland Park City Council has worked feverishly for months to achieve a nearly flat property tax levy — even tapping city reserves to hold down an increase for the Highland Park Public Library.
But with steep increases in pension contributions looming on the horizon, some council members Monday felt it prudent to pay a little more now into the pension funds for police and fire personnel to soften the blow later.
“If you don’t take incremental steps, at some point you are going to have to take extreme steps,” said City Manager David Knapp.
By a narrow 4-3 vote, the council approved a $15.2 million property tax levy that was up 2 percent over the amount billed to taxpayers on the city’s behalf in 2012.
“I know we are trying to reduce the burden on our citizens, but I also don’t want to increase the burden on our children going forward,” said Mayor Nancy Rotering, who proposed levying an additional $220,000 for police and fire pensions beyond the $366,000 increase required by actuarial calculations. The total contribution for police and fire pensions will be about $3.56 million.
According to Knapp, the police pension fund is about 70 percent funded, meaning the fund has about 70 percent of the assets necessary to pay the benefits already earned by retirees and current workers under certain assumptions about age and salary at retirement and rate of investment returns. The fire fund is about 74 percent funded.
State pension reforms enacted in late 2010 pushed back the target date for full pension funding from 2033 to 2040. However, Highland Park and other municipalities are seeing their annual contributions rise dramatically each year, due in part to an economic downturn that has forced municipalities to ratchet down their expectations for investment returns.
“I think these are still very challenging times for many residents,” said council member Daniel Kaufman, one of three who felt this was not the right year to hike contributions beyond what was required.