By Benjamin Yount | Illinois Watchdog
SPRINGFIELD, Ill. — The idea of paying it forward is simple.
I do something that costs me, so the people who follow me have an easier time of things; whether it’s paying for someone else’s coffee, cleaning up a junk-riddled creek or cutting government spending to make sure a city doesn’t collapse.
- RISK: Pensions are risky enough without adding borrowing to the mix.
Which is why Bloomington alderman Rob Fazzini’s plan to borrow $40 million to pay for pensions — and the borrowing itself — has raised so many questions.
“It’s not (just) borrowing to pay for the groceries,” said Cory Eucalitto, an editor and author at State Budget Solutions. “It’s more like borrowing to pay for the credit card bill you ran up buying the groceries.”
Eucalitto said borrowing is not all bad in every situation, but he cautioned that Bloomington’s fiscal problems are not one of those situations.
“Maybe it’s a good idea when a state or city is in a good financial position and has the opportunity for investment in infrastructure” Eucalitto said. “But when you’re faced with increasing pension costs and other forms of debt, and you think that borrowing more now can solve that problem, you’re really just going to be dealing with higher payments in the future.”
Bloomington is facing a $1.6 million increase for its police and fire pensions.
Fazzini told the Bloomington Pantagraph, “The concept isn’t, ‘Should we do it? — It’s, ‘Should we do it now or pay more money later because we didn’t do it now?’”
Bloomington’s City Council is trying to come to terms on a city budget by the end of the month. That spending plan will either include millions of dollars in spending cuts or millions of dollars in new taxes — and perhaps a little of both.
Reach Benjamin Yount at Ben@IllinoisWatchdog.org and find him on Twitter @BenYount.