East St. Louis in financial turmoil, city at risk of layoffs and payless paydays – FOX2 (St. Louis)

The City of East St. Louis facing a severe financial crisis that could result in layoffs and payless paydays. It could also force the city to slash some services. The crisis was brought on by the city’s failure to keep up with payments to the East St. Louis police and firefighters pension funds. Now the city is on the hook for more than $7 million in past-due payments.
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JimBob
4 months ago

The earlier comments on this post seem like what boxers and their trainers yell at each other before a match. Clay v Liston come to mind. It’s mostly bravado (sometimes called advocacy). The point is that all this happens before the match. PPF gonna kick our ass. Retirees gonna line up for soup and bread. BUT … the real fight is still to happen and it’s gonna take both time and money. Maybe time enough that one or more funds or municipalities or unions run(s) out of money for pensions and health benefits and lawyers. OR workers/retirees have to dig… Read more »

Pensions Paid First
4 months ago
Reply to  JimBob

Enjoy the wait.

JimBob
4 months ago

Totally worth the wait. Events may show that a bird in the hand, etc. is the best choice for most active public employees because the funds already set aside may be gone in five years. Solidarity may crumble as contributing municipalities and districts find themselves in free-fall with population, property values and revenues. Bankruptcy may be the only port in the storm for active workers who see the numbers already at the buffet table. I don’t know how we get the Las Vegas odds-makers to look at Illinois, New Jersey and California … assuming the book makers are not already… Read more »

Pensions Paid First
4 months ago
Reply to  JimBob

Don’t wait too long. We are getting to the point where the majority of the active public employees are tier 2 (if we haven’t already crossed over) and by 2040 there will only be a few tier 1 active employees left. You won’t be able to cut tier 2 pensioners and violate safe harbor. So not sure what type of leverage you think the state would have over active employees. If you want to cut pensions of active employees it better happen within the next 17 years. That’s about 4 more gubernatorial elections. Nothing about recent elections (Current leaders along… Read more »

RON
4 months ago

we need an Illinois constitution amendment to allow for a reduction in pension benefits, just put one on the ballot.

Sam Drucker
4 months ago

Easy solution. One word answer. Bankruptcy. Now start all over.

JackBolly
4 months ago
Reply to  Sam Drucker

IL will eventually have to do what Puerto Rico did. Then all the naysayers will run for cover and not accept blame for the calamity they helped to create.

Pensions Paid First
4 months ago
Reply to  JackBolly

The Puerto Rico bankruptcy offers more insight as to how pensions would be handled. Retired pensioners didn’t get one dollar cut from their pensions. Hardly any money and pensioners continue to be paid in full. Maybe it will be as bad as Detroit where pensioners received a 4.5% cut.

You could go the bankruptcy route years down the road (the state won’t authorize just like Harvey) or you could actually start cutting the number of employees now.

Sam Drucker
4 months ago

PPF the retirees in Detroit lost more than you’re saying. Retirees lost all Healthcare and any raises to their paychecks into the future. So maybe they only lost 4.5% and that’s probably an average. But they all lost future earnings. Which is huge especially in these inflationary times.

Pensions Paid First
4 months ago
Reply to  Sam Drucker

Fair enough. Of course states can’t file bankruptcy so that’s not possible for most of the debt. Municipalities need to get approval from the state for bankruptcy and that doesn’t look like it’s happening any time soon. I guess you’ll just have to wait to take away retiree healthcare for these distressed municipal retirees. Better hope it’s like Detroit instead of Puerto Rico where retired pensioners were kept whole. Just think in 10 years that retiree that is currently making 120k per year will be getting 161k per year. Cut their salary by 4.5% and they will only be making… Read more »

JackBolly
4 months ago

Once again, you missed it. It’s not ‘us vs them’, it’s about the financial health of the state and the burden on taxpayers.

Pensions Paid First
4 months ago
Reply to  JackBolly

The burden is the result of leaders and taxpayers kicking the can down the road. If you want the health of the state to improve then you will need to pay more into pensions now or you will end up paying more later. The state won’t be able to improve its fiscal health by stealing from pensioners. It’s time to move past that fantasy and start paying the bills. It’s you and others that continue to “miss it”. I agree it’s not us vs them. That’s why I continue to state ALL taxpayers are responsible for the debt instead of… Read more »

Last edited 4 months ago by Pensions Paid First
JackBolly
4 months ago

You need to ask your Democrat Gov and Democrat Supermajority friends ‘What are you doing to properly fund public employee pensions, as they are way, way, way underfunded?’ You will get no response, but here is the response you will get if they were honest people ‘It’s not a priority, and when the pension funds do collapse we plan to not be in office’ Now, you can make of that what you want but the endgame for the public employee pensions with Democrats is what is happening in EStl – a fiscal collapse. The ‘diminished and impaired’ will not matter… Read more »

Pensions Paid First
4 months ago
Reply to  JackBolly

I didn’t vote for the current democrats in office so not sure why you think they are my “friends”. If you are upset with all the debt then you will need to contact your politician and ask them to actuarially fund the pensions. Your threat about the states fiscal collapse is meaningless. Pensions were around 40% funded in 1970 and that’s where they remain today. Pensions continue to be paid and continue to funded about the same level. The only thing that’s changed is the increase in taxes. The state has vast taxing ability and they will continue to use… Read more »

debtsor
4 months ago

By admitting that didn’t vote for the current Democrats (because you clearly didnt’ vote for Bailey in 2022), you either 1. Didn’t vote at all (which is unlikely), 2. Voted third-party (doubtful) or 3. No longer live in IL, hence, didn’t vote for Democrats. LOL

Pensions Paid First
4 months ago
Reply to  debtsor

You underestimate my ability to vote for a candidate even if they are massively flawed. Sometimes they represent the lesser of two evils.

JackBolly
4 months ago

You can continue to bloviate, but in case you didn’t notice its 2023 and not the 1970’s.

Pensions Paid First
4 months ago
Reply to  JackBolly

Thanks for the heads up. In case you didn’t notice pensions continue to be paid regardless of all the complaining from you and others. Get over it.

Editor
Nick Binotti
4 months ago

The latest audited annual financial report on the City of East St Louis website in from 2009.

The W-9 form on their Accounts Payable page is from 2017.

But their Citizen Request tracker has a special workflow reporting a “barking dog”.

Old Joe
4 months ago

East St. Louis is the Flint, Michigan of Illinois. They’ve been hurting a lifetime.

GM
4 months ago
Reply to  Old Joe

East St. Louis as recently as 1960 was a nice place, likewise Flint was a “GM CIty” and thus prosperous… read and weep…!!! From Wiki: “East St. Louis continued to have an economy based on industry. Through and after World War II, many workers could make decent livings. It was named an All-America City in 1959 by the National Civic League. East St. Louis celebrated its centennial in 1961. It was known as the “Pittsburgh of the West”. Its population had reached a peak of 82,366 residents in the 1950 census, the fourth-largest city in Illinois at the time…” “Flint’s… Read more »

Old Joe
4 months ago
Reply to  GM

Yep GM, and the rock band Grand Funk Railroad (later Grand Funk) was from Flint! I had their albums as a kid in the early 70s!

Pensions Paid First
4 months ago

“This is not the first time East St. Louis has been in a jam like this. The same thing happened back in 2019 when the pension boards were asking the state to intercept East St. Louis funds because of missed payments to the pension fund.Cason says an agreement then also helped avert a financial disaster. ”Right and we barely, luckily, didn’t have to make any cuts. These are payless paydays. We were able to get out of that situation. This situation is different, and we’re going to do our best to try to get through it.” Maybe this time you… Read more »

Pensions Paid First
4 months ago
Reply to  Mark Glennon

I believe in prioritizing your bills before spending additional money. You believe in stealing from retirees so that the spending can continue on as usual. Your position is what brings us to the financial predicament we find ourself in today. My position eventually brings fiscal prudence. Your position encourages other government bodies to spend frivolously because they can always steal from retirees later. My position serves as a warning to other government entities as to what can happen if you don’t properly manage a budget.

Some of us believe in the laboratory of democracy.

Last edited 4 months ago by Pensions Paid First
debtsor
4 months ago

What money, PPF? Have you seen East St. Louis? What is there left to cut? I can’t wait for you to get your comeuppance

Pensions Paid First
4 months ago
Reply to  debtsor

You were the one that told me you could easily solve Illinois budgetary issues by cutting out all of human services, department of education and a number of other areas. You told me we could cut our budget from 50 billion per year to 10 billion per year. Stated it would be painful but it could definitely be done. I’m sure you’ll figure it out. The current budget is around 45 million. I think they have about 200 employees and over 100 vehicles. Looks like they will need to cut police and fire and maybe start outsourcing as much as… Read more »

debtsor
4 months ago

If they have 200 employees for a town of 18,000 people, then yes, they probably have a lot of room to cut. This I didn’t realize.

Freddy
4 months ago

If the 100 vehicles bought their gas in St. Louis,Mo it is $2.39 at most stations and Costco it is $2.29. In East St. Louis gas is $3.59 at BP which is well over a $1.00 per gallon savings. This could save the city tons of money.

Riverbender
4 months ago
Reply to  debtsor

I drove through it the other day to reminisce on childhood memories gone by. Gone are the stockyards, the Aluminum Company and all the other assorted operations closed by the mess that Illinois is. One can see considerable Government spending projects though as East St Louis trades its votes for Governmental handouts including some very nice new housing thanks to us, the taxpayers.

debtsor
4 months ago
Reply to  Riverbender

Decay, blight, destruction. That is the future.

Pensions Paid First
4 months ago
Reply to  Riverbender

Plenty of money in the TIF fund I’m sure.

Freddy
4 months ago
Reply to  debtsor

Here is the average home value in East St. Louis. A whopping $34K or so. Where will the money come from to pay the obligations?
https://www.zillow.com/home-values/51813/east-saint-louis-il/

Riverbender
4 months ago
Reply to  Mark Glennon

I have to jump on PPFs bandwagon on this one. I personally thought it was a very bad provision to put into the Constitution back in 1970 yet the people apparently thought differently than I do and passed it into law. Should something be driven into the ground, something I wouldn’t like, the people apparently wanted io be that way. My liberal neighbors just love to walk around, smile and carry on about how wonderful Governor Pritzker and Illinois is. They need a jolt of wakeup juice and then maybe there will be some progress on the pension funds. We… Read more »

Pensions Paid First
4 months ago
Reply to  Riverbender

We have plenty of money for ( fill in the blank) but never for paying our bills; the Illinois way.”

100 percent the Illinois way. Until voters are actually forced to live with the consequences this will continue.

debtsor
4 months ago
Reply to  Riverbender

There’s no jolt of wake up juice. Things will not get better. Is Russia any better today under Putin than it was 100 years under the Czars? It’s human nature for Democrat voters to abandon their follies and take their insanity to new locales to spread their necrotic disease called progressivism. Like cancer, their policies must be defeated and utter destroyed where ever you find it, because it spreads. Sometimes, the disease can be cured, but often, it cannot.

Riverbender
4 months ago
Reply to  debtsor

The jolt of wake up juice will come when tax hikes will approach confiscatory levels. Incidentally on my drive through East St. Louis I saw that a building I used to work at was torn down. The building was in good shape and had been boarded over by the owners family to preserve the building. I looked into the matter and turned out taxes on the place were over 60,000 per year so they simply tore the place down. So, as you see, taxes can become confiscatory and unless those pensions are funded they will be

debtsor
4 months ago
Reply to  Riverbender

But the building was torn down because taxes were too high. Nobody woke up, the building is now gone, and the county didn’t get the tax revenue. It’s a lose-lose for everybody and it continues into perpetuity.

Riverbender
4 months ago
Reply to  debtsor

The owner of the building got the wake up call and did I read here the other days something about taxes being doubled somewhere near Chicagoland? It’s coming and will be a one by one thing but it will come. Illinoisans need a lesson in “everything in life is not free.”

ProzacPlease
4 months ago
Reply to  Riverbender

Lessons do need to be learned. Another is, “You cannot destroy your neighbors, city, and state, then expect to sit back and be paid for your efforts.”

Last edited 4 months ago by ProzacPlease
Pensions Paid First
4 months ago
Reply to  ProzacPlease

The firefighters and police officers from ESL didn’t destroy anything. They were forced to join a pension when they were hired and made their required contributions. They didn’t have a choice.

The voters on the other hand chose our leaders. The taxpayers don’t get to vote for more spending and too little in taxes and then complain that their city is destroyed. They broke it and now they own it. All taxpayers will pay for their lazy voting habits.

debtsor
4 months ago

What are you talking about? The taxpayers collectively don’t own anything. They’ve all died or moved away. East St. Louis had a population of 82,366 in 1950 and today, 2020, it’s only 18,469. The taxpayers are not paying for their lazy voting habit because they’re all gone or dead. The city has been destroyed. The city is unable to pay its pension obligations because of the voting habits of people who no longer live or vote in East St. Louis. It’s a complete mess, the destruction of all of this for nothing.

james
4 months ago
Reply to  debtsor

“You say potato, and I say potahto; let’s call the whole thing off.” All employee compensation comes from the employer. The pension contribution can be made by the employer or the employee. Either way there is the same pretax cost to the employer. The single difference is the after-tax income paid to the employee. There is no net difference in cost to the employer here.

james
4 months ago
Reply to  james

Oops, that comment was meant for The Doctor.

Freddy
4 months ago
Reply to  james

WHO??? LOL

Riverbender
4 months ago
Reply to  debtsor

They died or moved away? Now that is an interesting comment. That comment could be applied to the State as well being Illinois taxpayers are not demanding that the pension bills get paid. They would much rather have a new sports park or entertainment venue. Old taxpayers and new taxpayers are all the same when it comes to Illinois. They want niceties and push their bills to others to pay like musical chairs except the music is stopping.

debtsor
4 months ago
Reply to  Riverbender

Very true +1 even if we disagree on the lack of lessons learned

The Doctor
4 months ago

Government employees do not make any contributions.

The salary and pension contributions all come from the employer ( govt body).

That x% shows up on a line as pension contribution does not mean it is coming from employee.

Fullbladder
4 months ago

Your kidding right? Firefighter and police built the Illinois Democrat party; they’re called LABOR.

Zephyr Window
4 months ago

No choice at all, sign the pension enrollment forms or there’s the door. No choice yet it’s the retirees fault? Chicago, Cook County, Illinois has hundreds of millions of dollars to spend on illegal aliens who are squatting in the USA. Millions for DEI, millions for any project the politicians think up. Didn’t Chicago just burn up a million dollars at the polluted camp site that’s been shutdown? Could those hundreds of millions be directed to pay the owed bills, support the pensions instead of being used the way they are? Why? Because the democrats are acting like tyrants because… Read more »

Pensions Paid First
4 months ago
Reply to  Zephyr Window

Well said Zephyr. Pensioners performed their work to their contract. Paid their share per their contract. Yet the ignorant on this site want to blame these same police firefighters and teachers because the state and cities didn’t put in their share. Now the payments are even higher. Maybe next time don’t spend money on all the other initiatives you mentioned and actually pay the required bills. If the voters don’t start demanding this the cost will only go higher. Pensions will be paid.

ProzacPlease
4 months ago

The city didn’t put in its share. So what did the city divert all those funds to, that they didn’t put in the pension fund?

On salaries for their unionized employees, of course. Union salaries are by far the largest item in any city budget.

Pensions Paid First
4 months ago
Reply to  ProzacPlease

So what. If they spent the money elsewhere then that’s on the city and the people that elected them. The city could have negotiated tougher terms. They could have reduced head count. They could have outsourced services. They could also have raised taxes. It’s up to the city leaders and the voters to prioritize.

Last edited 4 months ago by Pensions Paid First
ProzacPlease
4 months ago

So everyone else is responsible for prioritizing, but the unions have no responsibility in the matter? Why did they not worry about prioritizing pension funding instead of demanding as much as possible each contract?

Of course it’s because they have no reason to do so. They believe they can take every penny now, because the pension guarantee means they can also take whatever they need later. This situation was inevitable. It would not matter how much had been paid in previously. The unions would have made sure to get it all.

Pensions Paid First
4 months ago
Reply to  ProzacPlease

“Why did they not worry about prioritizing pension funding instead of demanding as much as possible each contract?” They tried to force funding and the courts told them they have no right to any set funding level. You seem to keep forgetting this basic fact. “So everyone else is responsible for prioritizing, but the unions have no responsibility in the matter? Correct. It is the responsibility of the taxpayers as a whole and not individual unions. They tried through the courts and were shut down. Therefore, it’s up to the taxpayers. It’s the unions job to get the best possible… Read more »

ProzacPlease
4 months ago

How many politicians opposed by the public unions have won in the last 50 years? Rauner?

Unions have gotten exactly what they wanted in this state, including the pension deficits. As you have constantly told us, there’s plenty more to be had.

Stop trying to play the victim and blame “the voters” when you got exactly what you wanted, and are confident that situation will continue in perpetuity. That’s the whole point of the union. “We are entitled to everything”. Certainly the point isn’t to educate children LOL. But that’s the voter’s fault too.

Pensions Paid First
4 months ago
Reply to  ProzacPlease

Let’s be clear. I’m not nor have I ever claimed to be the victim. What would I even have to complain about as far as being a victim? I’m just trying to get people to realize that this problem won’t magically go away. We will need to fund these pensions. That’s not playing a victim but rather proactively discussing what needs to happen for the state to become fiscally healthy. “Unions have gotten exactly what they wanted in this state, including the pension deficits” No, the voters have gotten exactly what they wanted, including the pension deficits. All the voters… Read more »

Last edited 4 months ago by Pensions Paid First
ProzacPlease
4 months ago

Just take the W, PPF. Your unions have the residents of this state in a financial strait jacket which will be almost impossible to throw off. Congratulations.

Just stop trying to take the moral high ground, “you’re trying to steal from us poor $150k per yr retirees who just fulfilled our contractual obligations!”. Nobody buys the oh-so-upright act. It’s getting old.

It would probably work better if the unions could point to their achievements in educating children. Alas, that road has been closed for a long time. Best just to cash your check and stop talking.

Pensions Paid First
4 months ago
Reply to  ProzacPlease

They aren’t my unions. You keep making wild assumptions. You’re correct that pensioners get the W but taxpayers don’t need to take the L if they actually start funding pensions according to actuarial standards. I’m a taxpayer just like you and want the state to be fiscally responsible. It’s not the unions jobs to educate children. Not sure where you heard that. Their job is to represent teachers to get the best financial package as well as classroom conditions. That’s up to the schools, parents and teachers. I’ll keep talking as long as I choose. Stop constantly complaining and there… Read more »

debtsor
4 months ago
Reply to  ProzacPlease

So who is learning the lesson? The county? The county is unfeeling a municipal entity that doesn’t care. The owner didn’t teach anybody a lesson. The owner had to tear down a building instead of selling it because the taxes are too high. Now there’s no building and the owner is paying less taxes. And that’s my point, it’s all useless and unnecessary destruction, and ultimately, everyone suffers over it.

anticoyote
4 months ago
Reply to  debtsor

 Russia any better today under Putin than it was 100 years under the Czars?

100 years ago Russia (Soviet Union) was under the Communists. And yes, it is better in Russia today than under the Czars.

JackBolly
4 months ago

‘Payless Paydays’ – Told ya.

Pensions Paid First
4 months ago
Reply to  JackBolly

Pensions still getting paid. Told Ya

JackBolly
4 months ago

Not in EStl anymore. IOU’s for payment. Coming to other municipalities.

Pensions Paid First
4 months ago
Reply to  JackBolly

Not for pensions. The funds will use the intercept law just like Harvey. Pensions will be paid first.

Check out Harvey Illinois to see your roadmap.

Last edited 4 months ago by Pensions Paid First
JackBolly
4 months ago

The ‘roadmap’ will be Puerto Rico

Pensions Paid First
4 months ago
Reply to  JackBolly

Interesting. So pensioners that are already retired will continue to receive their full pension while active employees of the city will see some type of cut.

You better hurry up with that plan. Pretty soon the only active employees will be tier 2 and the feds won’t let you cut them any lower. Keep in mind you will need the state to approve any bankruptcy. They didn’t do it for Harvey but I’m sure they will going forward.

No, somehow I think Harvey is the real plan.

Willowglen
4 months ago

An intercept redirects state tax proceeds due to the municipality to the pensions. E St Louis is unfortunately a very trying case. Intercepted proceeds may not be enough – there is very little economic activity there – meaning that cuts will have to be so deep the place may plunge in population even more than it has. Given the politics of Illinois, one can assume the legislature would step in but a perilous thing – Harvey, North Chicago and so on may not be far behind.

Pensions Paid First
4 months ago
Reply to  Willowglen

The city has a budget of 45 million for a town of 18k people. I live in a well to do suburb with more than twice as many people and a budget that isn’t much more. I haven’t looked at the the total proceeds the state sends ESL but somehow I have a feeling it’s the only thing keeping them afloat. Intercepting that money and forcing drastic cuts is the best option for the pension funds. I believe Harvey needed to cut over half of its firefighters and police. They stopped paying other debt for over 5 years. They have… Read more »

Ex Illini
4 months ago

Can’t get blood from a turnip.

Pensions Paid First
4 months ago
Reply to  Ex Illini

No but you can confiscate the money the state sends them.

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