Great Article about Maria Pappas – Cook County Treasurer
Governments are also under tremendous pressure to keep their pension fund rate of return high: the lower the rate of return on investment, the greater the pension obligations become. Basically, if the assumed rate of return is lowered by 1 percent, the total pension liabilities are projected to increase by 25 percent. Most agencies in Cook County use a 7.5 percent rate of return in calculating pensions.
Other counties around the nation should do what we have done to make the financial information at the local level transparent to their citizens. If local debt is a problem for the local governments in Cook County, Illinois, it is a problem in all counties across the country.
How is the financial condition of your own Cook County Government?
Cook County is the second most populous county in the United States and has a variety of fiscal challenges.
The Cook County Jail is the largest single-site jail in the nation, and the cost to house an inmate is roughly $50,000 a year. The Juvenile Detention Center is also one of the largest in the country. In addition, Cook County operates the second largest public health system in the country, including three hospitals and a network of over 30 clinics.
Many homeowners incorrectly think the County spends all the revenue collected from property tax payments, when in fact, an individual payment is distributed to 14-22 different governmental entities. The County gets about only 6 percent of the total tax bill.
Recently, the County has balanced its budget annually without increasing its property tax levy. Fiscal Year 2013 is the 17th consecutive year the county has kept property taxes flat.
Maria, you have emphasized to me in previous conversations that in some respects, excessive local debts pose challenges and hazards that are even greater than those at state and federal levels which get far more attention.
Local governments rely on the collection of property taxes as their major source of revenue. And that’s why we’ve made debt disclosure a priority in Cook County. Even though market values of housing have declined, taxing districts nevertheless demand the same amount, or even more to fund operations. Across Cook County, all property taxes collections rose 48 percent from 2000 to 2010, twice the rate of inflation during that period. Residential property taxes have increased by as much as 172 percent during that time.
Local governments simply have few stable sources of revenue other than property taxes. Unlike the federal government, local governments can’t print money to make up the shortfalls.
Maria, let’s be very grateful that they can’t print money. We’re witnessing more than enough of that in Washington already!
The trick is to stop local governments from acting as if they print money as well. We’re working on that here
