Twenty-five years ago, the population of Harvey in the south suburbs was slightly higher than Wilmette on the affluent North Shore.

Harvey’s 30,000 residents well exceeded the 27,651 who lived in Wilmette at the time. The south suburb’s inhabitants were working class rather than the upper-middle-class and wealthy households in Wilmette, but with a median household income of $40,000 (more than $75,000 today, adjusted for inflation) Harvey’s residents were earning nearly the median for the country as a whole.

Today? Harvey has lost more than a third of its population, with the total dipping below 20,000. Median income is slightly above $41,000, about half the median income in Cook County as a whole. Wilmette’s population is about the same as it was in 2000 — 27,550. And median income? Not a concern — in 2000 or today.

Like the U.S. economy as a whole, the gulf between the municipal haves and have-nots in Cook County has widened substantially in the past quarter century.

So when news came down last week that Harvey’s City Council had voted overwhelmingly to declare the municipality a financially distressed city, opening the door to a state takeover of sorts of Harvey’s finances, maybe it shouldn’t have come as a surprise. And yet it did because Harvey is only the second municipality in Illinois history to take this step under state law. East St. Louis was the only other, and that was 35 years ago.

Harvey indeed is in dire straits. Its property taxes are the third-highest in Cook County and, unsurprisingly given its demographics, only about half its households can afford to pay them. More than $25 million of what Harvey levies in its property taxes goes uncollected, Mayor Christopher Clark said at last week’s council meeting.

Harvey said 69 employees, including police and fire, were to be furloughed without pay beginning Tuesday. That’s more than 40% of the city’s workforce. Clark told ABC-7 that it was possible some of those furloughed workers would be laid off, although he was hopeful the state would provide a financial lifeline to enable all of them to return to work.

This page has fretted about the corrosive effects of sky-high property taxes throughout Chicagoland, but the problem is acute in the south suburbs. And now the consequences have become all too real in one of the more sizable municipalities in the Southland.

While Harvey’s financial woes have been exacerbated by corruption over the past two decades-plus, that’s not the primary cause of this distress. The population decline and the demographic shift to more low-income households have hobbled the city’s tax base.

Meanwhile, Harvey is saddled with public pension funds that are desperately underfunded. An agreement in place since 2018 sets aside 35% of Harvey’s revenue from the state for the city’s police and fire pension funds. That’s money that otherwise could support police, fire and other municipal services.

These aren’t phenomena peculiar to Harvey, needless to say. More such dominoes in Cook County quite likely will fall, and if and when they do, much of the parrying between the state and localities over finances will get that much more intense. We’ve seen the state of Illinois plug its own budget deficits by shorting the revenues it’s supposed to be sharing with local governments from the income tax and other sources.

The end result is that too many municipalities and other taxing bodies have resorted to hiking property taxes — one of the few revenue sources available to them — which has made Illinois’ property tax burden one of the highest in the nation.

If we see more local governments throw up their hands and ask the state to take over, that will create momentum for solutions beyond Band-Aids. Right now, Illinois doesn’t permit its municipalities to declare Chapter 9 bankruptcy unlike two dozen other states. Look for more pressure to change that policy.

It also will raise alarm bells for the city of Chicago, which has seen its credit downgraded this year for the first time in about a decade and whose mayor just proposed a $16.6 billion budget that his own finance team acknowledged could well result in more downgrades.

Chicago is not Harvey, of course, and has a diverse and resilient economy. But it’s not immune to these trends. Its population has declined over the same period that Harvey’s has, its economy is stagnant and its municipal pension funds — particularly police and fire — now are so underfunded that they’re technically insolvent. Why? Gov. JB Pritzker signed legislation in August under which the state added $11 billion in unfunded liabilities to Chicago’s police and fire pensions thanks to sweetened benefits for beneficiaries hired in 2011 or later.

Do you detect a trend?

Municipalities including Harvey and Chicago bear most of the responsibility for their financial predicaments. But the state has been part of their problem as well. And, at least in the case of Harvey, that mess has just landed right on the state’s doorstep. It likely won’t be the last.

Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.

https://www.chicagotribune.com/2025/10/22/editorial-harvey-insolvency-property-taxes-pensions/