Illinois Policy Institute
Every Illinois household now on the hook for $27,000 in public pension debt for state government
Chicago – Illinois’ public pension debt now stands at $130 billion, a 17 percent increase since 2015. Illinois’ pension crisis continues to worsen despite the fact that pension costs now consume more than 25 percent of the state’s annual budget.
Illinois households are now on the hook for $27,000 each in state pension debt, $4,000 more than last year. The new data from the state’s Commission on Government Forecasting and Accountability comes as state taxpayers are already suffering from one of the nation’s worst economic recoveries, one of the country’s highest unemployment rates and the nation’s highest property taxes.
The COGFA report also found that the state’s five pensions funds now have less than 38 cents on hand for every dollar needed today to pay out future benefits. According to Fitch Ratings, Illinois’ pension plans are the worst-off in the nation.
“Illinois is marching toward insolvency and needs a massive overhaul of its public sector pension system now,” said Ted Dabrowski, vice president of policy at the Illinois Policy Institute. “Lawmakers have no excuse to continue ignoring Illinois’ crippling pension crisis. They can immediately implement reforms that don’t require changes to the Illinois Constitution, including putting all new government workers on 401(k)-style plans and providing optional self-managed accounts to existing workers.”
Taxpayers are already on the hook for over $1 billion in extra contributions to the pension systems in 2018, which will result in greater cuts to core state services. Without reforms, these costs will only continue to rise.
The Illinois Policy Institute is a nonpartisan research and education organization. Our vision is to make Illinois first in economic outlook and job creation, and for Illinois to become a free enterprise leader for the rest of America. As a leading independent research and education organization, the Institute generates positive and sustainable policy solutions for citizens and lawmakers that help unleash talent and entrepreneurial ability. To learn more about the Institute or review our policy work, please visit: www.illinoispolicy.org.