(The Center Square) – Wirepoints President Ted Dabrowski contends there’s a good reason Illinois finds itself in the dire straits it does when it comes to its still growing pension debt.
“We have the biggest crisis in the country and Gov. [J.B.] Pritzker and Democratic leaders do nothing about it,” Dabrowski told The Center Square. “I think the issue is Pritzker and many leaders aligned with him count on the support of the unions and this is what that group gets in exchange for that support, big pensions, big benefits and an unreformed system. Democrats don’t want to upset their biggest supporters, they’d rather continue to tax, cut services and look for federal bailouts.”
A new Equable Institute report finds Illinois’ state and local pension debt now tops $218 billion, with both debt to GDP and funding ratios the worst in the country. In assessing the data they collected, researchers weighed state and local pension debt across all major state and municipal pension plans, concluding that Illinois capped the 2023 fiscal year with an estimated $429 billion in pension liabilities with only $218 billion worth of assets, leaving a $211 billion hole stemming from the growing imbalance.
With the state’s pension systems’ collective funding ratio at just 50.8%, experts are quick to point out pensions with funding ratios that fall under 60% are considered deeply troubled, adding plans with funding ratios below 40% are widely viewed to be beyond salvageable.
In addition, of the 167 statewide pension systems analyzed as part of the report, three of the state’s five state-run retirement systems were among the 10 worst-funded systems in the country, with the State Employees Retirement System, Teachers Retirement System and Judges Retirement System all ranking among the worst-funded systems in existence in 2023.
In the face of all the mounting red-ink, Dabrowski sees just one way forward.
“We’ve got to immediately convert all future retirement benefits to 401K style accounts and pursue an amendment to the state constitution that reforms the system,” he said. “That should include allowing the legislature to reform benefits so that pension plans for pensioners go forward but don’t continue to swell to the point of overwhelming taxpayers. Without that, people will continue fleeing the state because the only way to cover all the costs is to continue overtaxing people.”
With pension systems for Chicago’s laborers, police, municipal employees and firefighters all already well below the 40% threshold, Dabrowski warns the worst could still be yet to come.
“Gov. Pritzker has no intention of reforming pensions,” he said. “He recently said reforming them is a ‘fantasy,’ which explains why we pay the highest property taxes and one of the highest tax rates in the country as people continue to leave this state.”