Illinois’ pension crisis has been a growing problem for decades, and its negative effects on state residents are well documented.1 Economic fallout from the COVID-19 pandemic and related government shutdown orders threaten to bring that long-running crisis closer to its breaking point. The state’s five pension systems collectively held nearly $139 billion of debt at...View Report
Chicago had planned to use half of its federal relief funds to pay down pandemic debts, but new federal guidance may prevent that. Regardless, without pension reform the city will continue drowning in debt.
Former Illinois House Speaker Michael Madigan will collect $85,000 a year, but in a little more than a year his pension will shoot up to nearly $150,000 a year.
President Joe Biden on Friday is expected to sign the COVID-19 stimulus bill, with direct payments to most Illinoisans and a significant boost to local and state governments. Illinois can use this opportunity to fix state finances.
State lawmakers have significantly abused and underfunded their own pension system. Ending it would be a plus, but only a constitutional amendment will stop pension debt from swallowing Illinois.
Illinois worst-in-the-nation public pension debt grew 19% year over year. It will continue hurting the state economy and job growth, driving more people out of Illinois, unless there are reforms.
Illinoisans pay a hidden pension tax. Eliminating that cost would free up resources to help Illinois recover from the COVID-19 recession while also raising the state’s long-term economic potential.
Because of a pension sweetener for politicians that Madigan helped create, the former speaker’s pension will spike more than $66,000 the year after his first full year of retirement, then grow 3% each year thereafter.
Over the objections of Chicago Mayor Lori Lightfoot, who called the legislation “irresponsible,” state lawmakers passed a bill to increase the cost-of-living adjustment for 2,200 Chicago firefighter pensions to 3% from 1.5%. Gov. J.B. Pritzker should veto it.
Illinois’ current budget started out at a deficit, hoped for a tax increase that was rejected and counted on a federal bail-out that never came. Gov. J.B. Pritzker’s best fix is pension reform.
New official reporting from the state of Illinois shows both rising debt and rising costs in state retirement systems, with essential government services again facing cuts.