Illinois pension costs impair spending on roads, public services
Illinois taxpayers spent $3.3 billion more on public pensions between 2017 and 2022 than state forecasts said they would. Had that money not evaporated, it could have paid to repave 150,000 miles of roads or for nearly 25,000 full-ride scholarships.
Illinoisans spent $3.3 billion more than projected on the state’s worst-in-the-nation pension crisis between 2017 and 2022. That’s enough money to give every taxpayer a $284 rebate, repave more than 150,000 miles of road or give every student at Southern Illinois University, both Edwardsville and Carbondale, a full-ride scholarship for four years.
An Illinois General Assembly Commission on Government Forecasting and Accountability report in 2016 predicted state pensions would cost taxpayers $61.6 billion during the next five years, with spending set to peak at $10.7 billion in 2022.
But its annual pension reports show Illinoisans actually spent $64.9 billion on state employees’ retirements during that time, with total contributions reaching $11.6 billion this year – roughly 27% of the state budget.
What could Illinois leaders have done with an extra $3.3 billion? A host of things. They could have repaid the federal loan about to drive up employer taxes plus added over two more weeks of operating cash to the state’s rainy day fund.
Despite eating a significant share of the state budget, Illinois still owes more to its statewide public pension funds than any other state, at $130 billion. Local pension funds are owed another $75 billion.
The “hold harmless” pension reform developed by the Illinois Policy Institute would tie all pension cost-of-living adjustments to inflation rather than a fixed rate of annual growth, saving $50 billion by 2045. It would also increase required government contributions to fully fund retirees’ promised pensions rather than the current target of 90% funding.
While a pension solution has been ignored by Springfield politicians more concerned with serving special interests than the public good, polling finds a supermajority of Democratic and Republican voters in Illinois want pension reform.
Maybe it’s time to give the people what they want, plus a tax rebate or some smoother roads.