Illinois households owe $110,000 each for state’s $530 billion pension debt, new report says

Illinois households owe $110,000 each for state’s $530 billion pension debt, new report says

ILLINOIS (IRN) — A new report shows Illinois taxpayers are on the hook for $110,000 each for the state’s more than half-a-trillion public employee pension debt. Republican candidates for governor say they can right the ship.

When combining state and local public retiree obligations, Wirepoints shows the total unfunded liability is $530 billion.

“Moody’s puts the state pension debt, not at the official [Illinois state government provided] numbers of $144 billion, they say it’s $313 billion,” said Wirepoints President Ted Dabrowski. “Chicago and Cook County have $122 billion in debts. You’ve got the state retiree health insurance that nobody ever talks about, that’s $55 billion at the state level and there’s another almost $20 billion at the local level.”

The state is an outlier on pension debt, eclipsing California and Texas, and dwarfing every neighboring state by far.

Coinciding with the report’s release, the group held a forum with the four Republicans vying for governor.

State Sen. Darren Bailey, R-Xenia, said he filed to amend the pension protection clause as a way to spark conversation with workers, not union bosses and the political elite.

“It’s obvious that 401(k) plans must supersede, it’s obvious that we have to work within a reasonable [Cost of Living Allocation], we’ve got to obviously have health insurance participation,” Bailey said.

The state’s Tier I retirees get 3% compounded annual increased pension payments and free retiree healthcare, things upheld by the pension protection clause of the state constitution.

Businessman Gary Rabine said the costs are driving up property taxes while property values decrease.

“If these high taxes were actually paying down some of the principal on this debt, that’d be one thing we could talk about,” Rabine said. “But we’re not even paying down any principal. It keeps growing. We’re not even paying down any interest on this debt.”

Former state Sen. Paul Schimpf, R-Waterloo, said the problem won’t be solved with a “silver bullet or magic beans.”

“The No. 1 driver for our pension shortfall is simply the Illinois politicians not making the required pension payments,” Schimpf said.

Schimpf said Democrats at the helm are derelict by overspending on new programs instead of focusing on paying down debts.

Venture capitalist Jesse Sullivan said there needs to be a balanced approach in honoring what’s been promised but focusing on solutions for the future.

“We need to care about our retirees, those who have earned a pension. We need to care about them so much that we make this system solvent,” Sullivan said. “We also have to care about the taxpayers, making sure they’re not getting the raw end of a deal moving into the future.”

Messages seeking comment from the Pritzker campaign were not returned.

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