Illinoisans Want Real Pension Reform

We don’t talk about Illinois’ state and local pension crisis enough. But we feel the ways it affects us twice a year when we get our property tax bills.

Illinois’ state pension debt now stands at $140 billion. That’s $9.8 billion more than it was in 2021. Local government pension debt is worth an additional $70 billion across Illinois. Even though Illinois’ unfunded pension liabilities are growing at a rapid clip, reporting from the Illinois General Assembly’s Commission on Government Forecasting and Accountability shows state lawmakers are planning to underfund the state’s pension contribution by more than $4.4 billion in fiscal year 2024. 

Illinois’ pension crisis drives up property taxes across the state (especially in Chicago), siphons resources away from other critical government services, and creates a cycle of perennial tax hikes and deficit spending. 

This isn’t news to anyone keeping track of Illinois’ fiscal challenges. But thanks to new polling data, we now know how Illinoisans truly feel about the state’s pension problems. 

The new poll from Echelon Insights in partnership with the Illinois Policy Institute shows Illinoisans prefer pension reform 3-to-1 over tax hikes and service cuts. 

Here’s the exact wording of the question: “When it comes to public-sector pensions for government workers, which of these statements do you agree with more, even if neither is exactly right? Illinois should …”

• Amend the State Constitution to preserve retirement benefits already earned by public employees and retirees, but also allow a reduction in the benefits earned in the future by employees and allow for slower growth in retirees’ future benefits. 
• Raise taxes or reduce state spending on higher education, public safety, and social services to fully fund the state’s pension obligations to government workers. 

Fifty-six percent of respondents supported the pension reform position, compared with just 18% of respondents who supported tax hikes and service cuts.

For decades, Illinoisans have seen state lawmakers pass surface reforms that simply delay the state’s pension challenges. Illinoisans have also seen state courts strike down any meaningful pension reforms because of the Illinois Constitution’s extreme pension provision, which has been interpreted to mean pension benefits are prioritized above all other government spending. This poll indicates the majority of Illinoisans are not OK with the status quo. 

Beyond indicating support for pension reform, 57% of respondents also said they don’t believe their property taxes are worth the cost “because they don’t provide the same value in public services and benefits in return.” Only 31% of respondents said their state tax burden was worth the cost. 

There’s no avoiding the truth: Illinoisans want reforms. 

Yet despite the realities of Illinois’ pension crisis, and the clear desires of Illinois taxpayers, state lawmakers are poised to enact more pension “fixes” that will only exacerbate pension problems. 

State Sen. Robert Martwick is currently sponsoring a bill that would increase pension benefits for some of Cook County’s pension funds. Martwick and the bill’s proponents state these pension increases are necessary to bring them in line with federal law, but don’t know what their proposal will cost or if it would actually satisfy the federal mandate. When pushed, Martwick simply said it would cost “billions.”

Public sector workers deserve fair retirement benefits. But if Martwick’s bill passes, it would be another example of Illinois lawmakers promising government workers benefits without knowing the price tag, but that taxpayers likely can’t afford, that government can’t sustain and that the Illinois Constitution forbids us from taking back. 

Illinois’ pension crisis is complicated, multi-faceted, and has a long history. But the solution is straightforward, and most Illinoisans are on board. 

Every year, we hear about the state’s pension problems. But during the past few decades, little has changed, and the problem has only gotten worse. So, no matter how much we talk about pensions, until state lawmakers listen and start solving the problem rather than adding to it, the conversation has to carry on. 

Bryce Hill is the director of fiscal and economic policy at the Illinois Policy Institute.