SPRINGFIELD, Ill. (WTVO) — Growing piles of pension debt are forcing some cities in Illinois to cut back on public safety expenses like police and fire departments.
Politicians haven’t taken much action to reform the state’s pension system since a Supreme Court ruling in 2015. Today, policy experts and lawmakers hosted a panel discussion to look at potential solutions.
The Supreme Court and Governor J.B. Pritzker have both said pension benefits are a promise and they have to be paid.
They say in life there are no guarantees, but in Illinois there are two: pension benefits for state workers can only grow larger, and that growing cost adds increasing pressure for government to cut the core services it provides.
Experts on a panel Monday said that pressure could be one major factor driving outmigration in our shrinking state.
We are losing population in Illinois.
Experts on a City Club of Chicago panel issued a stark wakeup call, warning the state’s biggest challenges tie back to one thing:
“We are on that ramp, which is why you see our pension costs going through the roof right now,” said Sen. Heather Steans (D-Evanston). “That means we can’t be investing in education, human services, public safety, all the things we care about.”
Unfunded pension liabilities total $341 million in Rockford, $273 million in Peoria, $128 million in Decatur, and $111 million in Danville, which is just 16 percent funded.
The state pension debt is $130 billion dollars — a number so big, policy wonks struggle to find solutions.
Can we pay our way out?
No, is the short answer.
“We’d have to go from spending 26% of our budget on pensions to 51%,” said Adam Schuster of the Illinois Policy Institute.
“If you wait for a constitutional amendment to get on the ballot and passed, I don’t think we solve this problem,” said Steans. “One, you’re going to have to get past through the legislature, which is not at all sure that you could do.”
There’s no reason why you wouldn’t do that,” said Laurence Msall, who heads the Civic Federation. He says there’s no harm in the Chicago Tribune Editorial Board’s call to put the question to voters.
“At least just put the question on the ballot to just curb the growth of the pensions,” said editorial board member Kristin McQueary. ”Nobody is talking about eliminating pensions.”
And for good reason…
This is their retirement.
“Teachers do not collect or pay into Social Security in Illinois. You’re talking about peoples’ life savings,” said Dan Montgomery with the Illinois Federation of Teachers.
“These sort of cockamamie ideas about ‘let’s amend the constitution and write off debt’, it’s not going to work. It will not work,” Montgomery said. “So, we should not tie things up in the courts and we should find ways lawfully to address this debt.”
Whether on the ballot or in the statehouse, Msall says Illinois can’t afford to put this off any longer.
“Nobody is going to fix Illinois’ financial recklessness for us,” he said. “We are going to all have to jointly sacrifice and participate.”
Consideration, consolidation, or an economic downturn could force the issue
Economic downturn could wipe out the pension funds by 2039.