Waste of the Day: Ill. Wants to Increase Pensions Amid Staggering Debt
Topline: A bill currently in the Illinois state legislature would increase pension payouts, costing taxpayers an extra $5 billion over the next several years, according to The Center Square.
Key facts: Faced with a crippling amount of debt, Illinois reformed its pension system in 2010 by creating “Tier II” pensions. Any state worker hired after 2010 receives reduced benefits and must work longer to receive the full payout.
Many labor unions feel the state went too far by reducing benefits, leading to protests outside the Capitol Building in November. Most Illinois employees’ pensions replace their Social Security checks, and they’re worried their pensions will pay less than Social Security — which would violate federal law.
Illinois legislators gave in and began talks to increase pensions, but they seem to be forgetting the state still has no way to pay its existing debt.
Illinois’ pension system was underfunded by $210.8 billion as of June 2023, according to Equable.org. Only California, whose population is three times larger than Illinois’, had a greater shortfall.
Illinois’ pension debt is equal to 21% of its gross domestic product, Equable reported. No other state has pension debt above 16.2% of its GDP.
Background: It’s no wonder Illinois is having issues when its pensions are among the largest in the nation.
Last year, 3,479 Illinois retirees collected pensions above $100,000. There were 218 retirees with pensions above $200,000. Sadashiv Parwatikar, a former psychiatrist for the Department of Human Services, topped the list with a $252,000 payout.
Every Illinois state pension dating back to 2018 can be viewed at OpenTheBooks.com.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Supporting quote: “When it comes to state pensions, both Republicans and Democrats need to look in the mirror and admit a hard truth. Republicans need to realize that while pensions are still a big line item in the budget, the problem is getting better, not worse,” state representative Mark Batinick told the Chicago Sun-Times.
“Pension costs are declining as a percentage of the budget. We are healing. Democrats need to realize that much of the money that has been available for new spending the last few years has come from that healing, not budget magic.”
Summary: State employees are of course entitled to fair compensation, but billing taxpayers even more is not the pension reform Illinois needs.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
