I divided Illinois’ population of about 12 million by the 2016 pension stats of about 208 billion, as anyone here can easily do online. Actually, the numbers are even worse now, two years later.
The Chicago Fed has already announced their solution to the pension catastrophe – raise property taxes – i.e. peoples’ homes.
can’t believe that a plan could not have been devised which would be forever pegged to indices such as income, rising property valauations (i.e., reducing property owners’ available income to pay pensions), even inflation’s impact.
One graphic perfectly captures the absurdity of Illinois pensions over the past three decades.
It’s what Justice Samuel Alito described as Illinois’ “generous public-employee retirement packages” when writing for the majority in the Janus v. AFSCME decision. Alito didn’t use this graphic but he could have, because it makes his point.
In 1987, pension promises made to active workers and retirees in the state’s five state-run pension plans totaled just $18 billion. By 2016, they had ballooned to $208 billion.
That’s a cumulative 1,067 percent increase.
Contrast that to the state’s budget (general fund revenues) which was up just 236 percent over the same time period. Or household incomes, which were up just 127 percent. Or inflation, up just 111 percent.
Promised pension benefits have blown past any ability of the state, the economy or taxpayers to pay for them.
Read the report: Illinois state pensions: Overpromised, not underfunded
Wirepoints released a report on these booming benefits earlier this year, and while it received strong coverage online nationally, Illinois’ traditional media didn’t want to touch it. The findings interfere with the narrative that’s repeatedly promoted by public sector unions and politicians – that the crisis is all the taxpayers’ fault for failing to put in enough money towards pensions.
The report proved a lack of dollars wasn’t the issue. Illinois pension assets – buoyed by taxpayer contributions – also grew far faster than the same economic indicators in the graphic above. But taxpayer contributions could never keep up with the state’s explosive growth in promised benefits.
Overpromising is the real culprit of the pension crisis. Freezing and reversing that growth in promised benefits is the fair, and only, way to fix things.
The above graphic gives taxpayers every right to demand concessions from their public servants. The Janus ruling will hopefully give them more power to demand them.
And union members have a strong incentive to come to the bargaining table. After all, it’s their retirements that are teetering on the edge of insolvency in a state just one notch from junk status.
But If the unions won’t deal, Illinois should go ahead and freeze salaries, cut the subjects of collective bargaining, move to defined contribution plans, reduce headcounts and work with the feds on a form of state bankruptcy. With the constitution currently preventing any changes to pension benefits, those are the only levers taxpayers have to save this state from collapse.