Illinois lawmaker: Property taxes will 'go to Mars' if teacher pensions aren't addressed

[February 10, 2023]  By Andrew Hensel | The Center Square

(The Center Square) – An Illinois lawmaker is warning of even higher property taxes if costs surrounding the Illinois Teachers' Retirement System are not addressed.

The Illinois House Personnel and Pensions Committee met virtually with Illinois Teachers' Retirement System representatives Thursday to get an update on the statewide pension fund.

TRS currently has a total unfunded pension liability of $80.6 billion among two different tiers of employees. Tier 1 is for those in TRS before 2011, and Tier 2, with fewer benefits, is for those hired after 2011.

State Rep. Steven Reick, R-Woodstock, said if unfunded liabilities fall on the school districts to be paid, residents of Illinois will see an increase in their property taxes.

"If we wait until 100,000 of those 144,000 [retired teachers] are coming screaming at our doors saying, 'hey, I want my money,'" Reick said. "If it all falls on local school districts, our property taxes are going to go straight to Mars."

Illinois residents already pay the second highest property taxes in the U.S.

Andrew Bodewes, a spokesman with TRS, was asked by lawmakers which taxing body will be responsible for covering the unfunded pension liabilities, but he was unable to give a clear answer.

"We have sort of a weird bifurcated definition of an employer where it is sometimes kind of the state and sometimes the school district when we are talking about employment security," Bodewes said. "That's why I do not want to give you an ironclad promise on that."

Bodewes said inflation, which reached a 40-year high last summer, affected their pension system.

"We do not grow at that same rate," Bodewes said. "That's probably the weakness in our plan, is our salary cap. The more that Social Security wage base grows, the faster that differential becomes a problem."

Reick said they owe it to the teachers to devise a solution to their debt problem.

"We have 144,000 teachers who are going to be affected by this ultimately, and the sooner we get to an answer on this, the better off we will be," Reick said.

The TRS total unfunded liability increased 0.85%, up from $79.9 billion in FY 2021.

Andrew Hensel reports on issues in Chicago and Statewide. He has been with The Center Square News since April of 2021 and was previously with The Joliet Slammers.