Report: Unfunded pension liability has every Illinoisans on hook for
$37,000
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[September 21, 2023]
By Greg Bishop | The Center Square
(The Center Square) – Every man, woman and child in Illinois is on the
hook for $37,000 for the state’s unfunded public pension liabilities,
according to a new report.
The seventh annual American Legislative Exchange Council's
"Unaccountable and Unaffordable" report on public pension liabilities
pegs the amount of debt across the nation at nearly $7 trillion.
Illinois comes in second to last.
“We see the liabilities are truly in a really scary scenario for
Illinois for the future, looking at nearly $37,000 in unfunded
liabilities for every man, woman and child in the state of Illinois,”
said Jonathan Williams, ALEC’s executive vice president of policy and
chief economist, explains.
That’s behind only Alaska’s per capita cost of $46,000. In contrast,
Tennessee, the state with the lowest per capita cost for public sector
pensions is around $7,700. Illinois neighbor Indiana is second with
$8,000 per capita.
![](http://archives.lincolndailynews.com/2023/Sep/21/images/ads/current/chicagost_sda_FOOTBALL_2023.png)
Illinois also came in second worst for overall unfunded liability and
funding ratio.
“So I guess if there’s something to be said, there’s consistency at the
bottom of the rankings for Illinois in all of the categories we look at,
Illinois is among the worst in the nation,” Williams told The Center
Square.
While the Illinois Auditor General puts Illinois’ five state-run public
sector pension unfunded obligations at $140 billion, Williams said when
considering pensions they’ve reviewed across the state, the total
liability approaches half-a-trillion dollars using their criteria.
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![TCS - A chart of pension costs per capita produced by the American Legislative Exchange Council](../images/092123PIX/650b5ae3ebbed.image_small.jpg)
A chart of pension costs per capita produced by the American
Legislative Exchange Council.
American Legislative Exchange Council
![](http://archives.lincolndailynews.com/2023/Sep/21/images/ads/current/dare_lda_FOOTBALL_2023.png)
Some states have done good work in shoring up their costs through a
variety of ways.
“The risk is shared not just among taxpayers but workers as well who
need to increase their own contributions to the plan in their
investments fall short of their goal,” Williams said. “So, we’ve seen
some really innovative ways that states have begun to tackle
liabilities.”
States with large unfunded liabilities left unresolved will have
difficult decisions to make, Williams said.
“This is an issue that is going to cause, I think, widespread tax
increases, widespread cuts to government services or a mixture of the
two,” he said.
Illinois spends $1 out of every $5 it collects in taxes for pensions.
Williams also warned of "politically motivated investment schemes" he
said "are also a growing threat to the solvency of state pension funds."
"These strategies reduce investment returns over the long term, which
leads to underfunding in state pension plans across the country with
taxpayers ultimately footing the bill for the shortfalls," he said.
![](http://archives.lincolndailynews.com/2023/Sep/21/images/ads/current/ldn_sda_NILA_012823.png) |