You're a family in Illinois
Your family's share of the state's retirement debt is
$35,000.
That's a new car. Or a year's college costs. Or a year of mortgage payments.
Illinois has about $167 billion in retirement-related debt. Here's how it breaks down:
- The state's pension funds are short $97 billion.
- But there's also at least $54 billion in unfunded retiree health care costs for state employees.
- AND - about $16 billion in pension borrowing since 2003 that we still have to pay off.
Who is responsible for paying this debt? The people of Illinois.
You're a student in Illinois
Your tuition payments are probably going up. But at least you're in school. When
you graduate, your chances of landing a job may be a lot slimmer.
Companies do not relocate or expand in states with uncertain financial futures.
In some cases, they leave.
The $167 billion in retirement-related debt and unfunded obligations – and the fact
that we have not demonstrated the political will to address them – is the greatest
obstacle to attracting businesses to our state and to growing the businesses we
already have.
It’s a big reason there are fewer jobs available. National employment data shows that Illinois trails the nation in recovering from the “Great Recession.” Our state’s unemployment rate was 8.6% at the end of 2012 – well above the national average of 7.8%.
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Why is the pension crisis making it harder to find a job?
Because Illinois’ uncertain fiscal future is slowing down our state’s recovery from the Great Recession.
Source: “Illinois governor to bear grim news over pension crisis,” February 2013, Reuters,
http://www.reuters.com/article/2013/02/05/us-usa-illinois-pensions-idUSBRE91416420130205
“Local Area Unemployment Statistics,” December 2012, Bureau of Labor Statistics
http://www.bls.gov/web/laus/laumstrk.htm
“Economy at a Glance,” United States Monthly Data, March 1, 2013, Bureau of Labor Statistics
http://www.bls.gov/eag/eag.us.htm
Our neighboring states – Indiana, Wisconsin, Iowa, Missouri and Kentucky – all had lower unemployment rates. Illinois ranked 42nd out of the 50 states and the District of Columbia.
You're a business owner in Illinois
You have fiscal responsibilities and obligations. The state seems to have forgotten
that it does too. It delays payments to vendors. It has borrowed billions to cover
current costs. It has engaged in reckless fiscal behavior. If you did these things,
you'd be out of business.
The combination of shrinking resources, rising taxes and massive debt has made Illinois one of the least attractive states to do business. Illinois ranks
#48 out of 50 states.
Our neighbor, Indiana, ranks #5, while Wisconsin and Iowa rank #20 and #22, respectively.
You're a taxpayer in Illinois
State law says the pension funds must be 90% funded by 2045. That's going to take more and more tax dollars each year. You'll have to pay. So will your children and grandchildren. Because the growing state tax burden is likely to become even bigger.
In January 2011, lllinois' massive debt was one argument used to justify raising personal income taxes by 67% and business taxes by 46%. Lawmakers promised the tax hike would expire in a few years. But that's very unlikely to happen.
The tax increase did not take care of the state's cash budget gap. In fact, our unpaid bills are growing. Meanwhile, unfunded pension costs are escalating so rapidly that there's no way this or any future tax increase can begin to solve the problem.
You're a teacher in Illinois
You've worked hard, and paid into your pension fund. But the fund doesn't have enough money to pay for the benefits you've earned. The Teachers' Retirement System was only 41% funded in fiscal year 2012.
There's not even enough money in the fund to pay all the benefits owed to current retirees. Where will the money come from to pay for your retirement?
The numbers simply don't add up.
You're a state worker in Illinois
You've been paying into your pension. You've been doing your job. But your pension fund is in bad shape. Illinois has the worst-funded pension plans in the nation.
The highly respected Pew Center on the States says that Illinois' state retirement plans are last among all the states. Dead last.
The Commission on Government Forecasting and Accountability, the state agency responsible for reporting on the fiscal condition of the state’s five pension plans, reported that the five state pension plans were only 39% funded at the end of June 2012 using the market value of plan assets.
Right now, there's not enough money to pay for your retirement. NOT ENOUGH MONEY. Politicians promise to put in enough in the future to make up for the shortfall. How is that going to happen with our state's budget problems? If there's not enough money when you retire, you won't get the check you expected.
You provide a social service in Illinois, or depend on one
You're feeling the squeeze. Especially if you rely on state funding.
Annual pension contributions are consuming tax dollars*, and taking resources from critical public services such as schools, social service agencies and health care for the poor, elderly, and the disabled. Programs that improve our quality of life, such as parks and public safety initiatives, are facing cuts too.
As the state falls further behind paying its bills, more and more non-profits are
forced to reduce services, deplete reserves, or go out of business.
As services shrink, the need for those services continues to grow.
Please go back to the questions and select options that apply to you.