By: Ted Dabrowski and John Klingner
More pension sweeteners for government workers. Worth billions. That’s what some Illinois lawmakers want to squeeze into the state budget negotiations this week just as their session comes to an end. State Rep. Jay Hoffman has just amended a bill that would increase retirement benefits for tens of thousands of Tier 2 government employees – those hired after 2010.
The costs, of course, will fall on taxpayers. Whatever obligations those sweeteners create will be added to the $172 billion pension shortfall Illinoisans will be forced to pay down over time. And that amount doesn’t include the additional billions that local governments also burden Illinoisans with.
Sweetening pensions – a lower retirement age, bigger pensions and bigger colas – is the exact opposite of what Illinois lawmakers should be doing. A state that’s the nation’s extreme outlier on pension debts and property taxes – and that has some of the country’s worst economic growth and loss of residents – should instead be pushing for a constitutional amendment that allows for pension reform. And for getting defined contribution plans in place for new government workers.
The way that Illinois politicians have doled out pension benefits over the decades should make it obvious lawmakers aren’t concerned about the harm they inflict on everyday Illinoisans. Those overpromised benefits, rising costs and subsequent debts have driven up taxes and choked out growth.
And with the latest proposal, lawmakers show they don’t care about just how much Illinoisans are increasingly squeezed. Illinois’ metro areas dominate the nation’s top-10 list for highest property taxes. Rockford, Chicago, Peoria and Champaign-Urbana occupy positions #1, #2, #3 and #4. Springfield ranks #6. Overall, Illinois has the highest effective property tax rates in the country, according to ATTOM Data Solutions.
Lawmakers also don’t care that Illinois metros lag the rest of the country in economic growth. Bloomington’s GDP growth since 2019 is dead last among the nation’s 384 metro areas. Rockford (ranked 367) is not far behind, and neither is Danville (312) or Peoria (309). Overall, Illinois’ real GDP growth since 2019 ranks 4th-worst nationally.
Nevertheless, lawmakers are determined to give Tier 2 workers more benefits. Their proposal lowers retirement ages, increases the maximum salary that pensions are based on, boosts the starting pension formula and increases cost of living adjustments. If lawmakers give the unions what they want, it could cost taxpayers as much as $76 billion.
It’s perverse. Illinoisans are forced to sacrifice their own standard of living to pay for the guaranteed raises, multi-year contracts, protected lifetime pensions and heavily subsidized healthcare of government workers, while receiving no protections or guarantees of their own.
In many ways, everyday Illinoisans are now subservient to their so called “public servants.”
You may hear lawmakers claim these sweeteners are necessary due to federal requirements – that Tier 2 pensions are too low for some workers – but that’s nothing more than a pretext for their next giveaway. Lawmakers have presented no proof that Tier 2 pensions are too low, and the sweeteners they’re proposing go far, far beyond the cost of any supposed “fix.”
While the proposed increases for Tier 2 workers mostly involve state pensioners, count on lawmakers to spread the wealth sometime soon. They’ll make sure that Tier 2 workers in local governments across the state get their sweeteners, too.
That’s bad news for residents in cities like Danville, which has already imposed a special fee on residents to shore up its nearly insolvent police and fire funds. And Danville is not alone. Dozens of cities across the state have police and/or fire pensions that are half-funded or worse.
Chicagoans are most at risk from new sweeteners – the city’s plans are already less than a third funded, with total pension debts amounting to more than $53 billion, or $45,000 per household.
Lawmakers’ willingness to sweeten pensions despite the damage they’ll do is emblematic of our politicians’ unabashed favoritism towards government unions.
Until taxpayers come first, Illinois will continue to lose ground economically, demographically and politically to the rest of the nation.
Read more from Wirepoints:
- Illinois lawmakers shouldn’t burden taxpayers with Tier 2 pension “fixes” until they know what they’re doing
- Video: Here come more pension sweeteners…(aka tax hikes)
- More than $1 billion in market losses is a reminder of how close Chicago pensions are to the brink
- Illinois pension debts hit $144 billion in 2024, make a mockery of politicians’ decades of ‘balanced budgets’
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
The political animals aim was lower than the jaw.
So we have one party to blame for pushing the state into the sewer over the past several decades. We can’t afford the pensions period. They should have drawn a line in the sand and said “after this date, state employees will be offered 401k plans.” The rest of us have worked our entire careers to pay for their pensions and try to save for ourselves. The state is now unlivable. Chicago’s control has made it Hellinois.
“So we have one party to blame for pushing the state into the sewer over the past several decades. We can’t afford the pensions period.” Which party do you mean? The party that sponsored the pension amendment that is now part of our constitution? Maybe it was the party that wanted to add 3% annuity increase even during times of low inflation? Perhaps it was the party that championed delaying funding for pensions by shorting them with the plan to massively increase funding in later years? Personally I don’t think this is the result of one party but you are… Read more »
The only way to stop a play is to tackle the guy who has the ball. Standing around screaming about the quarterback who threw the pass doesn’t do a lot of good.
Agreed PP. Look at us finding common ground. That’s why it is so perplexing when people such as Life Time start talking about blaming a political party. It serves no purpose when both parties are responsible. However, if people are going to display their ignorance to the subject matter I’m more than happy to help educate them as I’ve done with you many times. It’s just like pensions. There is no point in screaming about the cost of pensions when we need to tackle the problem of not setting aside enough funding. We need to work on reducing other expenses… Read more »
So glad my kids got out.
Rape the goose before it dies and it will die soon. The numbers are so out of line they stand no chance of ever digging out of this hole.
But that’s what we want! claim some. Because we don’t watch them like a hawk as they slide stuff like this past the taxpayers at 2 am, we deserve it! Right?
If unions expect eventual bankruptcy, won’t the pension increases enlarge their share of the bankruptcy estate? So what’s the downside here from the public employee perspective? Unions will always ask for more and conflicted legislators will see their own pensions grow “to keep up.” The sooner the bankruptcy, the better-off the taxpayers.
Unions are increasing their share of the finite pot that will remain after the last kick of the can.
How they still claim to be the party that’s fighting for the ‘working class” and “equity” would seem their greatest moral & philosophical dilemma?
To borrow from a comment from The Railroader, the Dems are fighting for the working class (the public-sector working class).