PRESS RELEASE: Illinois’ extreme outlier status on debts, taxes and out-migration highlights the need for pension reform, new study finds
Wirepoints’ 50-state survey shows pension costs contribute to making Illinois the nation’s extreme outlier.
Each Illinois household is burdened with $50,000 in state pension debts, the most in the nation, according to a new analysis of Moody’s Investors Service pension data by Wirepoints. And when local pension and state retiree health debt is included, the debt owed by every single Illinois household rises to $90,000 each.
That’s one of the key findings in “Illinois is the Nation’s Extreme Outlier,” part one of Wirepoints’ new Special Report: “Solving Illinois’ Pension Problem: Why It’s Legal, Why It’s Necessary, and What it Looks Like.” This new study makes the case for pension reform and lays out a comprehensive plan for restructuring Illinois’ retirement debts. Wirepoints’ report will be released in four parts over the next four weeks:
- Part 1: Illinois is the Nation’s Extreme Outlier
- Part 2: Illinois Pensions: Overpromised & Overgenerous
- Part 3: Why Pension Reform is Legal
- Part 4: A Solution for Illinois’ State Retirement Crisis
“It doesn’t matter what side of the aisle you’re on, the fact is Illinois is the nation’s extreme outlier” says Ted Dabrowski, President of Wirepoints. “We have the largest pension debt burden. The worst population losses. The highest property tax rates. The worst political corruption. And we’re the ‘least tax-friendly state’ in the nation, according to Kiplinger. More tax hikes will only make those problems worse. Illinois needs pension reform instead.”
“Illinois is the Nation’s Extreme Outlier,” includes a 50-state analysis detailing Illinois’ outlier status and the negative impact that status has on people’s lives and livelihoods.
The following are some of the facts included in Wirepoints’ report:
- Illinois’ current retirement costs consume 26 percent of the budget – the most in the country by far. And if the state paid its true actuarial costs, retirements would take up 51 percent of the budget.
- Illinoisans pay the highest property taxes in the nation, according to Attom Data Solutions. At 2.2 percent, Illinoisans pay more than double the rate of their neighbors in Indiana (0.9 percent) and Missouri (1.0 percent).
- U.S. Census data shows Illinois has shrunk more than any other state in the nation. Since 2010, the state’s population has declined by 170,000 people. Illinois is just one of four states to lose population nationally.
- Illinois has lost a net average of 62,000 tax filers and dependents and $2.8 billion in adjusted gross income (AGI) to out-migration annually since 2000, according to IRS state-to-state migration data. In total, Illinois has suffered a cumulative loss of $410 billion in AGI since 2000.
- Illinois’ credit rating has been downgraded 22 times in the last 11 years by the big three rating agencies. The state is rated just one notch above junk, the lowest in the nation. No state has ever been rated junk.
- Illinois median home values have grown just 11 percent since 2005, the 6th-worst growth nationally, according to U.S. Census data. That’s far short of inflation, which was up 30 percent over the same period.
“Either Illinois at long last embraces pension reform or its fiscal crisis will become a calamity” says Wirepoints Executive Editor and Founder Mark Glennon. “That the pandemic and recession have made pension reform imperative is now far beyond any reasonable doubt.”
Read “Part 1: Illinois is the Nation’s Extreme Outlier” at: https://wirepoints.org/part-1-illinois-is-the-nations-extreme-outlier/
Wirepoints is an independent, not-for-profit organization dedicated to connecting the dots between our economy, government and people. Based in the Chicago metro area, the Wirepoints team provides original research and commentary about Illinois’ economy and government. Its research has been cited by The Wall Street Journal, New York Times, Forbes, Barron’s, Crain’s Chicago Business, and the Chicago Tribune, among others. Find more of Wirepoints’ original analysis and commentary at wirepoints.org.