Illinois’ pension crisis continues to deepen, with the state’s unfunded pension liability reaching $143.7 billion, according to the latest report from the Illinois Commission on Government Forecasting and Accountability (COGFA). This figure is $1.5 billion higher than last year and marks the second-highest total since 2020, when the liability hit $144.2 billion.
Despite these alarming numbers, Gov. J.B. Pritzker remains optimistic. On Wednesday, he defended the state’s pension management, stating, “Our funded ratio for our pensions is much better today than it was when I took office, and it continues to go in the right direction.” When Pritzker took office in 2019, the funded ratio was 40.3%; today, it stands at 46%. However, actuaries recommend a funding level of 100% for a fully healthy pension system.
Wirepoints President Ted Dabrowski criticized the state’s approach, arguing that record-high investment markets haven’t offset taxpayer burdens. “That’s really the result of politicians having done zero to make things better for taxpayers,” Dabrowski said.
COGFA projects that taxpayer contributions to the pension system will rise significantly, from $11.2 billion in 2024 to $18.5 billion by 2045. Although the funding ratio is expected to gradually increase, the unfunded liability is forecasted to hover around $144 billion until 2032, when it may begin to decline to $139.2 billion. By 2045, the liability is projected to drop to $34.2 billion, achieving a 90% funding ratio.
Dabrowski also noted that independent bond rating agencies estimate Illinois’ pension liability to be even higher. He warned that poor pension policies impact not only the state but also local governments, which are raising taxes to meet local pension obligations. “We don’t send any good signals to the public or the rest of the country as far as us being an economic growth engine because we refuse to touch pensions,” he said.
Addressing the pension crisis is complicated by the Illinois Constitution’s pension protection clause, upheld by the state Supreme Court. Reforming the system would require a voter referendum to amend this clause, a politically challenging feat.
