Illinois Is Broke - and public employee
retirement programs are at the root of the problem.
Unfunded retiree-related obligations for
public employees and retirees in State pension plans now total over $130
Billion - more than $25,000 per Illinois household. The funding requirements
for these programs are growing - totaling Billions of dollars each year and
squeezing out money for education, health care, and other important programs.
State employees can retire at 55, if they
have 30 years of service or more, with full pensions. (The State also pays 100%
of their health care premiums.) Because life expectancy is now in the low 80's
- these payments will be made over a very long period of time, making them very
The average value of this pension benefit for
a retiree at 55 who has worked a full career for the State is about $1 million.
The health care benefit adds another $400,000.
Elected officials put these generous programs
in place but didn't fund them. Illinois has the worst funded pension systems in
the nation. Experts predict that some State pension funds may run out of money
in as early as 9-10 years.
So what can be done about it?
"Just raise taxes" is the wrong
answer. The State should make reasonable reforms to State retirement benefits
going forward, such as requiring State workers to retire later and contribute
more toward their benefits - just like most taxpayers.
If all Illinois did was raise taxes to cover
the State's budget shortfall, including the annual costs of these generous
pension and retiree health care plans, the personal income tax rate would have
to increase from 3 to 8%.
If you agree with us, please visit www.IllinoisIsBroke.com
and send an email to your elected representatives and candidates for office.
We are a non-partisan campaign, including
civic and business organizations and social service agencies, that have come
together to make the public aware of the State's fiscal crisis - its causes and
some needed solutions.