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Illinois

Illinois taxpayers carry the third highest debt burden in the nation


Truth in Accounting experts disputed Gov. JB Pritzker’s claims that Illinois was on its best fiscal footing in years, citing chronic underfunding of the state’s leading pension debt. Financial regulators ranked Illinois’ finances the third-worst among US states.

Watchdog auditors are questioning Gov. JB Pritzker’s claims that Illinois is on its best fiscal footing in years, arguing that his five-year economic forecast report grossly understates the state’s looming long-term financial liabilities.

Experts from Truth in Accounting examined state financial reports for fiscal year 2021 to find that Illinois failed to pay its $210.5 billion in bills, leaving each taxpayer responsible for $49,500 in debt . Illinois ranked the third worst in the country, rating an “F” for financial management.

The auditors found that Illinois has underfunded government employee pensions by about $4 billion each year, pushing up annual interest on the state’s $130 billion in pension debt, which Moody’s Investors Service estimates using more realistic estimates Assumptions estimated at $313 billion.

While Pritzker touted his office’s economic and fiscal policy report as evidence that the legislature “meets our commitments on long-term financial liabilities” and “makes additional contributions to Illinois’ pension systems,” the watchdogs’ accountants said that was misleading.

The group likened Pritzker’s boast to “a person who announces they won’t be spending more than they make, but only pays $1,100 a month to their credit card companies, while the minimum payments are $1,500.”

Pritzker’s economic report also predicts that pension contributions will consume only about 21% of the annual budget over the next five years for three of the five state systems, significantly less than in recent years. Funding all five systems eaten up 27 cents of every dollar the state spent in 2022.

Illinois pensions can be fixed, but not by feel-good distortions of economic realities. Reforms are required that can only be made by amending the Illinois Constitution.

The “keep harmless” pension reform developed by the Illinois Policy Institute would tie all retirement cost-of-living adjustments to inflation rather than a fixed annual growth rate, saving $50 billion by 2045. It would also increase the required state contributions to fully fund the promised pensions of retirees rather than the current target of 90% by 2045.

Constitutional pension reform would promise to slow future growth of Illinois’ nation-leading debt and give more money back to taxpayers today.

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