It seems $100,000 is a good benchmark for prosperity: it’s something to strive for that is within reach when the average Illinois salary is $69,020.
Apply that amount to taxpayer-supported retirements, and it is less a mark of prosperity and more a sign of excess.
The Illinois Policy Institute regularly has looked at the $100,000 mark to measure the five statewide government retirement systems. A decade ago, there were over 12,000 retirees getting at least that amount in retirement income. Now, there are nearly 32,000 in the $100k club.
An extra 20,000 government retirees making that much is a sign Illinois’ public pension systems are out of control. Plus, there are many more state retirees getting close to that benchmark: the state’s 239,384 pensioners now average $93,558.
Other numbers from a decade apart also show how bad it is.
In 2015, the state put $6.9 billion into pensions. Last year it was approaching double that: $13.2 billion.
But state lawmakers and governors, even at those high amounts, are not keeping up with feeding the pension beast. In 2015 there was a $111 billion gap between what the five pension systems had and what they would eventually need. Now that pension debt has grown to $143.7 billion by the state’s accounting, but ratings agencies have estimated the real debt may be over double that.
All those numbers are pretty meaningless until you realize: our state leaders have obligated every single one of us to eventually pay $11,300 in addition to all our other taxes so government retirees get what they were promised.
That’s a hefty amount in the state where residents already carry the nation’s No. 1 state and local tax burden. And it’s downright maddening when you compare your own retirement.
State retirees were paid on average $24,538 more than is earned by the taxpayers still working to support them.
State retirees contribute $128,840 over 30-plus years to their retirements but see average lifetime payouts of $2.48 million. Private-sector taxpayers will have nest eggs of $609,230 by retirement age and live on that plus about $22,344 a year from Social Security.
State pensioners’ average retirement age is 58. Those taxpayers will work until at least age 65.
None of the state retirees is to blame, but the politicians who gave away so much in exchange for campaign cash from the public unions and who pushed off the pension debt into ever-growing future liabilities sure are. At least one of them – former Illinois House Speaker Mike Madigan – is paying for some of his quid pro quo deals, but not for this one.
Others remain in the Illinois General Assembly. They owe Illinoisans a make-good.
Those who didn’t cut the deals have an opportunity to distance themselves from the cronyism and to do right by the people who trusted them to represent their best interests.
How? Put public pension reform on a statewide ballot.
It will take an amendment to the Illinois Constitution because the last time lawmakers tried to tame the beast in 2013, the Illinois Supreme Court shot it down. The justices ruled the pension protection clause of the state constitution protects not only earned benefits, but all potential future benefits as of the date an employee is hired by the state.
They also noted state lawmakers could simply raise taxes to meet the obligations. Remember the math above? That would mean taxes of $11,300 from each Illinoisan.
If state lawmakers let Illinoisans vote on the issue, it will surely pass. Polling showed 61% of voters in favor and when six townships in November and April asked their voters, huge majorities backed the change.
And once those changes are allowed, they would be modest. They would control the growth of future, unearned benefits without taking away anything retirees already have. They would tie benefits to simple inflation instead of a compounding, fixed rate.
The alternative is continuing to see government retirement costs push college tuition higher, push property taxes higher (when we are already No. 1 for the nation’s highest property tax rate) and eat more of the government resources we expect to keep us safe and to keep the roads smooth.
Oh yeah, and getting babies, children, working adults and retirees to each pay that $11,300 tax bill.
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