It’s no secret that Illinois’ pension system has been financially compromised for decades due to no fiscal restraint and an unyielding appeasement of workers (i.e. voters).
At 39% funded, according to the nonpartisan Pew Charitable Trusts, Illinois has the worst pension funding ratio of any state. By contrast, neighboring Wisconsin’s pension system is 103% funded. In fiscal year 2022, Illinois’ total general funds pension costs, including pension bond debt service, will consume $10.5 billion. That’s more than 25% of the state’s general revenues, and is just a fraction of the nearly $130 billion in total unfunded liabilities the state pension systems hold, according to a news report.
Illinois households are paying the third-most in the U.S. for state pension debt. An Equable Institute study of 225 statewide pension systems’ market returns in 2023 found three of Illinois’ five state-run retirement systems were among the 10 worst-funded systems nationwide, according to a news report.
Remarkably a small baby step toward some financial sanity in the state managed to move forward due to a recent Illinois Supreme Court ruling upholding the constitutionality of a pension reform law that consolidates pension systems to reduce costs.
“We ushered in a new era of responsible fiscal management, one aspect of which has been consolidating over 600 local pension systems to increase returns and lower fees, reducing the burden on taxpayers and keeping another campaign promise. Today’s Supreme Court ruling is a victory for Illinois taxpayers, local governments and first responders,” said Gov. J.B. Pritzker in a news release.
Notably, Chicago’s pension system isn’t included in this pension reform. Chicago alone faces more pension debt than 44 states.
Make no mistake this small victory isn’t a panacea. If Illinois continues to spend more than it can afford, no amount of cosmetic change will keep the system from ruin and negatively impact the state’s economy. • QCBJ
Funding RI’s West End
Rock Island is continuing to make important investments.
The Quad Cities Community Foundation is joining John Deere and the City of Rock Island as foundational pillars with a $300,000 grant to support the West End Revitalization. It’s a unique homegrown effort driven by local stakeholders seeking to renew and grow the historic neighborhood.
“The Transformation Grant is built by donor contributions to our Quad Cities Community Impact Fund,” Sue Hafkemeyer, the Community Foundation’s president and CEO, said in announcing the gift on Jan. 8. “The grant is awarded to organizations who can drive big change. We know the MLK Center has the leadership, knowledge and vision to make the most of this grant.”
The MLK Center in Rock Island will receive the grant the community foundation said is designed to ensure the community-driven initiative has the capacity to succeed and act as a model for other neighborhoods and cities.
Rock Island is taking the needed steps to revitalize not only its downtown, but also key neighborhoods. These investments will pay dividends in the years to come.
