Public pensions are already eating away Illinois government services, increasing by more than 500% during the past 20 years as spending on core services including child protection, state police and college money for poor students has dropped by nearly one-third since 2000.

At the same time the clock is running out on the state’s public pension funds, with the first potential insolvency looming as soon as 2039, according to an analysis commissioned by the Illinois Policy Institute.

Pension contributions accounted for less than 4% of Illinois’ general funds budget from 1990 through 1997.1 For fiscal year 2020, pension contributions and related costs will consume 25.5% of all general revenues at $10.2 billion. This figure includes:

Direct contributions to the five state systems of $9.224 billion 2

Debt service on pension obligation bonds worth $708 million 3

The state’s contribution to Chicago Teachers’ Pension Fund normal costs (the employer share of pension costs created by an additional year of work) of $257.4 million 4

$92 million in new debt service costs for pension buyout bonds5

The rapidly increasing cost of pensions is crowding out spending for core government services.

Since fiscal year 2000, after adjusting for inflation, state spending on pensions has grown more than 500%. Spending on government worker health insurance has grown 127%. Meanwhile, spending on K-12 education, often touted as a top priority by Illinois politicians, is up just 21%. All other spending, including social services for the disadvantaged, is actually down in real terms by 32%. Total spending has risen by 15% over that period.

Consider the following list of programs and agency budgets, all of which are included in the “other spending” category. These programs include the state police, helping poor students pay for college, protecting children from child abuse, aiding the poor, and fighting disease and other public health issues.

Whenever media reports on a failure of state government services, including the ongoing crisis of a failing Department of Children and Family Services,6 the unsustainable cost of current pension benefits should be at the top of mind for residents and lawmakers.

Pensions are also a leading cause of Illinois’ high property taxes, causing them to skyrocket from around the national average in 1996 to the second highest in the nation today.7 Despite this, local governments are also cutting core services residents value today to pay for yesterday’s government in the form of pensions.

For example, in 2018 Peoria was forced to lay off 16 police officers, 22 firefighters and 27 municipal workers to be able to afford its pension payment.8 That same year the South Chicago suburb of Harvey laid off 18 firefighters and 13 police officers to make its own pension contributions.9

Without pension reform, Illinois residents face a future in which they’re asked to pay more in taxes to receive ever less in valuable government services.