North Cook News

Resolving Illinois' still-growing pension debt crisis, at this point, can't happen without real pain, and it's "way past time" politicians were honest about that, a state House representative from Cook County said during a recent interview.

The problem has been building for decades and isn't unique to Illinois, but Illinois is the worst of all the states in the nation, Rep. Tom Morrison (R-Palatine) told North Cook News.

"It's been easy for most Illinois politicians to make pension promises and add pension sweeteners to public employees without reconciling how to pay for them, either by cutting spending to other budgetary line items, raising taxes, or growing Illinois' economy to accommodate the increased spending obligations," Morrison said. "By the time the ever-increasing bill comes due, those same politicians are long gone - and many of them are collecting their own gold-plated legislative pensions to boot. That may how we got here, and why corrective action has been weak or non-existent.  It's way past time for politicians to level with both pension recipients and the rest of the state's citizens."

Fixing the problem now will be painful, Morrison said.

"We've headed down this path for so long, it's impossible now to fix it without inflicting real pain on one group or another - or everyone," Morrison said. "At a minimum, we need to amend the state's constitution to address the pension clause that has allowed sweeteners but no rollbacks as the pension funds' major cost drivers have been identified."

Automatic compounded cost of living adjustments while life expectancies have increased dramatically has been part of the problem, Morrison said.

"We need to move current employees over to defined contribution pension plans for the remainder of their careers, giving older employees the defined benefits they've earned up to today and giving younger employees plenty of years to build up their own individual retirement accounts," he said.  

The direness of the shortfall in the state's pension plans was spelled out in a Wirepoints report released earlier this month. The report released Nov. 17 found that Chicago and Cook County's pensions' retiree health shortfall were $122 billion. State pension obligation bonds' shortfalls stood at $9 billion.

State retiree health insurance shortfalls had hit $55 billion by the time the report was released and noted that taxpayers in the state are on the hook for a total of $530 billion in debts.

"While Wirepoints uses Moody's debt estimates as the standard in this report, we also report the state's official numbers for comparison purposes," the report said. "Illinois' official calculations also reached a negative milestone of their own this year: state and local retirement debts crossed the $300 billion mark in 2020. Any way you cut the numbers, retirement debts are reaching record levels in Illinois."

Successful pension reform can't, at this point, happen without somehow leaving taxpayers shouldering some of the burden, Morrison said.

"As stated above, it's impossible at this point to not have any group untouched by the necessary reforms," he said. "The only path forward for sustainable pensions are defined contribution plans, and employers and employees operating and living realistically within their means.  The private sector began moving in this direction years ago, and so have responsible local and state governments elsewhere around the country."