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A Dramatic Rise in Pension Benefits–Not Funding Shortfalls–Caused Illinois’ State Pension Crisis

February 22, 2018

This study, written by Wirepoints, Inc. president Ted Dabrowski and policy analyst John Klingner, uses official state and federal government data to compare the rate of growth for Illinois pension assets and liabilities to economic markers.

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This study, written by Wirepoints, Inc. president Ted Dabrowski and policy analyst John Klingner, uses official state and federal government data to compare the rate of growth for Illinois pension assets and liabilities to economic markers between 1987 and 2016.

The rate of growth of taxpayer-funded pensions offered by Illinois lawmakers has exceeded wage-earners’ ability to fund those benefits through taxes, Dabrowski and Klingner write.

“Total pension benefits have grown at an annually compounded rate of 8.8 percent over the past three decades,” Dabrowski and Klingner wrote. “Compared to 1987, benefits have grown 1,061 percent. That growth is six times more than total state general revenue growth over the same time period; eight times more than median household income growth; and nearly ten times more than inflation. In fact, Illinois’ pension benefits grew faster than in every other state in the nation except New Jersey and New Hampshire between 2003 and 2015, according to Wirepoints’ analysis of Pew data. By any measure, the pension promises made by Illinois politicians have been extreme and unsustainable.”

Author
Ted Dabrowski writes for The Heartland Institute.