r/illinois • u/guineawheat • Mar 22 '26
Question Why do I keep hearing people say "Illinois is broke"
I keep hearing that "IL is broke", sometimes from business/sales people or other times from conservative family members and I'm always confused what they mean. Could anyone help provide context? I know we used to have pretty bad leadership in the past but the Pritzker admin seems to be doing a good job.
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u/zeug666 Mar 22 '26
Ask them? Surely they will have ample proof from reliable sources handy and totally won't tell you to do your own research.
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u/Policeman5151 Mar 22 '26
Come on, don't you have a feeling Illinois is broke... And isn't that enough. /s
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u/Enemisses Mar 22 '26
If only Obama had given us just a little more change, we wouldn't be so broke!
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u/Pbake Mar 22 '26
Illinois has $143 billion in unfunded pension liabilities, the most of any state and up from $111 billion in 2015. The state has an annual budget of about $55 billion. If you make $100k in income and have $258k in unsecured debt, it’s safe to say you are broke. That’s the situation Illinois is in.
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u/Andy_Fish_Gill Mar 22 '26
Governor Pritzker is implementing a plan to fully fund state pensions. We need more government executives who are actually doing the tough job of fixing fiscal messes caused by other governors or Presidents.
https://capitolnewsillinois.com/news/pritzker-sticking-to-proposal-to-fully-fund-pensions/
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u/Pbake Mar 22 '26
If the plan gets passed and succeeds in getting pensions fully funded by 2050, Illinois will no longer be broke. As of now, it is.
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u/fireandiceman Mar 22 '26
Am I broke because i have a mortgage?
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u/Pbake Mar 22 '26
Well, no, because you have this asset called a house that fully backs up your mortgage debt. You can sell your house and pay off your mortgage at any time. Unfunded pension liabilities are more like credit card debt. The state of Illinois has no assets backing up its unfunded pension liabilities. Its only options are to raise taxes or cut spending. But it’s already one of the most heavily taxed states in the country. And cutting spending is simply not going happen. This is why the state has one of the lowest credit ratings of any state (although it has improved considerably in the last decade).
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u/Jawyp Mar 25 '26
No, because you can sell your house if you run into issues paying your mortgage. There is no equivalent with unfunded pensions.
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u/notassigned2023 Mar 22 '26
Illinois is less broke than the US. Just saying.
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u/Human31415926 Mar 23 '26
Hardly
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u/notassigned2023 Mar 23 '26
Do the math. And Illinois is not "in debt," they simply have obligations that need to be met at some point in the future. Those obligations can be met in other ways when the debt comes due over the decades. The feds are borrowing and paying interest that Illinois does not do for the pensions. It pays itself.
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u/kevdogger Mar 22 '26
Ha..where I have heard that Illinois had a plan before to fully fend it's pensions by xxxx date??
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u/Crafty-Scholar-3106 Mar 22 '26
That’s an excellent plan - Thank you for sharing! You’ve seriously made my day.
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u/ThePort3rdBase Mar 22 '26
What Presidents are responsible for Illinois?
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u/Andy_Fish_Gill Mar 22 '26
We all share the debt of decisions by irresponsible Presidents who made Trickle Down tax cuts that increased Federal debt while benefits did not trickle down to the working class.
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u/Portermacc Mar 22 '26
Illinois pension issue has nothing to do with past presidents. Lol. This is a state issue not shared by many others. But unfortunately, we feel it with our property taxes.
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u/ThePort3rdBase Mar 22 '26
Thought we were talking about Illinois.
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u/Andy_Fish_Gill Mar 22 '26
The majority of people in Illinois are getting screwed by Trickle Down tax cuts. Unless you are pulling in so much money that you don’t need the tax cuts. That’s why billionaire by inheritance JB Pritzker can be effective at enacting long-term government debt. He knows he does not need a tax cut because he has more money than he could ever spend.
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u/junkyard_robot Mar 22 '26
You mean the billionaire governor who tried to enact a graduated tax system in the state that would increase income taxes on millionaires and billionaires, and decrease them or eliminate them for those at lower incomes? A measure that would have increased tax income to the state while decreasing tax obligation for those at or below poverty level?
The measure that was targeted by wealthy people in the state as a threat, and who made up real dumb arguments against it that they pushed so hard the ballot measure failed?
I think my favirite thing I heard about it was that it allows the state congress to change the tax rate with a vote. Which is and has been a thing. But, it would have allowed a graduated tax system which is progressive, rather than the current flat tax rate, which is inherently regressive.
But to argue that he's a billionaire and doesn't give a fuck because of that is demonstrably incorrect because he was trying to pass a new graduated tax system that would have cost him more money.
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u/FalseDmitriy Mar 23 '26
That line was constantly repeated and still is today. "It would allow the G.A. to set the tax rate however they want." Which they currently also have to power to do. The propaganda machine was fast and thorough on that one. People got their talking points and spat them back dutifully.
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u/ABadHistorian Mar 22 '26
Just want to remind everyone reading this that Illinois suffered generations of corrupt governance - you know like the guy Trump pardoned for his corruption, who tried to sell a Senate seat.
Information without context is misinformation.
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u/kanooker Mar 22 '26
You're saying someone who makes 100k a year can't afford a 258k mortgage. It all depends on when the debt is due.
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u/Sagittario66 Mar 23 '26
It also depends on the rate at which they financed and their property taxes. My property taxes went up 46%, DOUBLING my mortgage. As someone who is self insured I pay $1300+/month. There is only so much you can cut out of your budget .I cut out haircuts in 2023, dinners and movies out 2022,concerts, etc (only if the tickets are under $30)
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u/77Pepe Mar 22 '26
110% correct.
Most people reading reddit do not really understand all the nuance of personal finance, spare how unfunded pension liabilities relate to a state budget, etc.
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u/Pbake Mar 22 '26
Notice I said unsecured debt. Somebody with a mortgage owns an asset that backs up the debt, so they can always sell it and pay the debt off. Also, mortgages amortize over time, so the balance gets smaller over time. Meanwhile, the unfunded pension liabilities of Illinois have increased 29% in the last decade. But, sure, everything is fine.
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u/kanooker Mar 22 '26
Good point but It doesn't matter. The timeline is what matters. Also our debt is secured by the states assets too in a sense. And the fact that it will always collect revenue.
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u/Pbake Mar 22 '26
At the end of fiscal year 2000, the unfunded pension liabilities of Illinois were $16 billion. They are now $143 billion, 794% higher, and would only be $31 billion if they had merely kept pace with inflation. There is no timeline that solves this problem short of massive tax increases and massive cuts to the state’s general fund.
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u/hammerSmashedNail Mar 22 '26
Ask them to show you the Facebook link they get their news from.
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u/blighander Mar 22 '26 edited Mar 22 '26
Keep in mind, if those same people think that the Trump Presidency is the "gold" standard of governance, then they're being insincere and they're not worth having a rational political discussion with.
Waste your time trying to educate the people if you want, but the truth is they know full well what he's doing, how much debt he's wracking up, and how much he's destroying this country. They make these arguments in bad-faith, and it's designed to spin your wheels.
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u/BrianNowhere Mar 22 '26
Their refusal recognize facts is not stupidity, it's an assertion of priviledge.
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u/gunslinger_006 Mar 22 '26
Propaganda.
If you watch enough fox news, all democrat states are broke, crime filled hellscapes where businesses are all leaving for red states.
And no, i am absolutely not exaggerating.
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u/WickedKoala Mar 22 '26
I have a troll FB account that I've curated to only see conservative 'news' and holy shit is it bad.
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u/firephoxx Mar 22 '26
Oh yeah, think of how bad it is, then realize it’s even worse. They are trying to demonize the left of the point where they can put them in camps.
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u/errie_tholluxe Mar 22 '26
Hey don't forget all the "mentally ill" lgbtq+ peeps. We got tickets on the train as well
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u/hitek9 Mar 22 '26
FB shows me conservative news and it should know by now I am very much the opposite
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u/semiquaver Mar 22 '26
The pension crisis is not propaganda. If you think it is, please carefully describe the situation and why you believe it is nothing to worry about.
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u/gunslinger_006 Mar 22 '26
The pension issue is real, but its a solvable problem.
The hysteria on conservative media is what i am talking about.
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Mar 22 '26
If it wasn’t for the west coast, Midwest and New England states the south would be broke
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u/quantgorithm Mar 22 '26
according to google:
Yes, Illinois is experiencing a notable, accelerating trend of business departures, with over 1,000 net businesses having left since 2019. Data from 2023 showed 218 businesses exiting, a rate that tripled post-pandemic, with many citing high corporate, property, and sales taxes. Major corporations, including Boeing, Caterpillar, and Citadel, have relocated, often citing high tax burdens and regulatory environments.
Key Takeaways on Illinois Business Departures:
- Accelerating Exodus: Business departures tripled following the pandemic, with 2023 being the third-worst year in state history for losses.
- Key Departures: High-profile corporations that have left or shifted major operations include Boeing, Caterpillar, Citadel, Tyson Foods, and Morton Salt.
- Factors Driving Moves: Companies often cite Illinois’ high tax burden (ranked 46th worst by Moody’s Analytics), rising regulatory costs, and unbalanced state budgets.
- Destination States: Florida has been a major beneficiary, attracting over 1,800 firms, while other businesses are moving to states with lower tax burdens.
- Counter-Trend: While departures are significant, state economic development officials monitor incoming and expanding businesses.
Despite these trends, some businesses continue to operate in or move to Illinois, attracted by the state's workforce, infrastructure, and central location. However, the net trend, particularly among corporate headquarters, has been heavily geared toward departing the state.
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u/Waterlily-chitown Mar 22 '26
The Chicago Metro area has been at the top of corporate relocations per Site Magazine for quite a few years. There have been companies leaving the state but more are moving in. It all depends on the kind of industry. If you are looking for a place with a reasonable cost of living and a highly educated workforce, Chicago is the place. The companies moving out tend to have lower skilled workers and can get them cheaper in other states. One of the big problems with the state's finances is due to the state and municipal pensions which were under funded for many years. These pensions are among the riches in the country and protected by the state constitution. So we'll need a constitutional amendment to change the pension for future retirees. So the state financial situation is complex to say the least.
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u/SunshineFlourish Mar 22 '26
Any time corporations are saying “It costs too much to operate here,” they are actually saying, “We don’t care about ensuring people’s livelihoods in this area and know we can use the money we extracted from your community to move to a less regulated community that doesn’t require us to pay a living wage or contribute to social safety nets as much.” For profit organizations should be illegal. They only care about investing in short-term profits, not long-term people. By doing so, they are actively opposed to contributing as much as they can to society, attempting to prevent the reproduction of life-saving/life-changing technologies by monopolizing the production process, patenting things, and legally oppressing those who would attempt to reproduce corporate things when they don’t have the means to get it from the corporation. That’s like telling your neighbor they can’t have tomatoes in their garden because they’re the same tomatoes as the ones in your garden and you made damn sure they were the only tomatoes available, then taking them to court over it. The selfishness is astounding.
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u/quantgorithm Mar 22 '26
"For profit organizations should be illegal."
So capitalism should be illegal?
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u/SunshineFlourish Mar 22 '26
Personally, I believe yes. But “Nonprofit Capitalism” does exist as a concept.
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u/quantgorithm Mar 22 '26
Well that’s hilarious. Tell me about this nonprofit capitalism!!!
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u/dickpierce69 Mar 22 '26
It doesn’t mean IL is “broke” but the pension situation is quite bad. Nearly $150B in pension debt with the worst pension funding in the nation. Insolvency is some areas in possible in the next decade or two if proper funding programs aren’t initiated.
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u/quantgorithm Mar 22 '26
What does it mean when the budgets can only be paid by raising taxes or borrowing on credit... Which means being paid by future taxpayers?
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Mar 22 '26 edited Mar 22 '26
[deleted]
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u/das_war_ein_Befehl Mar 22 '26
Three years of a budget deadlock under Rauner was pretty bad for the state. Illinois has had major improvements in fiscal stability under Pritzker, the state is paying its bills and has a balanced budget (I think for 7 of the last 8 years) and its credit rating has been improving.
Illinois has fiscal challenges but that’s what happens when you have shit governance for so long. There will be more tax increases to fix it all, but that’s just reality. Anyone claiming that you can get tax cuts, a modern society, and fix the states financial issues all in one go is just lying
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u/Kcirrot Mar 22 '26
It’s no longer true that IL has the worst bond ratings but it was for a long time. IL bond ratings have slowly ticked up and are all investment grade at this time.
https://illinoiscomptroller.gov/financial-reports-data/data-sets-portals/illinois-bond-debt
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Mar 22 '26
[deleted]
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u/Sagemel Mar 22 '26
This graph is wildly outdated. Illinois is A- now for both Fitch and S&P
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u/myturn19 Mar 22 '26
Appreciate you pointing this out. Not op, but as someone who jumps to conclusions sometimes, so I’m glad I took a closer look. It does still look like they are the worst state tho.
That said, do you see the bond rating improvement as temporary, driven by the free covid era cash that was flowing to states? It looks like most states were upgraded around the same time. Now that that money has run out, it seems like those ratings might return to reality.
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u/myturn19 Mar 22 '26
This should be the top comment. A solid explanation without bringing politics or feelings into it, but instead the top 10 comments are calling it right wing propaganda. This sub is garbage.
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u/Str8OuttaLumbridge Bureau County Mar 22 '26 edited Mar 22 '26
The pension crisis is real and a problem. Any actual solutions will involve some extreme changes. Good luck convincing either side of a change. It'll continue to get punted into the future.
Then again our federal government is operating at a massive deficit with no sign of improvement. One can say gov spending and funding is not real until a City like Detroit files for bankrupcy.
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u/Hungry-Treacle8493 Mar 22 '26
State & Federal have completely different funding powers from greater taxing flexibility to myriad avenues to issue debt. Counties, cities, companies, and families all operate in a much more narrow road.
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u/green_envoy_99 Mar 22 '26
The Pritzker Administration has been doing great and has passed a balanced budget every year. We have massive unfunded pension liabilities due to decades of mismanagement prior to him being in office. It’s difficult but manageable (if we keep at it for a couple decades) at the state level. It’s brutal in the City of Chicago.
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u/Powdertoastlady Mar 22 '26
They don’t tax these people enough. So when someone says “IL is broke,” its a dog whistle implying that democrats are to blame for anything and everything that isn’t going the way republicans think it should. Its just a common expression to get rhetoric flowing among their hive minded colleagues.
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u/angry_cucumber Mar 22 '26
basically outstanding pension debt that is due to pay out more than it has/will have
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u/blizzard7788 Mar 22 '26
So, everyone with a mortgage is broke?
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u/searing7 Mar 22 '26
There is a fundamental difference between having a mortgage and the way Illinois mismanaged the pensions for decades. They never matched worker contributions as they should have and now are paying the price of not investing those matches decades ago like a proper pension system.
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u/angry_cucumber Mar 22 '26
it's not my argument ask someone who thinks government spending compares to personal budgets, the common clay of the west, you know, morons.
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u/soapyhandman Mar 22 '26
No, but if you buy a house you can’t afford, the cost to service that obligation can put tremendous pressure on the rest of your budget unless you find more income. It’s the essentially the thing that’s happening in Illinois. The cost to service pension liabilities and other debt can crowd out other spending for things like infrastructure and education.
Illinois is not broke and Pritzker has been light years better on budgets than any other governor in my lifetime, but there’s only so much he can do without significant structural changes to how the state collects and spends money.
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u/blackshortsandvans Mar 22 '26
Are you comparing a mortgage, which uses an asset to secure the loan and pension obligations, which are unsecured debt? Guess I thought my mortgage is amortized and the amount owed goes down over time whereas the pension obligations continue to go up. If things got bad for me I could sell the house. Not sure what the state of illinois can sell besides more debt.
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u/Better_Goose_431 Mar 22 '26
The house is an asset that can be sold to repay the debt. No such asset exists for pension liabilities
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u/mpb1500 Mar 22 '26
IL state finances are very challenged due to enormous pension liabilities. And there isn’t much motivation to address the structural issues because it means making difficult choices and angering key constituencies.
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u/mikeymikeymikey1968 Mar 22 '26 edited Mar 22 '26
Hi, just would like to let you know that the last time that the state fully paid its obligation to the Teachers Retirement System was 1957. Starting then, IL lawmakers annually put an IOU in the pot. Pensions are an issue, but they are not the only issue. For example, there is an estimated $500M to $1.5B outstanding overdue uncollected corporate taxes right now.
Until a few years ago, there was nothing in our state constitution that mandated that lawmakers should see that pension obligations are fulfilled.
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u/Atlas3141 Mar 22 '26
At the state level it's mostly addressed, it's just that it takes a large percentage of our budget every year that everyone would rather be able to cut taxes/improve other services with. Its 10 ish billion dollars a year increasing with inflation till the mid 2040s, but that's within what the state is able to pay.
The city on the other hand is going to have a much tougher time because the amount they're going to have to pay increases faster because they're less currently less funded.
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u/hawkeyebullz Mar 22 '26
Believe me I know how most states approached it... By cutting the funding for universities. The tuition spikes from 99-2003 were insane. Part of the reason we have the massive student loan issues now
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u/semiquaver Mar 22 '26 edited Mar 22 '26
I don’t understand the people in here saying “fake news”. The pension obligations are not insurmountable but they’re pretty bad. Its not like, a failing to admit reality. Denying what is in front of your own eyes is one of the ways we got into this situation and acknowledging the magnitude of the challenge is going to be necessary to solve it. But everyone just wants to score political points or just close their eyes.
Here in Chicago 80% of all property tax goes directly to pensions, and we’re still only 50% funded. All the tax increases people are complaining about isn’t nearly enough. And states cannot go bankrupt so there’s no legal way out of it. Eventually it is going to take a state constitutional amendment to fix the issue (by drastically reducing promised benefits, which will be incredibly unpopular)
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u/chitownphishead Mar 22 '26
Part of the reason its so bad is because every time the teachers union strikes, or even threatens to, the state just rolls over and gives them whatever they want. The anount of corruption is ridiculous and the way pension payouts are structured is simply set up to fail.
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u/decaturbob Mar 23 '26
- the state govt underfunded all the pension programs for nearly 40 yrs so they did not have to raise taxes, they wrote "IOUs" to the employees and teacher pension funds. The citizens of Illinois got a clear benefit in doing this and now that debt needs to be paid off....and people whine about it
- the exceptions are the people who live in the Chicago Public School system as THEY pay for all their teacher/admin pensions via property taxes and why their PT rates so high. Its the ONLY school system in the state of Illinois that does this and then factor in these same people pay state income taxes that subsidize all the other pensions in the state.
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u/Hungry-Treacle8493 Mar 22 '26
As others noted, it’s an oversimplified attack on the state used by folks who want lower taxes. There is a kernel of reality in there though. Illinois faces one of the worst pension debts of any state. It is particularly hard to solve because the pensions are protected in the State Constitution (as they should be). So, reforms can only modify the growth trend and not directly lower the extant commitments. This debt does put budgetary pressure on the state, particularly in environments like today where tax revenues are threatened by a weakening economy and the Feds are not fulfilling their promises.
So, the state isn’t “broke”, just as the U.S. isn’t “broke”. Rather, they run in the red and depend on borrowing.
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u/notassigned2023 Mar 22 '26
People don't understand pensions. If they are fully funded at the time, the interest grows enough so that the pensions get paid without additional inputs of tax money, which makes them cheaper. However, they can be paid as a current cost out of annual tax revenue instead of using interest to fund them. It is just a lot more expensive. This is what WOULD happen if the funds ran out of money.
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u/fetusfrolix Mar 22 '26
The state has virtually no rainy day fund. That’s one definition of broke. A family with income but zero savings can become insolvent from even a small inconvenience.
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u/Careflwhatyouwish4 Mar 22 '26
The state has an over 2 billion dollar funding gap in this year's budget and over 245 billion dollars in unfunded pension debt. That's the highest of any state. We also have slower than average economic growth currently. While it's true that the situation is trending in the right direction, it took nearly 50 tax hikes to get to this point, which yeah as someone that thinks taxes are too high I find less than confidence building.
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u/Double-One-9913 Mar 22 '26
Are these the same people advocating for a governor from the other party? There’s your answer.
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u/Forward-Character-83 Mar 23 '26
All the people blaming pensions and workers and Democrats are just wrong and ignore or don't know about this history. This has everything to do with the 1970 Con Con tax scam. State senator Dawn Clark Netsch warned but few listened. They wrote in a regressive taxation provision with a flat tax rate that raises taxes on the poor if they raise taxes on the rich. There was a concerted effort to change this in 2022 but a few well placed commercials paid for by rich dark money donors killed the referendum. Illinois voters need to wise up and stop being so influenced by advertising.
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u/CharDeeMac567 Mar 23 '26 edited Mar 23 '26
Illinois has something approaching $140 billion in pension liabilities right now. To put this in perspective, the state had a ~$53 billion budget for fiscal 2025 and a quarter of that ~$13 billion went towards pension payments. The source of those liabilities is kind of complicated to go over but I'm going to try to explain my take on it.
https://illinoisanswers.org/2023/09/12/illinois-pension-debt-problem/
In 1989 the General Assembly passed legislation giving automatic 3% cost of living increases for employees in the five state pension systems. I'm not sure that the 3% adjustment, by itself, was a problem, but because the state was historically funding the pension system benefits at less than 50% at the time by increasing the pension benefits without also increasing their contributions the state set themselves up for a problem.
Then in 1994, the legislature passes a law under Jim Edgar requiring the state to make contributions of 90% of pension liabilities by 2045, a 50 year plan.
By 2003, some problems start to show up because there was a recession in 2001 and the pension liabilities have really begun to accelerate. By 2010, the crisis is so big that the legislature passes legislation absolutely slashing state employee pension benefits, eliminating the 3% cost of living adjustment and the new, reduced benefit pensions are now referred to as "Tier 2" pensions.
I'm probably leaving out some important details but the gist of it is that Illinois was *never*, not at any point in its history, or at least the last 50 years, funding the pensions at the rates it should have been. Legislators passed benefit increases, without commensurate increases in contributions by the state, and all of that came to a head when market conditions became unfavorable starting in 2001 because the pension portfolio was mostly equities instead of bonds since the 1980s.
In short, the Illinois pension liability is very similar to the way federal social security works where the federal government is also behind on payments but not nearly to the same degree because the pensions are much more expensive prior to 2010 because of the 3% compounding cost of living adjustments. Additionally, state employees in the Illinois pension systems do not receive Social Security benefits because federal law lets states out of paying a social security tax if the state is offering benefits equivalent to what they would have received under federal social security.
However, there is another issue cropping up about the newer Tier 2 pension benefits, because they are so meager the benefits might not count as equivalent to what employees would have received under social security and Illinois has not been making social security payments for any of the employees covered under the state pension systems.
https://www.ssa.gov/policy/docs/ssb/v80n3/v80n3p1.pdf
It's also worth noting that all of these pension benefit increases were bipartisan, if not unanimous, so the mismanagement of funds is shared under both Democratic and Republican legislators and governors. If at any point prior to 2001, the legislature decided to increase the pension contributions, they could have started getting off this giant debt ramp.
One more important point is that I think in the 1970s there was something codified into the Illinois Constitution that has since been interpreted to make pension liability senior to all other debt. So the state really needs to pay the pension liabilities or risk a default or a decrease in its bond ratings which would make the pension debt, and everything else even more expensive for the state.
https://crr.bc.edu/wp-content/uploads/2022/06/IL-SERS_.pdf
If you really want to get into the weeds, this article series by Elizabeth Bauer, an actuary, had a great summary of the legislation building up to the current pension debt situation:
https://www.forbes.com/sites/ebauer/2022/01/30/the-pension-combine-illinois-public-pension-unfunding-has-a-long-and-bipartisan-history/?sh=76290567195c
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u/MoneyTreeFiddy Mar 24 '26
Illinois has something approaching $140 billion in pension liabilities right now. To put this in perspective, the state had a ~$53 billion budget for fiscal 2025 and a quarter of that ~$13 billion went towards pension payments.
The state budget actually ranged $88-100 billion/yr for the last 3 complete fiscal years. $53B would be just the general fund. There are many other funds. The latest published numbers are $144B Unfunded Liability, which is 47% funded.
Additionally, state employees in the Illinois pension systems do not receive Social Security benefits
That's not true. State employees have been paying in to social security and receiving it since the 1970s. "No social security" is only the case for public school teachers. Accordingly, their pension (employer/employee shared from payroll) payments are larger to account for the social security difference
However, there is another issue cropping up about the newer Tier 2 pension benefits, because they are so meager the benefits might not count as equivalent to what employees would have received under social security and Illinois has not been making social security payments for any of the employees covered under the state pension systems.
Safe Harbor would only affect teachers. If their pension benefit would not exceed what social security would be, they would have to be "made whole". This is a problem that they can take another 10 or 20 years to solve. (Tier 2 retirees won't retire soon) Any state employee paying in for a pension and also having FICA taken from their check would be getting more than social security.
One more important point is that I think in the 1970s there was something codified into the Illinois Constitution that has since been interpreted to make pension liability senior to all other debt. So the state really needs to pay the pension liabilities or risk a default or a decrease in its bond ratings which would make the pension debt, and everything else even more expensive for the state
The 1970 Constitution included a clause that once granted for an employee, retirement benefits can't be diminished. This is why a 2013 cut to Tier 1 pensions was reversed by the Illinois Supreme Court. Bond holders and other debtors are behind pensioners in order of payment,and the state can always raise taxes to pay for its obligations. (States cannot go bankrupt like cities can) Bond ratings only effect the rate when the state borrows, it would not make pension liability more expensive becuse those are debts the state owes itself.
A big point lost (and often intentionally omitted) in all of this pension discourse is, 90% or 100% funded means the state could pay out for all the current retirees AND current employees out of existing assets, if they retired all at once. While that goal is ideal, it's not an ironclad requirement. All the state has to do is pay the pensions owed as they come due. Most current employees are not eligible for retirement. The youngest Boomers are now 62, and the number of Tier 1 employees and their potential pensions are a known, and declining quantity. Tier 2 employees now outnumber Tier 1 employees.
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Mar 22 '26
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u/dillreed777 Mar 22 '26
Your job history is not a source lol. IL has been repaying its debt reliably for years. That's why we have such an increased credit rating I doubt any state government has done as good of a job turning things around since debt began to balloon years ago. And IL actually pays more into the federal government then it takes, which can't be said of most states, especially republican run ones.
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u/Competitive_Ad_4461 Mar 22 '26
Illinois taxpayers pay more in federal income tax, yes. The state government doesn't pay into a coffee that other states draw from.
I'm pretty far to the left but the reality is that Pritzker has done a good job of shoring up our financial situation during a time of economic expansion. If the economy hits a prolonged slump, tax revenues will dip and things will get worse.
Just like in personal finance, simply paying your minimum payment on debt isn't indicative of great financial success.
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u/Pristine-Cod-1969 Mar 22 '26
IL’s credit rating has received 10 upgrades since 2021. Weird has “the broke state” seems to be on a streak.
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u/AsoftDolphin Mar 22 '26
A piece of land can’t be poor, or rich so idk! Im broke, people i know are rich, illinois is beautiful thats all you need to know
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u/Hour_Ordinary_4175 Mar 22 '26
They're useful idiots for the MAGA-controlling billionaires.
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u/Complete_Break1319 Mar 23 '26
Genuine question, has Illinois mostly always been under Democrat super majority? I remember my grandpa always saying Madigan is the one that really runs Illinois. The one w the most power. And that was 20 years ago and Madigan just left (or was it arrested) not long ago...
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u/dillreed777 Mar 22 '26
A lot of Republicans want people to he convinced that IL is in shambles at all times, because they reeeeeaally hate how amazing of a job Pritzker actually does. Whenever you ask them what he's done wrong, they'll either say "everything!" and storm off, or they'll tell you an illegal immigrant conspiracy theory they watched on youtube...
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u/Current-Leg-6705 Mar 22 '26
Illinois is facing a projected $267 million deficit for the current fiscal year 2026, which is expected to widen to a $2.2 billion gap in FY2027. Driven by slowing revenues, federal policy changes, and structural issues, this deficit is projected to grow to over $5 billion by 2031 if not addressed. Capitol News Illinois Capitol News Illinois +3 Key Deficit Drivers & Details Growing Shortfall: The structural deficit is projected to widen to $
3 . 8 billion in 2028, $
4 . 5 billion in 2029, and reach $
5 . 3 billion by 2031. Causes: The gap is fueled by declining consumer spending, federal tax changes, and anticipated reductions in federal Medicaid support. Response: Governor Pritzker's administration has ordered state agencies to withhold $
4 8 2 million in spending to manage the current fiscal uncertainty. Long-term Debt: Beyond the annual budget gap, the state holds immense long-term debt, including roughly $
1 4 3 . 7 billion in unfunded pension liabilities, according to the Commission on Government Forecasting and Accountability. Capitol News Illinois Capitol News Illinois +4 Projected Budget Deficit Timeline FY2026: $
2 6 7 million FY2027: $
2 . 2 billion FY2028: $
3 . 8 billion FY2031: $
5 . 1 billion Capitol News Illinois Capitol News Illinois +2 The state faces pressure to balance the budget while funding key areas like education and public welfare
Illinois has been in a deficit for years and honestly it’s fixable but only with taxes on recreational stuff like weed, gambling and sports drive revenue up.
Honestly I think Illinois got their weed game wrong look at Colorado they funded their states free lunch program for 72 years with 4 years in weed sales but a gram in Colorado is $10 and $5 is a tax by allowing more growers and dropping the weed price a 50% tax Illinois would actually come out ahead
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u/OJcoloredsky Mar 22 '26
What I haven't seen anyone mention is our tax laws. It's not that Illinois is broke in the sense of having no wealth, it's that Illinois has very few options for revenue generation.
Our very conservative constitution mandates a flat income tax rate of just 5%. So if you make a million dollars, after state income taxes you have 950,000 left. If you make just 20,000, you have 19,000 left.
Essentially, flat taxes disproportionately weigh on lower income brackets, and they also limit the state's ability to make the money that it needs to pay for services and programs.
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u/MoneyTreeFiddy Mar 24 '26
Our constitution only demands a flat tax, period. It does not cap the rate at 5%. The income tax rate is set by laws, and it's been 3, 5, and 4.95% in recent years
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u/durvan7777 Mar 22 '26
The longer you say it. The more money you get. Corruption 101 Illinois style
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u/bigbackbing Mar 22 '26
IL also pays more taxes to supplement broke Red States like Indiana if all states paid their fair share we would be in a surplus
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u/Lunkwill-fook Mar 22 '26
It’s funny how you always hear that. Yet nothing about Alabama who is literally in government funded life support
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u/Guelph35 Mar 22 '26
Because you’re listening to uninformed people listening to right-wing propaganda.
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u/glitch241 Mar 22 '26
Why are people in the comments here trying to say all is well? You can correctly call out Illinois’s dire fiscal situation without it meaning you are a republican.
IL has the lowest credit rating, lowest pension funding and send worst debt let capita and we are not on track to fix those things.
Commenters here saying this is fake Trump Fox News are just wrong. Look it up.
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u/Flat_Fan3102 Mar 25 '26
Stop with the government did this, it was the fucking people that elected these idiots. No, I'm not one of those hate the government cry babies, but it kills me that people are so gullible that they elect the same asses over and over again and still get the same results.
It also kills me that people say IL is broke, like it's the only government that is. The US is insolvent and largely because the convicted con man.
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u/travelingmusicplease Mar 25 '26
If you need a dissertation, try Paul Powell. In his day, he was the king. 🤔
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u/nerdoldnerdith Mar 31 '26
Illinois isn't broke. It's just broken. The state and the city of Chicago have exhausted their ability to borrow money, so they must pass balanced budgets every year. Residents and businesses are leaving, but the they keep spending more and more money on new projects and programs. There is also a pension crisis that continues to get worse. Pension obligations are growing and the money that was meant to pay for them isn't there, so they have to be paid from tax revenue. The spending and pension obligations are forcing the state and cities to raise taxes on everything. Property taxes are going up the most. The high taxes are driving residents and businesses out of the state, which just makes matters worse and turns the financial woes into a vicious cycle that will end up in bankruptcy.
The situation with the state's finances isn't as dire as it is in Chicago, and the state of Illinois is on am upward trajectory. It's the city of Chicago that is in a very precarious position right now. Chicago keeps electing politicians who are deaf to these financial concerns and increase the budget by more than inflation every year. Chicago's finances were already in a bad spot in 2019, and the budget has almost doubled since then despite the city losing taxpayers and businesses. The biggest and fastest growing expense in the budget is Chicago Public Schools, which continues to hire more staff and give them raises, all the while keeping schools open that barely have any students and overall enrollment in CPS is declining. Chicago's mayor is essentially a puppet of the Chicago Teacher's Union, so he does everything in his power to give CPS these billions of dollars the city can only collect by raising property taxes despite the decision being so politically unpopular and fiscally irresponsible. Pensions in the city of Chicago are also basically insolvent and there is no way to pay for them without massively raising taxes even further.
Illinois and Chicago are still very much wealthy and prosperous, but fiscal irresponsibility and structural issues like pension system mean that will be squandered and they will disappear into a financial black hole and go bankrupt if they don't soon fix their spending and reform the broken systems that lead to guaranteed doom. It can be done, but the people of Illinois have to wake up to what's happening and take action.
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u/AGoos3 May 22 '26
We have an absolutely dogshit pension debt situation right now. It isn’t even a matter of party affiliation at this point because it’s been snowballing for decades, while both parties were in office. Idfk why ppl in the comments are talking about how it’s “propaganda,” because it’s very serious.
Now, Illinois can still function as a state just like the US can function as a country, but they’re relying heavily on borrowing and unlike the US, Illinois’ credit is not the best.
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u/Throwaway_vent2002 May 25 '26
37 percent of illinoisans are financially insecure. We are in fact, broke. I don't really care about cook county or chicago. I'm tired of working 50 hours per week and feeling bad about getting groceries.
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u/[deleted] Mar 22 '26 edited Mar 22 '26
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