Frequently Asked Questions

  • Why should I care?

    Illinois is dangerously close to a financial tipping point where it will become impossible to contain the spread of economic damage or quickly remedy the situation. Unless steps are taken soon, the money will not be available for basic public functions and taxes will be raised dramatically.

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  • How will this affect me?

    If politicians try to tax their way out of this, the State's personal income tax rate could jump from 3% to 8.2%. To put that in perspective, if your taxable income is $50,000 your tax bill would jump from $1,500 to $4,100. And that will just cover the projected budget deficit for Fiscal Year 2011, without dealing with the massive unfunded obligations of the pension and retiree health care plans for State workers.

    The real answer lies in common sense reforms of these pension and retiree health care plans, reasonable reductions in other areas of the State's budget, and a multi-year plan to balance the budget.

  • Are reforms for current employees constitutional?

    Our legal research, conducted by Sidley Austin LLP, concludes that nothing in the Illinois Constitution should be read to prohibit the State from lowering future benefits, so long as the State meets all its obligations for benefits already accrued and vested. Retirees and employees would lose nothing they already had earned.
    Click Here to read entire Sidley Austin analysis.

  • How bad is the retiree-related debt for Illinois' State workers?

    The pension and retiree health care debt and unfunded obligations associated with State workers is projected to be more than $130 billion by the end of the Fiscal Year 2011 – ranking it among the worst in the nation in terms of debt per household. The Pew Center on the States studied the issue and found Illinois has the worst funded pension system in the nation.

  • How did this happen?

    The truth is politicians in both major parties, over many years, shifted the cost burden of State retiree-related obligations to the future through borrowing or by simply ignoring the growing unfunded commitments. They have ducked anything that resembled a hard choice.

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  • Is the situation hopeless?

    No. Illinois could save billions of dollars if it just implemented a two-tiered system that kept promises made to existing employees but offered all employees a less costly retirement option going forward.

  • Didn't Illinois already address this issue?

    The reforms passed in March by the Illinois General Assembly were a good first step, but they did not go far enough. Because the reforms were applied only to new hires, they do nothing about the $130 Billion in unfunded obligations and Illinois will not see any savings for years. Lawmakers must reform pension benefits for current employees on a prospective basis that protects the benefits they've already earned while feathering in more affordable plans moving forward. The General Assembly also should require State retirees to share in the cost of their health insurance premium just as taxpayers in the private sector have to do.

  • Are you trying to take away the pensions of public servants?

    Absolutely not! We support public pensions, but the truth is Illinois has shortchanged its public pension funds so significantly that the funds will soon run out of money if benefits are not reformed. If that happens, State workers will have a claim against the insolvent pension funds, but not the State – which would be a disaster for them and their families. (Legal research conducted by Sidley Austin LLP concludes that the state is not the guarantor of the pension funds. Click here to read the Sidley Austin Analysis) It is in the best interest of everyone in Illinois to fix the public retirement system before it collapses.