A taxpayer advocacy group is touring parts of Illinois highlighting what it said are lavish public sector pensions in an effort to spur change.
Taxpayers United of America Founder and President Jim Tobin was in Champaign on Wednesday to highlight public pensioners making more than $1 million over the lifetime of their retirement. Statewide, the number of public pensioners getting six-figures a year has increased by more than 2,500.
“This brings the new total to 22,053 retired government employees receiving over $100,000 a year,” Tobin said.
Taxpayers United of America posted a list of those retired workers on its website. Tobin said he hopes raising awareness about the costs will spur change.
“End pensions for new hires,” Tobin said. “Put them all in 401(k)s. There’d be no new pensions for new hires. That’s one thing they could do.”
Despite Illinois’ pension debt eclipsing $134 billion in unfunded liability, no plan to put new hires in a defined-contribution plan, rather than a defined-benefit plan, has advanced at the statehouse.
A pension buyout plan passed two years ago and expanded this year, could bring in some savings, but only an estimated tens of millions, nowhere near the unfunded liability north of $134 billion.
Previous laws addressing pensions created a Tier II employee with less expensive benefits than those employees hired before 2011. Tier I employees can be eligible for 3 percent compounded increases in their pensions, something Tobin’s report showed can lead to retirees getting more than $1 million in pension payments over the lifetime of their pension.
Tobin said that’s out of step with the private sector and should concern taxpayers. He said the pension costs are driving a push to change the state's income tax from a flat tax to a progressive one that has higher rates for higher earners.
“I just want people to realize this is why they want to raise the income tax again,” Tobin said. “This is why they have increased the income tax. This is why [Gov. J.B.] Pritzker wants to raise the income tax with his income tax increase amendment.”
Gov. J.B. Pritzker successfully got the legislature to put a question to voters on the November 2020 ballot to change the state constitution's flat income tax to a structure with higher taxes for people who make more.
Instead of that, Tobin said there should be an amendment to allow for a reduction of pension benefits. That idea has not advanced at the statehouse as both Democratic majorities and some in the Republican minority have said pensions are a promise to workers that the state must honor. Those pushing for reducing benefits have said Illinoisans are overtaxed and with pensions costing taxpayers a quarter of every dollar they give the state in taxes, pension benefits are crowding out other taxpayer-funded services.
And it’s not just state pensions. Tobin said he's also concerned about municipal pension funds.
“Champaign area government pensions take a 50 percent bite out of property taxes just to fund the [Illinois Municipal Retirement Fund], police and fire retiree funds,” Tobin said.
Other cities around the state, such as the capital city Springfield, have reported all of their share of property taxes being used to make pension payments.
Tobin’s organization plans other news conferences around the state in the coming weeks.