SPRINGFIELD, Ill. (WAND) - According to new research done by the University of Illinois Springfield's Institute for Illinois Public Finance, the state's public employee pension systems and downstate police and fire pension systems are not being adequately funded.
Distinguished Professor of Public Administration Kenneth Kriz said this is a big problem for the state.
"Illinois is headed for a lot of pain, and a lot more pain than people even realize," Kriz said. "'There's not enough for them to be able to make payments they promised to workers as they retire."
Kriz has been doing research on pensions for nearly 10 years and said the contribution levels are crucial, because there are only three levers policymakers can use to try to address pension funding shortfalls.
"You could in a lot of areas, either cut benefits or make workers contribute more for their benefits," Kriz said. "You can increase your contributions or you can get better returns out of your investments."
According to Kriz, the money for these pensions is mainly coming out of taxpayer dollars and ultimately, he said it comes down to the state raising taxes or cutting other services in order to be able to make the payments.
"On average, it's roughly 20 to 25 percent of their property tax bill," Kriz said. "It's the citizen that will really have to pay the price for this."
Kriz does say there is a fourth option.
"They scrap the 2040 rate and push it to 2060," Kriz said. "But the state of Illinois is one level above junk bond status. It's not a great situation, and it makes the state less attractive for businesses to come to and for citizens to move into."
Kriz said this problem started with a forward-thinking mentality.
"If you're a lawmaker and you're facing re-election in four years, do you want to take the pain now, to make the appropriate level of contribution, or do you want to shift it off into the future to see if maybe you're in office, maybe you're not in office," Kriz said.
According to Kriz, the pension liability at the state level is estimated to be around $30 billion.