State Pension BOMBSHELL: $145 Billion Black Hole Grows

Trash bin filled with one hundred dollar bills

Illinois is shelling out six-figure pensions to tens of thousands of former public employees while the state’s finances spiral deeper into the red—an irony so rich, you’d think the whole thing was a parody if you didn’t live here and pay for it.

At a Glance

Nearly 32,000 Illinois government retirees collect over $100,000 per year in pension payouts
Tier 1 pensioners, protected by the state constitution, account for almost one-third of all pension payments
The state’s pension debt has soared to a nation-leading $145 billion in unfunded liabilities
Taxpayers face crushing property and income taxes as pension costs crowd out essential public services

Retirement Gold Rush: Six-Figure Pensions While Illinois Bleeds Red Ink

The numbers don’t lie—about 32,000 former Illinois public servants are living the retirement dream, pocketing over $100,000 a year in pension payouts. That’s not a typo. In fact, 22 lucky retirees now rake in more than $400,000 annually. Meanwhile, the state’s pension crisis has ballooned into a $145 billion headache that puts Illinois at the very bottom of the national heap for responsible fiscal management. These high-rolling retirees represent around 13% of all pensioners, but they take nearly a third of the $13.2 billion paid out in 2024. This is happening even as Illinois grapples with a shrinking population, sky-high property taxes, and a credit rating that’s hanging by a fraying thread.

All of this is possible thanks to the state’s so-called Tier 1 pension system, a gold-plated retirement plan designed for state and local workers hired before 2011. Tier 1 lets public employees retire early, guarantees them generous monthly checks, and—just for good measure—throws in annual 3% compounded cost-of-living increases. Try finding that deal in the private sector.

Taxpayers Left Holding the Bag as Reform Hits a Wall

While public retirees enjoy their taxpayer-funded bonanza, Illinois families are getting squeezed dry. The average property tax rate in Illinois now sits at 2.11%, more than double the national average. The state’s pension obligations are so out of control that they are crowding out funding for schools, roads, and social services. Taxpayers are footing the bill for a system that’s legally rigged against them: the Illinois constitution prohibits reducing any previously earned pension benefits, and the state Supreme Court has slapped down every attempt at reform. So, while unions and retirees enjoy ironclad legal protection, the rest of us get stuck with the tab and fewer essential services.

This isn’t just a budgetary nuisance. The pension mess is pushing people and businesses to flee the state, eroding the tax base and making the problem even worse. It’s a vicious cycle: as costs soar, services get slashed, and taxes go up, more folks pack up and leave. But don’t expect Springfield’s political class to fix it—after all, lawmakers are also pension beneficiaries. Funny how that works.

Legal Shackles and Political Paralysis: No End in Sight

Any rational person would expect a crisis of this scale to spark urgent action. But in Illinois, common sense is always the first casualty. The state’s politicians have tried to tinker around the edges, introducing a less generous Tier 2 plan for new hires back in 2011. Yet the bulk of the liability sits with Tier 1 retirees, who are untouchable thanks to constitutional protections. Even the Illinois Policy Institute, a fiscal watchdog, has thrown up its hands, calling the current system “financially unrealistic and unsustainable.” Academics and experts have warned that only a constitutional amendment could pave the way for meaningful reform. Good luck with that—unions and public sector lobbyists have the legislature in a headlock, and there’s little appetite for change from those who benefit most.

The bottom line? Illinois has become a cautionary tale for the rest of the country. When government promises outstrip reality and accountability is nowhere to be found, the people who played by the rules—taxpaying citizens—are the ones left standing in the wreckage. If you’re looking for a blueprint on how to bankrupt a state in the name of “retirement security,” look no further. The only thing more reliable than a Tier 1 pension check in Illinois is the certainty that the taxpayer will always be on the hook—until there’s nothing left to give.