State Representative Amy Grant Rejects Current Pension System

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With the newly-created Property Tax Relief Task Force looking into ways to provide relief for high property taxes throughout DuPage County and the rest of the state, a potential solution is pension reform. Taxpayers in Illinois pay almost 80% of the total pension contributions, which equals over 7 billion dollars a year, compared to state employees who only contribute around 2 billion a year. As a result, Illinois pensions are only 40% funded and have experienced a 15% decline in funding in recent years.


“In contrast to the growing accounts of 401(k) members, pensioners are watching the funding level of their pension plans collapse,” said Grant. “Illinois state pension plans are missing over 60 percent of their funds. Illinois workers in traditional pensions are owed $130 billion and counting. This comes at a time when returns on investment are at a record high for this decade.”


Grant continued, “With pension debt as of the end of the 2018 fiscal year topping out at over $136 billion dollars, something must be done to lower this, which does not include additional strain on our taxpayers. With increased contributions from employees, the tax burden on Illinois residents will be lessened.”


According to Grant, Wisconsin has a fully funded pension program, funded almost entirely through full actuarial contributions* and proper risk management techniques, leading to a much lower burden on the taxpayers. “If Illinois can follow this plan, institute proper risk management policies, and practice sound investing, the need for excessive taxes will be lifted and the property tax rates will decline. It is clear to see that it is possible for Illinois to lower its property tax rates through comprehensive pension reform.”

*Based on NCSL magazine research