By: Ted Dabrowski and John Klingner
Illinois household incomes have struggled to keep pace with inflation over the last three decades. In fact, incomes in 40 of the 50 largest Illinois cities are down compared to 1990 once inflation is taken into account. From Normal to Rockford to Waukegan – and even well-to-do Schaumburg – all have experienced income growth lower than the 2.4 percent yearly inflation average since 1990.
Household incomes have been hit by the nation’s highest property taxes, a struggling economy and a weak job market. But now gubernatorial candidates Daniel Biss, Chris Kennedy and JB Pritzker want to hit Illinoisans with another tax hike – most of which will go to pensions.
That wouldn’t be fair, given new research just released by Wirepoints. Residents in cities across Illinois should know what they’re paying for.
Wirepoints found that total pension benefits owed by the state – to teachers, state workers, university employees, judges and lawmakers – have grown at an 8.5 percent annual clip since 1990. That’s seven times faster than household incomes in Calumet City (1.2 percent annually), six times faster than Rockford’s (1.4 percent) and five times faster than Waukegan’s (1.6 percent).
Total pension benefits are overwhelming the state and the ordinary Illinoisans’ ability to pay for them.
Even compared to Plainfield, which had the highest annual household income growth of Illinois’ largest 50 cities outside Chicago, pension benefits owed to state workers still grew 2.25 times faster than the city’s incomes.
When measured over the whole period of 1990-2016, pension benefits grew 736 percent while household incomes in Plainfield grew just 167 percent.
The impact on residents in cities with slower income growth is even more dramatic. Residents in cities like Rockford and Danville have seen their incomes lose ground to inflation. Inflation is up 84 percent over the entire period, while household incomes there have grown less than 50 percent.
Illinoisans are losing out everywhere they turn.
Their incomes are are stagnant. They’ve just been hit with a record $5 billion dollar income tax hike. They have to pay the nation’s’ highest property taxes.
And they’re losing access to state services as pensions eat up more and more of their tax dollars. Most new state tax dollars have gone to pay for rising pension costs instead of services. Pension costs now consume more than 25 percent of the state’s budget and will do so for the next 25 years according to Illinois’ Commission on Government Forecasting and Accountability.
That’s why the current narrative surrounding the pension crisis should infuriate Illinoisans.
The state’s political elite have the gall to say underfunding is the cause of the crisis. That implies that taxpayers haven’t put enough money in.
But underfunding hasn’t been the issue. Instead, it’s the dramatic growth in total pension benefits promised by politicians that’s been bankrupting Illinois.
Illinoisans have paid their fair share into pensions. They should reject any attempt for additional tax hikes.
Instead, Illinoisans should pressure their lawmakers to use every constitutional lever they can to reduce the growth in benefits they so foolishly or maliciously promised.