Every Illinois state politician needs to take a look at pension costs relative to other state especially those adjoining Illinois. That is because the adjoining states are where many businesses and wealthy people are going to move to avoid the inevitable higher taxes being proposed in Springfield with the current so-called “pension reform”.
As my research shows (see here) the cost of very pension dollar in Illinois is 3 times the cost in Indiana. Obviously if politicians are really interested in making Illinois economically viable and competitive we cannot continue to over-pay and over pension 10’s of thousands of public employees. High-cost pensions always follow directly from high salaries and in addition to the 16,256 public school employees with salaries over $100,000 the State Journal Register recently wrote about the more than 6,200 state employees with salaries over $100,000. Not to mention the 1000’s at the university level which is not included in the other numbers.
Every public employee who retires with 33-35 years-service and a 4-year average salary of $133,000 retires immediately with a $100,000 pension. Those who retire with average salaries of at least $100,000 will have pension over $100,000 within 10 years of retirement. Since they can retire at age 55 that means before they are 65.
These outrageous salaries are the main reason I project 25,000 pensions over $100,000 by 2020 and my estimate may be too low considering the ever-increasing number of $100,000 salaries in the public sector.
The micro reforms being discussed in Springfield may slow the train down but will only delay, slightly, the inevitable fiscal train wreck.