With the Illinois state pension shortfall ballooning to $100 billion, a new report has analyzed Chicago’s total debt and uncovered a pension crisis looming in the third largest city in the United States, according to Senator Jim Oberweis.
The report, released September 17 by the nonpartisan Illinois Policy Institute, has revealed that government agencies in Chicago have accrued a combined debt of $63.2 billion from pension, retirement-related and other debt. This amounts to $61,000 per household.
“Every Chicago household will have to pay more tax dollars for fewer services because politicians have refused to make real reforms to a broken system,” Senator Oberweis said. “We have reached a point where the only solution involves a fundamental break from the status quo. Chicago needs a private sector solution to a public sector problem where city workers and teachers control their own retirements.”
The only plan that will solve Chicago’s debt crisis is one that ends its dependence on the defined benefit pension system and follows the lead of the private sector, by converting its retirement system to 401(k)-style plans.
At the state level, Senator Oberweis has advocated for Senate Bill 2026 and House Bill 3303. These would fix the fundamental problem with Illinois pension system and create a solid foundation for growth across the state. The only remedy that can bring Chicago out of this crisis is one equivalent to these proposals. The city of Chicago, like the state, needs fundamental pension reform.