Illinois Pensions in a Fiscal Context: A (Basket) Case Study

Jeffrey R. Brown, Richard F. Dye

NBER Working Paper No. 21293
Issued in June 2015
NBER Program(s):Program on the Economics of Aging, Public Economics Program

Illinois’ public pensions are among the worst funded in the nation. We present evidence that the main reason for Illinois' underfunding is a history of making inadequate contributions, dating back to the origins of the state's pensions. We discuss the recent history and legal status of pension reform efforts in the state. Using a fiscal model of the state's finances, we project how Illinois' fiscal situation may evolve in the future. A key finding is that with or without pension reform, Illinois will continue to face significant structural deficits that will require revenue increases and/or additional spending cuts to address.

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Document Object Identifier (DOI): 10.3386/w21293

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