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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):The Program on Aging, The 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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