Senator Wilcox Targets Growing Local Pension Sustainability Problem

State Senator Craig Wilcox (R-McHenry) joined colleagues from the Senate and House and an independent financial watchdog group on Wednesday to draw attention to a growing crisis in Illinois—the unsustainability of local government pension systems.

Wirepoints, an independent, nonprofit company that researches Illinois’ economy and government through an examination of fiscal policies, recently concluded a comprehensive project that scored the state’s largest 175 cities on 10 metrics relative to the health of local pension systems between 2003-2019.

“Pension sweeteners offered to state employees over time in exchange for union support is a primary contributor to Illinois’ debt crisis, and while the unsustainability of the state’s publicly funded pension systems gets a lot of media attention, the growing local pension crisis poses the greatest new threat for taxpayers,” said Sen. Wilcox. “We need look no further than the state’s heavy-handedness, greed over budget dollars, and collective bargaining laws that strongly favor unions to see how problems have rolled downhill and are now impacting our cities and villages.”

Sen. Wilcox went on to explain that an endless stream of unfunded mandates handed down to local units of government and frequent sweeps of Local Government Distributive Funds (LGDF) have left cities and villages with few options for balancing their budgets, none of them good.

“Our municipal leaders have to make very difficult decisions,” added Sen. Wilcox. “Because pension payments to retirees must be paid, municipal leaders must decide if they would rather decrease staff and the level of services, like police, fire, and public works, or if they want to increase taxes locally on constituents who are already overtaxed. In McHenry and Lake Counties, residents pay some of the highest taxes in the nation, so our municipalities have, in most cases, chosen to reduce staff. This, in turn, creates the current crisis where there are more retirees collecting pension benefits than there are employees currently paying into the system.”

While all municipalities in the 32nd District are struggling, Sen. Wilcox pointed to the City of Crystal Lake, where taxpayers today contribute more than three times the amount of taxes toward local pensions than they did in 2003, while Crystal Lake’s pension obligation quadrupled during that time. He also pointed to the City of Woodstock, which saw it’s pension obligation double over the last ten years.

“As local pension costs continue to eat up a greater percentage of local government budgets, essential local services are being crowded out,” Sen. Wilcox said. “The State of Illinois needs to stop trying to solve its own financial mismanagement problems at the expense of our local communities. They need to get out of the way, stop with the unfunded mandates and fund sweeps, and allow our cities and villages to operate without interference.”

Click here to watch Sen. Wilcox’s remarks during the press conference.

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