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

Source: Jeffrey R. Brown, Richard F. Dye, National Bureau of Economic Research (NBER), NBER Working Paper No. w21293, June 2015

From the abstract:
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.