Governor Pritzker will deliver his annual State of the State address on Wednesday at the Capitol.
The state faces some serious challenges as we move into the 2026 legislative session. Prices are rising, energy costs are going up, the state’s unemployment rate remains higher than in most of the country. Meanwhile, the big-spending state budgets of the past few years are outpacing the ability of the state’s revenue streams to keep up – even with all the recent tax increases (which I opposed).
This year we are going to have to get serious about controlling spending and balancing our budget without raising taxes. The budget should support our important priorities, like education, farmers, veterans, public safety and transportation, while avoiding wasteful spending or pork-barrel projects in favored legislative districts.
Last year the Governor used his State of the State speech to compare his political opponents to Nazis. I hope we hear a more constructive set of proposals this year.
Pension deficit stands at $140 billion
Illinois maintains five state-managed pension systems which provide pension benefits to different groups of public sector employees. The different systems serve public school educators, state government workers, state university educators, judges and state legislators. All five are underfunded to a combined tune of $140 billion.
Professional actuaries are able to look at the contractual obligations of the state and the age profiles of future beneficiaries and develop close estimates of how much money will need to be paid out in future retirement benefits for members of these five pension systems. Using different actuarial assumptions can produce even higher deficit figures, some as high as $200 billion.
Last week, with this stubborn deficit continuing, Governor Pritzker proposed extending the state’s pension buyout program. Under the buyout program, those who have vested pension status are asked to consider accepting an immediate lump sum in lieu of future pension payments. The governor previously set a goal of reaching 100% funding of the state’s pension obligations by 2048. He says he still intends to meet that goal.