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Illinoisans are on the hook for nearly $250 billion in unfunded public pension liabilities, or more than $18,000 per resident, according to a credit rating agency.
The latest estimate from Moody’s Investors Service put Illinois unfunded pension debt at $240 billion. In the report, which Moody's released Tuesday on adjusted net pension liabilities from the fiscal year 2018, analysts said Illinois now has significantly more estimated debt than any other state in America. California, which has 26 million more residents than Illinois and a much larger economy, was estimated to have $230 billion in unfunded liabilities, $10 billion less than Illinois.
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“Favorable investment results, along with a rise in interest rates, will reduce liabilities in fiscal 2019 financial statements," Moody's said in a statement. "However, lower returns and declining interest rates in fiscal 2019 will lead to growing liabilities again in fiscal 2020 reporting."
One change to the way state debt will be measured in the future was the inclusion of other post-employment benefits, or OPEBs. By Moody’s estimate, Illinois has an estimated $57 billion in what is essentially future healthcare costs for retirees.
Advocates have warned that the state will face near-insurmountable pension contribution requirements should the economy take a turn for the worse and the state's investments fall short as they did in the years after the Great Recession.
"The pensions are the reason for the bankruptcy in Illinois," said Jim Tobin, founder of Taxpayers United for America. "There are 111,000 retirees in the statewide pension funds who get over $50,000 a year for their pension benefit, not including their medical subsidies."
The state’s total debt was down from fiscal year 2017, when it was $250 billion.