Batinick says income taxes could be two points less if not for unfunded pension liability
Illinois House Republican Leader Mark Batinick (Plainfield) imagines what could be if state lawmakers were more diligent about addressing the state’s runaway pension debt.
“Our income taxes could almost be two points less if we didn’t have the catch-up from the unfunded liability,” Batinick told the Will County Gazette. “Most of what we spend on pensions is from the unfunded liability, not from the normal cost. Our income tax rate could go from 4.95 to 2.95 percent if we didn’t have to make those payments. It’s the unfunded part that’s killing us.”
A new Tax Foundation report finds Illinois ranks almost dead last across the country in funded ratio of public pensions. Based on fiscal-year analysis from 2017, researchers concluded Illinois’ public pensions are funded at just 38 percent, ranking the state No. 48 overall and ahead of only New Jersey and Kentucky.
“Two percent of everybody’s income in this state goes to the unfunded liability portion of pensions for the five public pensions, and that doesn’t even include the local pensions,” Batinick said. “Imagine if we’re at a 100 percent funded rate and what it would do to our property tax rate since so much of our pensions are funded through local property taxes.”
Batinick added he thinks there’s a simple reason why so many lawmakers in Springfield are not as driven as he thinks they should be in dealing with the state’s debt problem.
“Paying off a debt doesn’t translate into anything for anyone,” he said. “It’s not a new program, it’s not a goodie for some of these districts or it’s not a pork barrel project. So, it’s not as exciting for some people down there as some of those other things.”