Illinois’ Spending Surge and Pension Shell Game: Taxpayers Left on the Hook

Under Gov. J.B. Pritzker, Illinois’ budgets have swollen, debt has been shuffled, and taxpayers are left footing the bill — while retirees’ futures hang in the balance.

By Staff Reporter
September 24, 2025

The story of Illinois under Gov. J.B. Pritzker is a story of excess, illusion, and looming crisis. Since he first walked into the governor’s office nearly seven years ago, state spending has ballooned by more than $16 billion — a staggering 43% increase. Lawmakers in Springfield celebrate “balanced budgets” and temporary gains. But beneath the surface, the state is playing a dangerous shell game with its finances, moving debt from one pocket to another, gambling with taxpayer dollars, and leaving retirees to wonder whether their pensions — the promise of a lifetime of work — will still be there tomorrow.

“Having one party basically in control over your state gives a bit too much power to do whatever they want,” said Ravi Mishra, researcher at the Illinois Policy Institute. His words cut to the heart of Illinois’ political reality: for decades, Democrats have run the show, and under their watch, the state has slid deeper into fiscal quicksand.

A Spending Explosion Like No Other

Illinois has always wrestled with a structural deficit — the gap between what it spends and what it reliably takes in. But under Pritzker, the appetite for spending has turned ravenous.

In 2019, Illinois’ general fund sat around $39 billion. Today, it exceeds $55 billion. That jump — more than $16 billion — represents not just inflation but deliberate choices to grow government at every turn.

Billions have been poured into Medicaid expansion, nutrition subsidies, education initiatives, and economic development projects. Yet for many ordinary Illinoisans, the results feel hollow.

“Has anybody’s quality of life really increased?” asked State Rep. Blaine Wilhour, R-Beecher City. “People are paying more and more, yet they’re getting less in return.”

That frustration is shared at the kitchen tables of families across the state. “My property taxes are higher than my mortgage. That’s why we’re leaving for Indiana. We can’t afford to stay here,” said John and Maria S., a young couple from Rockford. Their story is part of a larger exodus — more than 100,000 residents have left Illinois in the past decade, leaving fewer taxpayers to shoulder the load.

The COVID-19 pandemic supercharged spending. Federal stimulus dollars poured into Springfield’s coffers, allowing lawmakers to grow the budget by $6 billion in just three years. When that lifeline ended, instead of scaling back, they raised taxes — on corporations, tobacco, vaping, and sports betting — squeezing families and small businesses for another $1 billion in revenue this year alone.

“I employ 12 people. Between higher fees and new corporate taxes, I’m being squeezed out. The state talks about helping small business, but they’re driving us away,” said a manufacturer in Decatur.

Winners and Losers in Illinois’ Spending Surge
Illinois’ spending spree hasn’t been evenly spread. Beneath the headline numbers are clear winners and losers:

Winners:

• Education Bureaucracy – K-12 and higher education budgets have swelled, with billions funneled into administration and “equity” programs. Yet critics argue classrooms and teachers haven’t seen proportional benefits.

• Healthcare for Illegal Immigrants – Despite deep deficits, Pritzker and lawmakers preserved taxpayer-funded healthcare for illegal immigrants, costing the state hundreds of millions annually.

• Economic Development Projects – Chicago redevelopment and union-heavy contracts continue to be funded, benefitting insiders more than taxpayers.

• Government Payroll – Salaries and benefits for state employees have climbed, swelling an already unsustainable pension system.

Losers:

• Taxpayers – Property taxes remain among the nation’s highest, with annual hikes that often surpass wage growth.

• Small Businesses – Corporate tax hikes and fees have pushed employers to the brink. Many are choosing to relocate.

• Rural Communities – Downstate Illinois continues to be neglected, with most new spending clustered in Chicago and surrounding metro areas.

As one budget analyst admitted off the record: “Springfield is picking winners and losers — and taxpayers are always at the bottom of the list.”

A Legacy of Democratic Mismanagement

Illinois’ fiscal disaster didn’t emerge overnight. It is the product of decades of Democratic control. Since the 1970s, Democratic legislatures and governors have repeatedly chosen short-term political wins over long-term fiscal health.

They raided or skipped pension contributions, used gimmicks to “balance” budgets, and embraced borrowing schemes to cover shortfalls. Pension obligation bonds — debt instruments sold to cover unfunded pension liabilities — became a favorite trick, despite warnings that they only delay the inevitable.

Even during Republican Bruce Rauner’s tenure (2015–2019), Democrats controlled the legislature and held the purse strings. Rauner vetoed budgets; Democrats overrode him. The result: the fiscal crisis deepened.

Linda K., a retired teacher from Peoria, put it bluntly: “I gave thirty years to the classroom, and now I lie awake wondering if the check will clear next year.” Her fear is the product of decades of political decisions — and Democratic leaders who chose gimmicks over guarantees.

“This is not a bipartisan failure. Illinois’ debt disaster has Democratic fingerprints all over it,” said one watchdog who has tracked state finances for decades.

The Pension “Fix” That Isn’t

The most recent gimmick came in September 2025, when Illinois quietly used $186 million from a new bond sale to plug its pension hole. On paper, the state reduced its unfunded liability. In reality, it simply shifted debt from pensions to bonds.

“It’s no different than moving debt from one credit card to another,” wrote analysts at Wirepoints.

The new taxable bonds carry an interest rate of 4.55%. Pension funds will now gamble with the borrowed money, investing it in hopes of earning more than the interest they owe. If markets stumble, taxpayers will lose twice: once on the interest and again on pension shortfalls.

The $186 million shuffle is small compared to Illinois’ $144 billion in unfunded pension liabilities, but it underscores the state’s addiction to fiscal illusions. Instead of solving the problem, leaders keep playing games.

And make no mistake: this maneuver wasn’t about fixing pensions. What the administration really accomplished was giving Gov. Pritzker a talking point for the campaign trail as he eyes a third term — a chance to say he “reduced the pension debt.” But that’s all it is: a soundbite, an illusion crafted for political survival. The underlying problem hasn’t changed. Taxpayers are still on the hook, and retirees are still at risk.

National Stakes: Pritzker’s Blueprint for America?

Illinois is not just a state in crisis. It is a warning sign for the entire nation. Gov. Pritzker is already being floated as a potential presidential contender in 2028. If his fiscal model — soaring spending, relentless taxation, and pension gimmicks — becomes a national blueprint, every American taxpayer should take notice.

“Illinois is the laboratory — and the experiment is failing. If this model is exported nationwide, every taxpayer in America should worry,” said one fiscal analyst.

The Path Forward: Reform or Ruin

Illinois is not doomed — but only if voters demand change. Reformers point to a clear path forward:

• Cap annual spending growth to match inflation plus population.

• Ban pension obligation bonds and commit to full, transparent contributions.

• Restructure pensions with new tiers and hybrid models to ensure sustainability.

• Broaden the tax base by applying sales tax to services, not just goods, instead of punishing property owners and small businesses with higher rates.

• Enforce fiscal transparency to end backdoor borrowing and budget gimmicks.

But these reforms won’t come from the current political class. After decades of mismanagement, it is clear Illinois’ Democratic leadership will not fix the mess they created.

That responsibility now falls to the people. Illinois voters must demand accountability — at the ballot box, in the courts, and in the streets — or resign themselves to higher taxes, more debt, and broken promises.

Conclusion: The Clock is Ticking

Illinois stands on the edge of a fiscal cliff. On one side is unchecked spending; on the other, crushing pension debt. Retirees should not have to lie awake at night wondering if their pensions will vanish. Families should not have to flee across state lines to find affordable living. Small businesses should not have to shut their doors under the weight of taxes designed to feed an ever-growing bureaucracy.

And yet, under Pritzker and decades of Democratic rule, this is exactly where Illinois finds itself. The time for illusions is over. The time for reform is now.

The question is not whether Illinois can afford reform. The question is how long it can survive without it. And unless Illinois voters act, the answer may be: not much longer.

Sources:

• Illinois Policy Institute (public finance research)

• Center for Tax and Budget Accountability (tax and spending analysis)

• Wirepoints (public pension debt reporting)

• Illinois state budget and pension data