Debt Forgiveness Won’t Shield Students from Illinois’ Pension Pinch



Families in Illinois are now burdened with the fourth most expensive in-state tuition prices in the nation, and the highest in the Midwest. 

Take U of I’s flagship Urbana-Champaign campus, with base tuition and fees now starting at $17,138 a year. In comparison, a Big-10 education for in-state students attending Indiana University-Bloomington or the University of Wisconsin-Madison costs nearly $6,000 less.

Illinois schools cost more because most other states don’t have Illinois-sized pension debt – most recently estimated at $140 billion by the Commission on Government Forecasting and Accountability. 

Illinois Policy Institute research shows state funding has declined for higher education operations by 26%  in real terms from fiscal year 2007 through fiscal year 2022, while spending on university pensions has exploded by 514%.

Another way of looking at it is the State Universities Retirement System pension payments accounted for 9% of the state’s higher education spending in 2007. Today, they account for 44% of total higher education dollars. That translates to $776 million less for colleges and universities to allocate toward services that directly benefit students in 2022.

Author(s): Amy Korte

Publication Date: 14 Sept 2022

Publication Site: Real Clear Policy

Memo to Dems: Don’t Lift SALT Cap to Help the Rich, Help States Directly Instead



But at a national level, it is much less clear that the SALT deduction makes for good politics. Most of the key swing states, including Georgia, Pennsylvania, North Carolina, New Hampshire, and Arizona were below the national average in the value of the SALT deduction as a percent of adjusted gross income before the new cap. Florida and Nevada were in the bottom seven states.  

Of course, states and local governments do need help from the Federal government. In fact, more help is needed now more than ever. The pandemic is hurting state and local government revenues, to the tune of around $350 billion over the next three years. Now is the time to enact a better federal support system for states and localities, and to replace the SALT deduction, rather than revert to the previous system. 

The good news is that there are a number of good policy options available to legislators, many of which were outlined at a recent Brookings event on this subject, and any of which would be much fairer and more effective than lifting the SALT deduction cap. The key point is that Congress should help states directly, rather than through the long, roundabout route of a regressive tax break to individuals.  

Author(s): Richard V. Reeves, Christopher Pulliam

Publication Date: 1 March 2021

Publication Site: Real Clear Policy