
Illinois faces the highest debt-to-asset ratio of any U.S. state at 468.7%, meaning the state owes nearly $5 for every $1 in assets. The $187.7 billion net unfunded liability represents a structural deficit that requires either massive tax increases, spending cuts, constitutional pension reform, or a combination of all three to address. The delayed financial reporting raises additional concerns about transparency and the actual current state of the finances, which could be worse than these already dire figures suggest.
Total Illinois Government Obligations – Comprehensive Picture
Total State Liabilities: $248.67 billion Total State Assets: $53.05 billion
Net Unfunded Liability: $187.7 billion in unfunded liability
Debt Ratio: 468.7%, the largest in the U.S.
This means every person in Illinois’s 12.7 million population would need to pay $14,780 to eliminate the state’s unfunded obligations.
Breakdown of Major Obligation Categories
1. Pension Unfunded Liabilities: $143.7 billion (as of latest COGFA report)
- This represents the largest component of the state’s obligations
- Pension obligations are not constituted of borrowing or financing, but rather are actuarially estimated payments that the State is obligated by law to pay in the future
2. Bonded Debt: $38.1 billion in total outstanding debt
- Over the past ten years, the State of Illinois has reduced its total amount of outstanding debt by 13.5%, or $5.9 billion, from $44.0 billion to $38.1 billion
3. Major Bond Categories:
- General Obligation (GO) bonds for capital projects, GO bonds for pension obligations, GO bonds to pay backlogged bills and Build Illinois revenue bonds
- Pension Obligation Bonds: $8.4 billion in principal and interest is scheduled to be paid by the maturity date of June 2033
- Bill Payment Bonds: $2.8 billion in principal and interest is scheduled to be paid by the maturity date of November 2029
- Pension Buyout Bonds: $1.8 billion of $2.0 billion authorized has been issued
Critical Financial Reporting Issue
Severely Delayed Financial Reporting: Illinois still has no ACFR for 2023, a fiscal year that ended over 565 days ago, while states have averaged just 200 days to publish their ACFRs. This means the most current comprehensive audited financial data is over 2.5 years old.
Actionable Financial Impact Details
Annual Debt Service Growth:
- Current pension contributions: $11.2 billion in FY 2025
- Projected to grow to $18.5 billion by 2045
- Governor Pritzker’s FY2026 budget proposal projects a year-over-year reduction in debt from the prior year of approximately $200 million, or 0.5%
New Bond Issuances: The State plans to issue nearly $2.1 billion in new GO bonds to fund capital projects in FY 2026, up from $1.3 billion in FY 2025.
Additional Context – Local Government Debt
The state-level figures above don’t include local government obligations. Historical analysis suggests that when including all state and local retirement obligations, state and local governments in Illinois owe more than $203 billion for pensions and retiree health insurance (though this figure is from 2017 and would be significantly higher today).










