Last March CHICAGO MAYOR RAHM EMANUEL WARNed OF DOUBLED PROPERTY TAXES TO FUND SPIRALING PENSION COSTS
Illinois has one of the worst pension messes in the nation as the cost of government employee benefits is sending state, county, and local governments into bankruptcy crises all across the state. No place has more trouble than Chicago, prompting Mayor Rahm Emanuel to warn that property taxes will have to double to serve that spiraling debt.
In 2015 Chicago faces a looming financial disaster with a municipal pension system that is in worse shape than that of any other major U.S. city. Chicago is under the gun for a whopping $1.07 billion balloon payment on its $19.4 billion pension debt for city employees. Chicago’s mayor is struggling to figure out how to pay the balloon payment, which is equal to one third of the city’s entire budget. According to The Wall Street Journal, the balloon payment alone could pay for the salaries of the Chicago Police Department’s entire 4,300 officer force or for the re-paving of all 16,000 blocks of roads in the city.
The city fathers have made some furtive attempts to address the crisis.
“Last month, Chicago’s city council approved the issuance of $500 million in commercial paper and $900 million in general-obligation bonds purportedly to refinance existing debt and improve public works,” the Journal reported early in March. “There’s little to stop politicians from pouring the proceeds into pensions – or later reneging on this unsecured debt if it were to file for bankruptcy.”
The shortfall to the pensions amounts to $7,100 per Chicago resident.
In any case, if something else isn’t done, Mayor Emanuel is warning that he’ll have to double property taxes to fund the
payment.
The municipal pension fund isn’t the only pension in failure in Chicago. The city’s teachers’ pensions are also widely understood to be one of the worst-funded in the country. The teachers’ pension fund will require a tripling of its required contribution.
“The Chicago teachers’ pension fund is roughly 54 per cent funded, far below the 80 per cent threshold considered healthy,” Financial Times reported last December. “But it is better off than the city’s municipal workers, police, labour and firefighters’ pension funds, which Fitch, the credit rating agency, estimates are collectively 33 per cent funded.”
Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago, though, warns that just raising taxes and cutting services won’t fix the problem.
“I don’t think either one is even a possibility. Everybody’s going to have to give something,” Pagano said in December.
Meanwhile, the State of Illinois already comes in at second place in the number ofcitizens moving out of state. Outward migration for The Land of Lincoln ranked second only to New Jersey in 2013
Don't be surprised if Chicago files for bankruptcy. It's the only way out.
ReplyDeletepLans are being made. all of it comes out after tues day. they wil blame everythin in daley.
ReplyDeleteAnd rightfully so....he had the salad years with money coming in by the boatload and he went along with this pension lunacy....the double dipping...the triple dipping....he even did so himself. And all the Proud Union Homes voted for the "regular guy"....Ritchie....the s**t is about to hit the fan.....I also think they will blame everythinG On Daley....I say again....a lot of my fellow union private sector workers....plumbers, carpenters, electricians etc...etc...have had it ALOT harder over the past almost SEVEN YEARS. Years during which we had a Democrat Alderman. Democrat council. Democrat Mayor.. Democrat County Board Pres...Democrat County Board. Democrat controlled Illinois Senate. Democrat controlled IL House of Representatives. Democrat Governor of IL. Democrat controlled Senate....Democrat controlled House of Reps (some of the time).....and of course El Presidente....Barack Obama....Democrat. I am starting to sense a trend. P.S. - when I use the word "Democrat" you could easily substitute the word "Socialist" and you would be about as accurate. Seems like the 19th Ward will never see the truth until they get their pension "readjustment" or their property tax "adjustment"......(doubled that is).
DeleteDon't panic. In the bills payable in 2014, Chicago's composite tax rate was 6.848%,
ReplyDeleteBUT most of that went to the Bd of Ed. The City itself only taxed our property at 1.496%.
If the City doubled its share of the taxes, our tax rates would rise from 6.848% to just about 8.3%, still less than most suburbs.
Oh....in that case this is just swell. And the next time it will only be 1.34% and the next time it will be only 1.77% and on and on. You have to remember too that comparing Chicago to the suburbs you have to account for what I like to call the "invisible" tax which is the price many of us have had to pay to send our kids to private schools....at 5k per year and 11k for HS. When you add it ALL up...not so nice....and not still less than most suburbs.
DeleteYou better panic. The property tax bill for every Chicago property owner will double. The city is not merely doubling the City's portion of what is collected on a property tax bill. Do the math genius.
DeletePlease show us your math, sir.
DeleteLast year's tax bill. $200,000 home with homeowner exemption.
ReplyDeleteChicago: $3172.00
Evergreen Park: $6204.00*
*EP tax rate: 13.412% of equalized assessed value.
Doesn't anyone care that this guy thinks that there are only 4300 people on the CPD. Probably meant CFD however if he can't even get basic things correct why believe his long term projections.
ReplyDeleteGranted there is a pension crisis but don't blame anyone except yourselves. You kept electing the Dems and now you must reap what you sewed.