The concept of a bankruptcy filing as a way of fixing the pension mess, was brought up by Mayor Daley at a forum at UIC, yesterday. The reason why he brought it up? Because it's the most politically expedient way of fixing a problem that has been allowed to get out of control. According to the Sun Times, the other option of making the city pay their contributions would result in the property tax rates almost doubling, an option the pols find unacceptable. They would rather stick it to the retiree's. A majority of who don't live in the city any longer and can't vote.
Under a bankruptcy filing, a city retiree receiving $3,500 per month would be reduced to a monthly payment of $2,300 a month. A widow getting $2000.00 a month would be reduced to $1,200.00. ETC. ECT. The total value of the haircut would be about 30% across the board. Contributions would also be increased slightly. The city would probably also take advantage of the situation and renegotiate it's existing collective bargaining agreements. The blueprint for all of this can be found in the bankruptcy of United Airlines, 5 years ago. Everyone's salaries and pensions got a major trimming there.
The fact that Daley brought it up means that it is on his mind. I doubt if he will pull the trigger on it. Ego won't allow him to do it. It will be up to the next mayor to deal with it. The good thing about all this? The city will probably be able to get out of the parking meter contract.
