Tuesday, March 11, 2014

CHICAGO PENSION RED ALERT

2010-02-19_3000x2000_chicago_skyline
CHICAGO - Last week, the Wall Street Journal featured a sobering piece about Detroit, bankruptcy and pensions. Then they turned their attention to the"Public Pension Red Alert" facing Chicago taxpayers:
Perhaps the biggest pension landmine outside of Detroit is Chicago. The Windy City next year must make a $1.07 billion balloon payment—equal to a third of the city's operating budget—on $19.4 billion of pension debt. The pension payment could cover salaries for 4,300 police officers or the resurfacing of 16,000 blocks of road, and Mayor Rahm Emanuel has warned that property taxes may have to double to pay the bill.

Meantime, the required pension contribution for Chicago schools this year is tripling to $613 million. Chicago unions are pressing the state government to raise property, sales, income and corporate taxes to bail out worker pensions. Chicago's pension funds are only half as well-funded as even Detroit's, if you can believe it, and could run dry by 2020. With state politicians up for re-election this November and Chicago's mayoral race next February, it's more likely that investors will foot the bill.
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. 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.
This is a much bigger mess than anybody thinks.

6 comments:

  1. Anonymous3/11/2014

    Whos fault is it that you are in this position now ? The Democrats of course. The Democrats have run virtually everything in Illinois since 1996 (that's 18 years for the low information voters). They have run Crook County for even longer...and have run our city and court system for generations !!! Yet your unions continue to keep telling you to vote Democrat....otherwise the Republicans are going to take things away from you. Seems like
    the Democrats have done an excellent job so far...and with Quinn and Rahm back in office they are ready to drop the hammer on you. It truly is unfair....but it is at least in part...your own fault. p.s. - Maybe if your Democrat left wing union bosses did not support these Democrats who have been pissing away your pension money by giving it to the urban welfare society - maybe they could have funded the pensions properly.

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    1. Anonymous3/12/2014

      Gov. Jim Thompson signed legislation back in 1989 that turned over pension funding to political cronies and allowed for "future" funding. Of course, it was democratic legislators who wrote the bill.
      Who is to blame?
      We are for electing these guys and allowing them to become career politicians at our expense.
      Stupid is as stupid does.
      So, the real question is; What are you going to do about it?

      Delete
  2. Anonymous3/11/2014

    nobody going to get their pensions

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  3. Anonymous3/11/2014

    What link is there from a pension money to "urban welfare society"? Name one.

    The pensions were unrealistic, empty promises. Either take a significant haircut or risk some municipal bankruptcy deal.

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    1. Anonymous3/12/2014

      No link other than our elected Democrats have crafted together a quilt of special interests who they promise spoils of the city, state and national budgets....this winning coalition has had a strangle hold on our city, state, and now federal govt. The point is that if they were not giving out welfare payments, link cards for free food and barter for other things including drugs, free Obama phones, a new welfare program for free (to THEM) and every other way possible to piss away hard earned tax dollars....they would have the money to pay YOUR pensions. They didn't...and now they don't...and you don't....

      Delete
  4. Anonymous3/16/2014

    CORRUPTION

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