Breitbart – by WARNER TODD HUSTON
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 of citizens moving out of state. Outward migration for The Land of Lincoln ranked second only to New Jersey in 2013.
7 thoughts on “Chicago Mayor Rahm Emanuel Warns of Doubled Property Taxes to Fund Spiraling Pension Costs”
Now for those that want to leave it will be impossible to sell their homes. I see more foreclosures coming if this goes through.
All municipalities Invest taxpayer funds(illegally) in what are know as federal cafr funds. cafr stands for corporate annual financial reports.
these cafr funds make substantial amounts of roi’s. these windfalls should be repaid into the tax base and or annuities issued to all taxpayers within that taxing area. failure to do so is misprision of a fiduciary. if you are ever faced with a tax foreclosure, demand an accounting ledger of the cafr fund for your county. you will be surprised at what you find.
Exactly what I was thinking, Millidude, that tax monies and pension funds have been fraudulently diverted to illegally created accounts, and none of the municipal residents will have any idea of how much is being illegally sequestered or how it is being used until they demand release of the CAFR accounts and valid audits of all revealed accounts.
why are the tax payers being made responsible for the cities irresponsible behavior in allowing pensions to be under funded?
yeah really smart kick the funding sector in the backside right when we are struggling just like everyone else..than go and make their property unable to sell due to policy and over taxation..
maybe these in Chi town deserve what they get and all the others that allow this , after all they vote these pukes in, and allow them to run all over them.
Double the property taxes,yeh,good luck with that!
“…maybe these in Chi town deserve what they get and all the others that allow this , after all they vote these pukes in, and allow them to run all over them.”
You REALLY need to squash that “voting” cr@p, Tom.
IT MAKES NO F’N DIFFERENCE WHO’S IN OFFICE! THERE’S NO SUCH THING AS AN HONEST POLITICIAN!! THEY ALL WORK FOR THE SAME F’N SCUMBAG ZIONIST ASHKENAZI SO-CALLED ‘JEWS’!!!
Have I made myself perfectly clear?
They need another “Community Organizer” – Can’t we send them back one of the ones they had??