Chicago

Size Of Cook County Sales Tax Hike Necessary?

No surprise here. Hal Dardick reported on the Chicago Tribune website yesterday:

Cook County Board President Toni Preckwinkle persuaded just enough commissioners to approve a 1-percentage-point sales tax increase Wednesday — the culmination of a major political about-face, but a move she said was needed to bail out the county worker pension system.

Following weeks of one-on-one lobbying sessions by Preckwinkle, nine of the 17 commissioners voted to raise the county share of the sales tax to 1.75 percent. Add up the state, city and public transit portions, and the total sales tax rate in Chicago once again will hit 10.25 percent — one of the highest rates in the nation

Preckwinkle first rose to power in 2010 on a campaign pledge of repealing what remained of an identical sales tax increase under predecessor Todd Stroger…

(Editor’s note: Bold added for emphasis)

Opponents of the sales tax hike claim the County didn’t perform enough belt-tightening before approving the measure. County Commissioner Bridget Gainer (10th District) penned on the Tribune website on July 1:

Don’t get me wrong, the county has a serious budget and pension cost gap, predicted to be $479 million. The proposed 1 percentage point increase in the sales tax would raise some $474 million annually.

But $130 million of the deficit goes away with pension reform. An additional $50 million in savings has already been identified by the budget staff. Yet another $50 million is in reach if we are finally willing to consolidate our redundant taxing bodies and duplicative services…

(Editor’s note: Bold added for emphasis)

Back on December 5, 2013, I pointed out Illinois has the most units of local government of any state in the country at 6,963 local governments (U.S. Census Bureau).

It’s been reported Cook County is home to 1,300 of these taxing agencies alone.

The sales tax hike goes into effect starting January 1, 2016.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Dardick, Hal. “Cook County Board votes to raise sales tax.” Chicago Tribune. 15 July 2015. (http://www.chicagotribune.com/news/local/politics/ct-cook-county-sales-tax-increase-met-0716-20150715-story.html#page=1). 16 July 2015.

Gainer, Bridget. “Commentary: Cook County Commissioner Bridget Gainer: I won’t vote for a sales tax hike.” Chicago Tribune. 1 July 2015. (http://www.chicagotribune.com/news/opinion/commentary/ct-cook-county-tax-preckwinkle-gainer-perspec-0702-jm-20150701-story.html). 16 July 2015.

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Latest On Chicago’s ‘Routine Military Training Exercise’ Over The Next Week

This Monday, I blogged about Chicago hosting a “routine military training exercise” over the next two weeks.

Here’s the latest on the event, per the City of Chicago Office of Emergency Management and Communications website earlier today:

The City of Chicago is providing continued support for a routine military training exercise in and around the Chicagoland area over the next week. This routine training is conducted by military personnel in cities across the country, designed to ensure the military’s ability to operate in urban environments overseas, as service members meet mandatory training certification requirements and prepare for upcoming deployments worldwide.

As part of this training, residents can expect to see increased aircraft activity, including helicopter flights. All training activities have been pre-coordinated with federal, state and city officials, and these locations have been carefully selected to minimize the impact on the daily routine of residents.

The training is not open to the public and the sites will be secured to ensure the safety of residents and the participants.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Thursday, July 16th, 2015 Government, Military, Training No Comments

The Green Suite Of Chicago Offering Window Farming For Beginners, DIY Solar Electricity Classes In Late July

The Green Suite of Chicago (first blogged about here in January 2014) will be offering instruction in “window farming” and solar electricity in the coming weeks. From the Facebook page of Nick Conrad and the school on July 9:

So happy to be teaming up with The Shift for our July classes! I will be teaching both my Hydroponics for Beginners (July 21st) and DIY Solar Electricity (July 28th). We still have a few spots left in both classes. Get them before they’re gone!

Per the The Shift’s website for the hydroponics class:

Window Farming for Beginners

$20 Purchase required to enroll

Tuesday, July 21
6pm – 8pm
Led by Nick Conrad

Have you always wanted to start a garden but don’t have the space or knowledge? Window farming is an inexpensive and easy way to grow your own food right in your window! Constructed from recycled materials, window farms are perfect for small apartments with limited space.

The class consists of a 1 hour introduction to the basics of hydroponics, window farming, and seed cultivation followed by a 30 minute workshop in which you will make a small hydroponic planter to take home with you!

Anyone can learn how to grow fresh, organic food, hydroponically. Enroll today and you’ll learn how to grow your own food, save money and turn trash into treasure!

Each student should bring one empty plastic bottle (12-32oz is best).

Regarding that solar electricity class:

DIY Solar Electricity

$20 Purchase required to enroll

Tuesday, July 28
6pm – 8pm
Led by Nick Conrad

Wouldn’t it be awesome to harness your own electricity from the sun? Solar energy is green, silent and a lot easier to build than you think.

This DIY class will cover the basics of electricity as well as how to design, build, and install your own solar panel system. In addition to solar electricity, we will discuss other sources of renewable energy such as wind and geothermal power. The class concludes with hands-on experience assembling part of an actual solar panel.

You will walk away from this course with the basic knowledge needed to start generating your own solar energy at home…and for a lot less money than you thought!

For more information about the instruction and how to enroll, head over to The Shift’s website here under “Events.” And to learn more about The Green Suite, visit their site here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: Posting of information about any third-party instruction is not to be construed as being a recommendation from Survival And Prosperity and its editor, unless specifically indicated. I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Chicago Hosting ‘Routine Military Training Exercise’ Over Next 2 Weeks

As posted on the City of Chicago Office of Emergency Management and Communications website before the weekend:

The City of Chicago is providing support for a routine military training exercise in and around the Chicagoland area over the next two weeks. This routine training is conducted by military personnel in cities across the country, designed to ensure the military’s ability to operate in urban environments overseas, as service members meet mandatory training certification requirements and prepare for upcoming deployments worldwide.

All training activities have been pre-coordinated with federal, state and city officials, and these locations have been carefully selected to minimize the impact on the daily routine of residents.

The training is not open to the public and the sites will be secured to ensure the safety of residents and the participants.”

The Chicago area is no stranger to these “routine military training exercises.” I’ve blogged about such events in 2012 (April) and twice in 2013 (April and July).


“Military helicopters flying low over Chicago River”
YouTube Video

I wrote back on April 16, 2012:

Now, I’ve heard the U.S. military has been busy developing its urban warfare training program for some time already. Spencer Ackerman wrote in the Wired.com blog Danger Room back on January 18, 2011:

American soldiers spent seven years patrolling the urban neighborhoods of Iraq; its troops battled insurgents there block-by-block and house-by-house. Now that the Army is getting out of Iraq, it wants to make sure its urban combat skills don’t wither away. So it today it gave Lockheed Martin a contract worth up to $287 million to build Urban Operations Training Systems — essentially, giant simulation facilities and modules to help soldiers get ready for life in the big, bad city.

Versions of those training systems can be as simple as shipping containers tricked out to resemble multi-story houses and arranged in village formations, so soldiers can practice how to seize a building without causing needless damage. The Army’s got an entire 1000-acre facility in Indiana it uses to train soldiers in urban combat.

As for the Marines? From the CBS Channel 2 (Los Angeles) website on January 25, 2011:

A 1,560-building mock city has risen in the Southern California desert.

The $170 million Marine Corps urban training center at the Twentynine Palms military base, some 130 miles northeast of Los Angeles, is roughly the size of San Diego.

The Marine Corps Air Ground Combat Center facility uses mock cities and role players to prepare Marines and sailors for urban terrain missions.

If our armed forces already have such resources, what’s with the urban warfare training in American cities then?

The question still stands today…

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Monday, July 13th, 2015 Government, Military, Training, War No Comments

C.U.M.A. Survival School Offering Civil Unrest/Bug Out/Summer Weather Survival Training In Glenview, Illinois, On July 25

Just like the Chicago School Of Wilderness Skills, here’s another local organization I’d like to obtain instruction from down the road. From the Facebook page of Waysun Johnny Tsai and the C.U.M.A. Survival School (first blogged about in April 2014) this Sunday morning:

We are proud to announce DayOne Gear and Vulture Equipment Works as Sponsors for our ONE DAY Urban Survival/Bug Out/Wilderness class on Saturday, July 25th, 2015.

All class participants will receive a goodie bag which includes a DayOne Gear Survival Tin and Live Fire 550 Fire Cord (MSRP $50+ per bag) plus other essential gear that can be used in class.

DayOne Gear is donating a total of 30 survival gift bags, so space is limited to 30 students.

Vulture Equipment Works will be donating one of their TALON knives (MSRP $189) that will used in class and then raffled off afterwards.

It should be known that the NBC News Crew will be there filming the class for a special segment on Survival. However, all students can opt out of being filmed. This will be a Nationally broadcasted segment.

Class will be held at Off The X Training Concepts in Glenview, Illinois and go from 10:00AM-5:00PM.

NEXT C.U.M.A. SURVIVAL SCHOOL Civil Unrest/ Bug Out/ Summer Weather Survival.

This class will cover:
Home Prep
Home Defense
The importance of firearms training (presented by Off The X Training Concepts)
The Bug In
The Bug Out Vehicle
The Bug Out
Basic Wilderness Survival Skills
C.U.M.A. COMBATIVES Street Defense

WHEN: Saturday, July 25th, 2015

TIME: 10:00AM CST-5:00PM

Location: Off The X Training Concepts, 4350 Dipaolo Center, lower level, Glenview, Illinois 60025

COST: $150.00 (New Students /$75.00 C.U.M.A. SURVIVAL Alumni)

For more information about the class, head on over to C.U.M.A.’s Facebook page here. And for more comprehensive information about the school, visit their website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: Posting of information about any third-party instruction is not to be construed as being a recommendation from Survival And Prosperity and its editor, unless specifically indicated. I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Illinois State Rifle Association Blasts Gun ‘Control’ Supporters In Crain’s Opinion Piece

“A group of civil rights activists on Tuesday filed a lawsuit against three Chicago suburbs to force them to take stricter gun-control measures to stem the flow of weapons into the city’s crime-ridden neighborhoods…”

-Reuters, July 7, 2015

I just got finished reading an opinion piece this morning on the Crain’s Chicago Business website that was written by Richard Pearson, executive director of the Illinois State Rifle Association. Pearson and the ISRA threw down the gauntlet at gun “control” supporters in Chicago and elsewhere in the state who keep pushing for more restrictive laws, despite the fact that criminals- as the term suggests- don’t follow such laws when they need to get their hands on a firearm. Instead, law-abiding Illinoisans and their ability to effectively defend themselves against the bad guys are impacted. Pearson suggested gun “control” advocates turn their focus to “crime control” instead.

A sensible recommendation, especially when you consider Chicago was recently ranked dead last in federal prosecution of gun crimes and it’s routinely-reported in the local news these days that yet another criminal found guilty of a firearm-related crime went on to commit more of the same.

Pearson wrote:

Like all people of good conscience, Illinois’ lawful firearm owners abhor the violence taking place in our communities. After all, we and our families live here too. That being said, we are not going to accept the role of scapegoat for failed social policies. We will not accept a brand of politics that prefers to heap rules on people who follow rules rather than holding those who do not follow the rules accountable. We never will agree that gun control is an acceptable substitute for crime control…

It’s a good read, which you can view in its entirety over on the Crain’s website here.

For more information about the Illinois State Rifle Association, you can visit their website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Chicago School Of Wilderness Skills Offering Fire By Friction Class On July 11

I understand there’s still a couple of spots open for tomorrow’s “Fire by Friction 201” class offered by the Chicago School Of Wilderness Skills (first blogged about here). From the organization’s “Calendar Of Events” page:

Fire by Friction 201
Saturday, July 11, 2015
1:00pm- 4:00pm

This is a must have skill for anyone seeking to be self-reliant. This course will teach you not only how to build a fire that will start in just about any weather but how to do it using nothing more than a few pieces of wood and some string. By the end of this course you will understand how to properly prep a fire, making a tinder birds nest and most importantly how to spin out an ember and blow it into a raging fire.

Skills to be covered:

The bow drill kit fundamentals
Collecting fire material
Forming a birds nest
Prepping the fire
Using the kit to spin an ember
Blowing an ember into a flame

$30 per person

I haven’t taken any classes from the Chicago School Of Wilderness Skills, but I sure hope to one day as soon as my schedule frees up.

For more information and/or to sign up for the above instruction, head on over to the school’s website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: Posting of information about any third-party instruction is not to be construed as being a recommendation from Survival And Prosperity and its editor, unless specifically indicated. I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Friday, July 10th, 2015 Fire, Preparedness, Training No Comments

S&P Cuts Chicago’s Credit Rating Twice In Less Than 2 Months

Surprise, surprise. The City of Chicago’s credit rating was lowered yet again.

This time, it’s Standard & Poor’s that did the cutting.

Karen Pierog and Tanvi Mehta reported on the Reuters website last night:

Standard & Poor’s Ratings Services cut Chicago’s credit rating one notch to BBB-plus with a negative outlook on Wednesday, citing the windy city’s nagging structural budget deficit and the lack of a plan to close it.

S&P analyst John Kenward said the U.S.’ third-largest city needs “a credible, public, detailed plan” to deal with budget gaps projected to grow to $588 million in fiscal 2017, largely due to escalating contributions to its police and fire fighter retirement funds.

S&P also warned Chicago’s general obligation bond rating may fall further if a credible plan does not surface within six months…

(Editor’s note: Bold added for emphasis)

According to the S&P website, “BBB” indicates:

Adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

It was less than two months ago that Standard & Poor’s last downgraded the City of Chicago’s credit rating. I blogged on May 17:

Standard & Poor’s joined in on the downgrade parade later in the week. From a press release Friday:

Chicago, IL GO Bond Ratings Lowered To #A-# From #A+#, Placed On CreditWatch Due To Short-Term Liquidity Pressure
CHICAGO–15 May–Standard & Poor’s

CHICAGO (Standard & Poor’s) May 14, 2015–Standard & Poor’s Ratings Services lowered its rating to ‘A-‘ from ‘A+’ on the city of Chicago’s outstanding general obligation (GO) bonds, and placed the ratings on CreditWatch with negative implications…

Stay tuned…

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Mehta, Tanvi and Pierog, Karen. “UPDATE 1-S&P downgrades Chicago’s GO bond rating to BBB-plus.” Reuters. 8 July 2015. (http://www.reuters.com/article/2015/07/08/usa-chicago-sp-idUSL3N0ZO60H20150708). 9 July 2015.

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64 Shot, 10 Killed In Chicago Over Fourth Of July Weekend

It was another violent Independence Day weekend in the city of Chicago. Peter Nickeas reported on the Chicago Tribune website this morning:

Shootings over the long Fourth of July weekend left 10 people dead and 54 others wounded.

Among those killed was a 7-year-old boy shot in the chest during an attack aimed at his father, according to police…

(Editor’s note: Bold added for emphasis)

The Chicago Sun-Times added this morning on their website:

Police said Sunday the bullet that fatally wounded 7-year-old Amari Brown on the Fourth of July was meant for his father…

The boy’s father, Antonio Brown, is a ranking gang member with 45 previous arrests and was not cooperating with police as of Sunday afternoon as they tried to find his son’s killer, Chicago Police Supt. Garry McCarthy said Sunday, the Chicago Sun-Times reported…

According to a Chicago Crime Commission publication from 2012, there are an estimated 70 to 100 gangs in the Chicago metropolitan area with a membership of between 68,000 to over 150,000.

Nickeas added later on his piece:

Shootings last year, over an 84-hour period, left 82 people shot, 16 fatally…

While some may try to tout this “improvement” from 2014, this year’s carnage is still staggering, particularly as Chicago has strict gun “control” laws on its books.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Nickeas, Peter. “10 killed, 54 wounded in gun violence over Fourth of July weekend in Chicago.” Chicago Tribune. 6 July 2015. (http://www.chicagotribune.com/news/local/breaking/ct-chicago-violence-20150706-story.html). 6 July 2015.

“Nine dead, 53 injured in Fourth of July weekend shootings.” Chicago Sun-Times. 6 July 2015. (http://chicago.suntimes.com/crime/7/71/742607/police-3-dead-3-wounded-holiday-weekend-shootings-since-thursday-evening). 6 July 2015.

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Chicago Board Of Education Could Borrow More Than $1 Billion With $600 Million-Plus Pension Payment Due Next Week

I fear Chicago’s celebratory mood post-Stanley Cup could be fast disappearing as the city’s financial reckoning day rapidly approaches. Juan Perez, Jr., reported on the Chicago Tribune website tonight:

The Chicago Board of Education on Wednesday approved plans to borrow more than $1 billion in an effort to manage an immediate cash crunch and get through the coming budget year.

The borrowing is on top of an existing line of credit of up to $500 million. The initial $200 million in borrowing authorized Wednesday could help the district cover its bills through the end of June, but the district would be short of cash to cover payments shortly after that, according to documents obtained by the Tribune.

A separate line of credit of up to $935 million would take the district through the coming budget year. The loans will be secured with the promise of future property tax revenue.

The board’s unanimous 5-0 vote in favor additional borrowing came one day after the Illinois House fell 18 votes short of approving a three-week extension on a $600 million-plus pension payment due next week

(Editor’s note: Bold added for emphasis)

Democrats have a supermajority in both chambers of the Illinois General Assembly, and “Machine”-controlled Chicago still couldn’t get that pension payment deadline extended.

Oh well. Long-time Survival And Prosperity readers shouldn’t be the least bit surprised about the latest bad news concerning Chicago’s public schools. I blogged way back on September 13, 2012:

By now, many of you have probably heard about the teachers strike going on in Chicago. Day 4 and counting. While many Chicago public school teachers are probably worth every red cent of the $71,017 median salary they command- and more- when all things are considered, considering the precarious financial situation of the Chicago Public Schools, a larger crisis looks to be right around the corner.

Looks like we’re almost there.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Perez, Juan. “Chicago school board approves more than $1 billion in new borrowing.” Chicago Tribune. 24 June 2015. (http://www.chicagotribune.com/news/local/breaking/ct-school-board-meets-met-0625-20150624-story.html). 24 June 2015.

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Cook County Sales Tax Hike Coming?

Cook County, Illinois, could soon have one of the highest sales tax rates in the country (again). The Chicago Tribune Editorial Board wrote on the paper’s website this evening:

Cook County Board President Toni Preckwinkle is weighing the idea of imposing a penny-on-the-dollar increase in the local sales tax to balance the county’s books…

Preckwinkle is lobbying Cook County Board members to raise the county’s portion of the sales tax by 1 percentage point, which would push Chicago’s tax rate to 10.25 percent, among the highest in the nation

(Editor’s note: Bold added for emphasis)

This should come as no surprise to regular readers of Survival And Prosperity. I blogged back on April 10 of last year:

For a while now (last time being earlier this week), I told my girlfriend we were lucky to have escaped the fiscal debacle and revenue grab going on in the city of Chicago.At the same time, I pointed out that as Cook County residents we’re still on the hook for the same type of nonsense.

Brian Slodysko reported on the Chicago Sun-Times website yesterday afternoon:

Hoping to ward off another credit rating downgrade, Cook County Board President Toni Preckwinkle said Wednesday that she will soon present a plan to reform the county’s underfunded pension system.

And she’s leaving the door open to hiking property, sales and other taxes.

When asked repeatedly about the possibility of tax increases, Preckwinkle responded: “We’re looking at all the options. Everything is on the table.”

(Editor’s note: Bold added for emphasis)

According to the local press, it’s the sales tax hike Preckwinkle’s now pushing.

And considering Cook County’s fiscal challenges, it shouldn’t surprise blog readers to hear of hikes on “property… and other taxes” down the road.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Editorial Board. “Editorial: Watch out for the Toni Tax.” Chicago Tribune. 23 June 2015. (http://www.chicagotribune.com/news/opinion/editorials/ct-edit-tonitax-0624-20150623-story.html). 23 June 2015.

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Chicago Tribune: ‘Chicagoans Should Consider A Modest Property Tax Increase Inevitable’

Coming on the heels of last Thursday’s post and an earlier one about Chicago-area property/other taxes was an article by Chicago Tribune business columnist Melissa Harris entitled “Chicago isn’t Detroit- and it’s not going bankrupt.”

In the June 20 piece, Harris attempted to argue exactly what the title says (critics are panning it as “Machine”/union propaganda). But what interested me were statements like this:

More revenue will be required soon, most likely in the form of a property tax increase.

Not only is Chicago’s property tax rate lower than those in many suburbs, Chicago’s effective property tax rate ranked 49th out of the 50 largest cities in each state, according to 2009 U.S. Census data…

(Editor’s note: Bold added for emphasis)

And this:

Chicagoans should consider a modest property tax increase inevitable, though how much of an increase it will be could be affected by Moody’s decision, which made it more expensive for Chicago to borrow money…

(Editor’s note: Bold added for emphasis)

If one believes claims the Chicago news media routinely carries Mayor Rahm Emanuel’s water, increased tax hike chatter and growing comparisons of the city to other municipalities by the local press could be sending a strong signal to Chicagoans that they’ll be required to bust out their wallets shortly.

You can read the rest of that column on the Chicago Tribune website here (registration required)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Property Tax Blues For Chicago, North Suburban Homeowners

While Chicagoland was preoccupied with the Blackhawks’ Stanley Cup victory parade Thursday, the Cook County Clerk’s office released the following:

Cook County Clerk David Orr released the 2014 property tax rates for the county’s more than 1,400 taxing agencies on Thursday, the final step in the tax process before bills are mailed out. The average homeowner in the city of Chicago and the northern suburbs will see their tax bill increase slightly, while the average homeowner in the southern suburbs will see a slight reduction in their tax bill.

In the south suburbs residential tax bills will on average be 1.0 percent lower. In north suburbs there will be an average increase of 2.4 percent, and most Chicago homeowners can expect an increase in their bill of 2.8 percent.

For the average single family home, this will translate to a decrease of $51.33 for south suburban homeowners, an increase of $155.49 for north suburban homeowners, and a property tax bill that is $89.44 higher than last year’s for Chicago homeowners…

(Editor’s note: Bold added for emphasis)

By the way, that $89 plus change property tax increase is based on an “average home with market value of $199,000″ in Chicago. Good luck finding a decent-sized family home that cheap in my old neighborhood on the northwest side of the city.

That being said, even a low three figure dollar increase in property taxes would likely be welcomed around my old stomping grounds compared to what could be coming down the line. John Byrne reported on the Chicago Tribune website this afternoon:

The threat of much steeper property tax hikes looms in Chicago. Mayor Rahm Emanuel is trying to find enough money to make police and fire pension payments set to balloon next year, and CPS faces a $1 billion budget hole driven by pension shortfalls of its own…

(Editor’s note: Bold added for emphasis)

You can read the entire press release on the Cook County Clerk’s website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Byrne, John. “Chicago property taxes to rise $90 on average.” Chicago Tribune. 18 June 2015. (http://www.chicagotribune.com/news/local/politics/ct-cook-county-property-tax-rates-met-0619-20150618-story.html). 18 June 2015.

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Thursday, June 18th, 2015 Education, Entitlements, Government, Housing, Taxes No Comments

Moody’s Downgrades Cook County’s Credit Rating, Issues Negative Outlook

The following is kind of stale, but the local press didn’t really publicize it and Cook County residents are entitled to know the financial health of the local government unit in these uncertain times. The Global Credit Research division of Moody’s announced on their website back on June 5:

Rating Action: Moody’s downgrades Cook County, IL’s GO to A2 from A1; outlook negative

A2 rating applies to $3.6B of GO debt

New York, June 05, 2015 — Moody’s Investors Service has downgraded to A2 from A1 the rating on Cook County, IL’s general obligation (GO) debt. The county has $3.6 billion in GO debt outstanding. The outlook remains negative…

The Global Credit Research division explained:

The A2 rating incorporates credit pressures associated with Cook County’s unfunded pension liabilities. Based on the Illinois Supreme Court’s May 8 overruling of the State of Illinois’ (A3 negative) pension reforms, we perceive increased risk that the county’s options for reducing unfunded pension liabilities have narrowed considerably. As it currently stands, Cook County-despite its home rule status-has little direct control over its single largest liability. Whether or not the statute that governs Cook County’s pension plan stands, we expect pension-related costs will place increasing strain on the county’s financial operations. Furthermore, approximately half of Cook County’s tax base is highly leveraged by the debt and unfunded pension liabilities of the City of Chicago (Ba1 negative) and the Chicago Public Schools (CPS) (Ba3 negative). We believe that the revenue demands of these entities could place practical limitations on the county’s ability and willingness to increase revenue to fund its pension costs. Other credit challenges for the county include enterprise risks inherent in operating the Cook County Health and Hospitals System (CCHHS)…

As for that negative outlook:

The negative outlook reflects our view that Cook County’s credit quality could weaken given continued uncertainty in the county’s future pension funding framework. Our outlook on the county’s credit is also informed by our expectation of growth in the pension costs of the local governments that share half of the county’s tax base. Finally, the negative outlook incorporates continued pressures in the health care sector, improved financial results for CCHHS notwithstanding…

On June 8, the major U.S. credit rating agency also announced a downgrade of the Cook County Forest Preserve District’s general obligation debt to A2 from A1, with a negative outlook as well.

You can read that entire June 5 Moody’s rating action on their website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Wednesday, June 17th, 2015 Credit, Debt Crisis, Entitlements, Government No Comments

Chicago, The Taxman Cometh

“Amid comparisons to ‘shuffling the deck chairs’ on the Titanic, the City Council’s Finance Committee agreed Monday to add another $1.1 billion to the mountain of debt piled on Chicago taxpayers…”

Chicago Sun-Times website, June 15, 2015

While Chicagoans celebrate the Stanley Cup, City Hall is mulling over which taxes of theirs to hike. Derrick Blakley reported on the CBS 2 (Chicago) website before the weekend:

With a huge budget deficit ahead, Chicago city government is desperately searching for new income.

Now, Mayor Rahm Emanuel may be seriously considering an income tax

Emanuel isn’t specifically talking income tax yet. But one of his strongest city council allies, 49th Ward Ald. Joe Moore, is speaking up.

“In my ideal scenario, it would be a graduated income tax that would be pegged at peoples’ ability to pay,” he says.
Some of the biggest U.S. cities already tax wages, including New York, Philadelphia, Detroit, Cleveland, San Francisco and Denver.

The tax that would also strike suburbanites who work in the city, Moore says.

The concept drew support Thursday from other mayoral allies who want to avoid a property tax hike…

Last year, the mayor rejected a city income tax. Not Thursday…

(Editor’s note: Bold added for emphasis)

The Chicago Sun-Times Editorial Board also picked up on Mayor Emanuel’s silence on the city income tax issue, writing Friday on the paper’s web site:

In a major break from the past, Mayor Rahm Emanuel did not immediately shoot it down…

(Editor’s note: Bold added for emphasis)

The Board added:

Might a Chicago income tax have bad, unintended consequences? Of course. And we’re by no means endorsing the idea here. But so might all the other taxes Chicago needs to consider: a commuter tax, a modest financial transaction, the broadening of the sale tax to cover more services, closing some tax-increment financing districts, congestion pricing and a pay-as-you-go garbage fee, to name some of the biggies.

Each revenue-generator should be vetted and priced out publicly, and the results should be explained far and wide so that the City Council and every Chicagoan come to accept two realities. One is the sheer size of Chicago’s financial crisis. The second is that no single solution will cut it. The pain has to be spread as widely as possible. The question then becomes: Which ingredients, in what proportions, make for the best stew — or at least the one that goes down easiest?

We have long said that raising property taxes — the city’s most stable revenue source, and one of the few it controls directly — is inevitable. But if property taxes are raised too much, both for Chicago and the school system, the city we know and love will cease to exist. An already dwindling middle class will flee.

A property tax hike should only be part of that bigger stew…

(Editor’s note: Bold added for emphasis)

Testing the waters? Conditioning Chicagoans for inevitable tax hikes?

All I know is this. Higher fees/fines/taxes. Reduced government benefits/services. That’s what I see coming down the pipeline for not only Chicago but the rest of the nation in due time.

Prepare accordingly.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Blakley, Derrick. “Chicago Eyes A City Income Tax On Residents, Suburbanites Who Work Here” CBS 2. 11 June 2015. (http://chicago.cbslocal.com/2015/06/11/chicago-eyes-a-city-income-tax-on-residents-suburbanites-who-work-here/). 16 June 2015.

Editorial Board. “Editorial: Mixing up a stew of Chicago revenue solutions.” Chicago Sun-Times. 12 June 2015. (http://chicago.suntimes.com/opinion/7/71/685251/editorial-16). 16 June 2015.

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Tuesday, June 16th, 2015 Debt Crisis, Fiscal Policy, Government, Taxes No Comments


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