Rahm Emanuel

Chicago Public Pension Crisis Latest

Last Tuesday, I blogged about Chicago Mayor Rahm Emanuel’s attempt to address some of the City’s public pension woes via larger contributions by City employees and $50 million tax increases for five straight years- beginning next year and continuing through 2019- for Chicago property owners.

There’s been a lot of chatter regarding this proposal and other pension “reform” activity today. Karen Pierog reported on the Reuters website:

Legislation to ease funding shortfalls in two of Chicago’s four retirement systems is a modestly positive credit step but not a permanent fix, Moody’s Investors Service said on Monday

Moody’s said that if enacted into law, the measure would immediately reduce the unfunded liabilities in the two funds.

“However, we expect that the (liability) would then escalate for a number of years before declining. Accrued liabilities would exceed plan assets for years to come, and if annual investment returns fall short of the assumed 7.5 percent, the risk of plan insolvency may well reappear,” the credit rating agency said in a report…

After breezing through an Illinois House committee on April 2, the bill has stalled. Moody’s said that even if the bill makes it out of the legislature, Governor Pat Quinn must sign it. The law would then face potential challenges to its legality under the Illinois constitution, which prohibits the impairment of retirement benefits for public sector workers…

(Editor’s note: Bold added for emphasis)

So will the Illinois Governor and fellow Chicago Democrat sign off on Mayor Emanuel’s proposed legislation?

John Byrne and Monique Garcia reported on the Chicago Tribune website this afternoon:

Gov. Pat Quinn today came out against Mayor Rahm Emanuel’s plan to raise Chicago property taxes and cut retirement benefits as a way to shore up some of Chicago’s government worker pension systems.

The re-election seeking Democratic governor called the bill floating around Springfield “a sketch” that “kept changing by the hour” and blasted the property tax as a “lousy tax” because it is not based on the ability to pay…

“I don’t think that’s a good way to go,” Quinn said of hiking property taxes. “And I say it today and I’ll say it tomorrow, they’ve got to come up with a much better comprehensive approach to deal with this issue. But if they just think they are going to gouge property tax owners, no can do. We’re not going to go that way.”

(Editor’s note: Bold added for emphasis)

Now, as I pointed out in last week’s post about Chicago’s public pension crisis:

There’s still a state-required $600 million contribution due next year from the City to stabilize police and fire pension funds that this proposed property tax hike doesn’t address and has to be dealt with…

(Editor’s note: Bold added for emphasis)

Plus, I read the following this morning by Chacour Koop on the website of The State Journal-Register (Springfield):

After addressing Illinois’ own employee pension crisis, lawmakers now face an equally challenging task with the state’s cities, as mayors demand help with underfunded police and firefighter pensions before the growing cost “chokes” budgets and forces local tax increases.

The nine largest cities in Illinois after Chicago have a combined $1.5 billion in unfunded debt to public safety workers’ pension systems. Police and fire retirement funds for cities statewide have an average of just 55 percent of the money needed to meet current obligations to workers and retirees…

The problems — a history of underfunding, the expansion of job benefits and the prospect of crushing future payments — mirror those that Chicago Mayor Rahm Emanuel warned about when he asked the legislature for relief last week.

In 2016, state law requires cities to make required contribution increases — in some cases, more than an additional $1 million annually — so they’ll reach 90 percent funding by 2040. If they don’t, the state will begin doing it for them, diverting grant money now used by cities elsewhere directly into the pension funds…

(Editor’s note: Bold added for emphasis)

Just like the Illinois General Assembly- dominated by Democrats- barely passed legislation on December 3, 2013, that was touted as a “fix” for the state’s $100 billion public pension crisis (it isn’t), something tells me an accommodation may be reached with fellow Democrats running the City of Chicago so they don’t have to pay the full amount of the state-required $600 million contribution due next year to stabilize police and fire pension funds.

That goes for those large Illinois communities as well.

Watch all the back-patting go on should that “fix” materialize as well.

And the inevitable “blowback” down the road.

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

UPDATE: From Fran Spielman over on the Chicago Sun-Times website early Tuesday morning:

Mayor Rahm Emanuel and House Speaker Michael Madigan Monday stripped out controversial language from city pension legislation that had authorized the City Council to impose a property-tax hike, putting the stalled measure back on the fast-track at the state Capitol.

Madigan, D-Chicago, filed an amendment to Senate Bill 1922 after the House adjourned Monday without taking any action on the stalled legislation. Sources now expect the legislation to be voted upon as early as Tuesday.

(Editor’s note: Bold added for emphasis)

Sources:

Pierog, Karen. “UPDATE 1-Proposed Chicago pension changes positive step but no fix -Moody’s.” Reuters. 7 Apr. 2014. (http://www.reuters.com/article/2014/04/07/usa-chicago-moodys-idUSL2N0MZ1AP20140407). 7 Apr. 2014.

Byrne, John and Garcia, Monique. “Quinn blasts Emanuel’s property tax hike for pensions.” Chicago Tribune. 7 Apr. 2014. (http://www.chicagotribune.com/news/politics/clout/chi-quinn-blasts-emanuels-property-tax-hike-for-pensions-20140407,0,5432729.story). 7 Apr. 2014.

Koop, Chacour. “Illinois’ next pension issue: Police, firefighter funds.” Associated Press. 6 Apr. 2014. (http://www.sj-r.com/article/20140406/NEWS/140409562/-1/json/?tag=1). 7 Apr. 2014.

Spielman, Fran. “Analysis: Rahm’s pension bill revisions solve—and create—problems.” Chicago Sun-Times. 8 Apr. 2014. (http://politics.suntimes.com/article/chicago/analysis-rahm%E2%80%99s-pension-bill-revisions-solve%E2%80%94and-create%E2%80%94problems/mon-04072014-728pm). 8 Apr. 2014.

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Chicago Wakes To Proposed Property Tax Hike On April Fool’s Day

Many Chicagoans probably wish what’s being widely-reported in the local news this morning about a proposed property tax hike is just a silly April Fool’s joke.

It’s not.

Fran Spielman wrote on the Chicago Sun-Times website last night:

Chicago property owners will face $250 million in property tax increases over five years while city employees make increased pension contributions that will cost them at least $300 more a year, under landmark reforms unveiled Monday…

The new revenue the mayor had promised only after pension reform will come in the form of $50 million property tax increases for five straight years, beginning next year and continuing through 2019.

Top mayoral aides estimate that would cost the owner of a home valued at $250,000 with an annual property tax bill of $4,000 roughly $58 more or $290 over the five-year period. That’s on top of expected increases for the Chicago Board of Education and Chicago Park District…

(Editor’s note: Bold added for emphasis)

A couple of thoughts here:

First off, is anyone really surprised this is happening?

Regular readers of this blog shouldn’t be.

Higher fees, fines, and taxes. Less government services.

I’ve been squawking this for quite some time now.


“Black Dynamite- Who saw that coming?”
YouTube Video

Second, a $250,000 home? When discussing a Chicago Board of Education property tax hike last August, I blogged:

$230,000? You’d be hard-pressed to find a home for that little money in my former stomping grounds on the Northwest Side.

The same holds true for a $250,000 one (especially if it’s a property big enough for a family and doesn’t require a ton of work).

Which means many of my old neighbors will be coughing up significantly more than just $58 annually/$290 over five years as a result of this proposed hike.

And they already pay a big chunk of change to the City’s coffers.

Third, Spielman added last night:

The bottom line, according to Emanuel, is a plan that spreads the burden between employees, retirees and homeowners without raising property taxes so high that it triggers a mass exodus to the suburbs…

“Mass” being the key word here, because an exodus has already started. Former Chicago residents who have awakened to the “writing on the wall” are moving to the suburbs (yours truly included), leaving Cook County, and departing the state.

The push to make “temporary” personal and corporate income tax hikes permanent and the pursuit of class warfare in the form of a proposed millionaire tax hike by the ruling political party in the city, county, and state certainly don’t help the situation either.

Fourth, I can’t stand when tax hikes are proposed despite the lack of significant belt-tightening. Think the City of Chicago is as lean-and-mean as it possibly can be with its operations and set-up?

As long as 50 aldermanic wards exist, I’d argue no.

Fifth, as it stands right now, there’s still a state-required $600 million contribution due next year from the City to stabilize police and fire pension funds that this proposed property tax hike doesn’t address and has to be dealt with. Hal Dardick an Bill Ruthhart reported on the Chicago Tribune website this morning:

But the proposal the mayor and his top aides outlined late Monday would not address huge pension shortfalls for Chicago police, firefighters and teachers. Nor would it deal with the city’s most immediate, pressing financial problem: a state requirement to pay a whopping $600 million more toward police and fire pensions next year, a provision that could lead to a combination of tax increases, service cuts and borrowing

(Editor’s note: Bold added for emphasis)

You read right. Possibly more “tax increases, service cuts and borrowing” coming down the line shortly for Chicago residents.

Stay tuned…

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

Sources:

Spielman, Fran. “Pension deal pinches city workers and taxpayers.” Chicago Sun-Times. 31 Mar. 2014. (http://politics.suntimes.com/article/chicago/exclusive-pension-deal-pinches-city-workers-and-taxpayers/mon-03312014-821pm). 1 Apr. 2014.

Dardick, Hal and Ruthhart, Bill. “Emanuel’s pension fix: Shrink benefits, raise taxes.” Chicago Tribune. 1 Apr. 2014. (http://www.chicagotribune.com/news/local/ct-rahm-emanuel-pension-property-tax-increase-met–20140401,0,1662095,full.story). 1 Apr. 2014.

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Chicago, The Writing Is On The Wall

The city of Chicago is in for some tough times down the road.

“The Machine” keeps putting a positive spin on the city’s deteriorating financial condition, but the numbers don’t lie. I’ve rattled them off time and time again, the most recent being Tuesday. The Chicago press (sans Fran Spielman over at the Chicago Sun-Times and a few others) has even caught on, publishing articles with more frequency these days that reveal just how ugly the city’s finances truly are. Case in point, a Chicago Tribune editorial entitled “Chicago is on the road to Detroit” that appeared on their website yesterday. From the piece:

By the most recent numbers, Mayor Rahm Emanuel’s government owes $13.9 billion in general obligation bond debt, plus $19.5 billion in unfunded pension obligations. Add in Chicago Public Schools and City Hall’s other “sister agencies” and you’re talking billions more in debts that Chicago taxpayers owe. Yet here we are on a Wednesday when the mayor probably will get approval from a derelict City Council to issue another up-to-$900 million in bonds backed by property taxes — and to double, to $1 billion, the amount of short-term bank money his administration can borrow to raise cash…

(Editor’s note: Italics added for emphasis)

By the way, Mayor Emanuel got that approval. Fran Spielman reported on the Chicago Sun-Times website Wednesday morning:

Without a word of debate, the City Council on Wednesday blindly added $1.9 billion to Chicago’s mountain of debt even though aldermen have no idea how the money will be spent.

The vote was 43-to-4. “No” votes were cast by Aldermen Bob Fioretti (2nd), Scott Waguespack (32nd), Brendan Reilly (42nd) and John Arena (45th)…

Now, I’ve heard/read some Chicagoans say something along the lines of don’t worry about the city’s finances, Governor Quinn and the State of Illinois or President Barack Obama and the federal government will ride to the rescue of their fellow Democrats in control of the “Windy City.”

To which I say, I’m not so sure. Is there anyone in America who doesn’t know how much of an economic basket case the “Land of Lincoln” is? A $100.5 billion public pension debt and the worst credit rating of all 50 U.S. states routinely make headlines across the country. As for the federal government, I keep encountering the words “insolvent” and “bankrupt” more and more these days to describe the nation’s finances. And don’t think for a second other economically-challenged cities across the country won’t cry foul to the Oval Office and their elected representatives if Chicago is bailed out. I find it hard to believe the State of Illinois or the Feds could come to Chicago’s rescue without there being serious financial and political repercussions.

Chicago, the writing is on the wall. By the looks of things, that great city where I was born and from which I recently just left is now past the proverbial point of no return, no longer looking capable of effectively navigating the growing financial crisis.

While I don’t foresee the city’s death, I do envision a continuation of its already gradual decline until a point of fiscal implosion is reached. Will it be Detroit-esque in its bottoming out? I don’t know. But it sure as hell won’t be pretty.

Faced with such a scenario, will Chicagoans choose to stay and contend with the almost certain prospect of much higher taxes and fees in conjunction with curtailed city services (public safety comes to mind here), or will they depart the “Second City” like I did?

One might think the latter (going), but I’m sure there will be plenty of the former (staying).

In the interests of surviving and prospering, which is the better choice?

I don’t think the answer is as clear-cut as many readers might think. And it’s something I’ll be exploring and blogging about more in the coming days.

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

Sources:

“Chicago is on the road to Detroit.” Chicago Tribune. 5 Feb. 2014. (http://www.chicagotribune.com/news/opinion/editorials/ct-chicago-debt-edit-0205-20140205,0,3757189.story). 6 Feb. 2014.

Spielman, Fran. “City Council OKs going $1.9 billion deeper into debt.” Chicago Sun-Times. 5 Feb. 2014. (http://www.suntimes.com/25398572-761/city-council-oks-going-19-billion-deeper-into-debt.html). 6 Feb. 2014.

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Chicago Borrows $1.9 Billion, Piling On More Debt ‘For The Children’

“Mayor Rahm Emanuel closed the books on 2011 with $310 million in cash on hand, $167 million more than the year before, but added $465 million to the mountain of debt piled on Chicago taxpayers, year-end audits show…

The new round of borrowing brings Chicago’s total long-term debt to just over $27 billion. That’s $10,000 for every one of the city’s nearly 2.7 million residents. More than a decade ago, the debt load was $9.6 billion or $3,338-per-resident.”

-Chicago Sun-Times website, July 22, 2012

“Mayor Rahm Emanuel closed the books on 2012 with $33.4 million in unallocated cash on hand — down from $167 million the year before — while adding to the mountain of debt piled on Chicago taxpayers, year-end audits show…

The new round of borrowing brings Chicago’s total long-term debt to nearly $29 billion. That’s $10,780 for every one of the city’s nearly 2.69 million residents.”

-Chicago Sun-Times website, July 26, 2013

Chicago keeps piling on massive amounts of debt. From Fran Spielman yesterday on the Chicago Sun-Times website:

Chicago will test the bond market for the first time since its bond rating dropped three notches, thanks to $1.9 billion in borrowings added Monday to the mountain of debt piled on Chicago taxpayers.

The City Council’s Finance Committee authorized two massive borrowings: a $900 million general obligation bond issue to refinance old debt, pay for equipment and capital projects and bankroll $100 million for legal settlements incurred last year and a $1 billion borrowing for Midway Airport.

The Finance Committee also agreed to double — from $500 million to $1 billion — a so-called “commercial paper” program used to cover short-term borrowing between bond deals.

The general obligation bond issue includes $200 million in debt refinancing and $130 million in debt restructuring to “better align revenues with our obligations,” as [Chief Financial Officer Lois] Scott put it.

The so-called “scoop-and-toss” technique will stave off even higher taxes and fees, but it will saddle Chicagoans with another decade of debt that should be paid off today

(Editor’s note: Italics added for emphasis)

Mayor Rahm Emanuel’s worn-out line “it’s for the children” comes to mind here.

As well as that saying “you can pay now or pay later.”

Which is what Chicagoans will eventually be forced to do when the city’s “financial reckoning day” arrives.

The Chicago Tribune did a pretty good job illustrating just how serious the city’s debt crisis is becoming. Hal Dardick, Heather Gillers, and Jason Grotto reported on the Tribune website yesterday:

In a move that will add to the city’s mountain of debt, Mayor Rahm Emanuel won support Monday from the City Council’s Finance Committee to issue up to $900 million in bonds backed by property taxes.

It’s the largest request put forth during Emanuel’s tenure and comes at a time when Chicago already has about $7 billion in outstanding general obligation debt, more per capita than bankrupt Detroit or any of the 10 biggest U.S. cities except New York

Monday, aldermen asked few questions about the borrowing as the ordinance authorizing the debt sailed through the committee with virtually no debate.

“It raises questions of how much City Council members understand the financial condition of the city and what the plan going forward will be to meet the debt,” said Laurence Msall, president of the nonpartisan Civic Federation budget watchdog group…

The amount of borrowing sought by Emanuel suggests his administration continues to need huge loans to run the city

(Editor’s note: Italics added for emphasis)

I can’t begin to tell you how depressing it is watching “The Machine” steadily bring the “City of Broad Shoulders” down to its knees. But what does City Hall care? More than likely they’ll have moved on to comfortable retirements or “bigger and better things” by the time the city implodes as a result of “scooping and tossing.”

Ubi Est Mea? (Pulitzer prize-winning newspaper columnist Mike Royko’s suggested Chicago city motto of “Where’s Mine?”)

How about “Not On My Watch,” all things considered?

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

Sources:

Spielman, Fran. “City to borrow $1.9 billion in first test since rating downgrade.” Chicago Sun-Times. 3 Feb. 2014. (http://www.suntimes.com/news/metro/25360629-418/city-to-borrow-19-billion-in-first-test-since-rating-downgrade.html). 4 Feb. 2014.

Dardick, Hal, Gillers, Heather, and Grotto, Jason. “Mayor seeks to borrow up to $900 million more.” Chicago Tribune. 3 Feb. 2014. (http://articles.chicagotribune.com/2014-02-03/news/ct-met-bonds-new-chicago-borrowing-20140204_1_tax-increases-city-leaders-finance-committee). 4 Feb. 2014.

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Chicago To Fight Gun Sale, Transfer Ban Ruling?

Supporters of gun rights scored a big victory in Chicago yesterday, continuing to undermine gun “control” efforts pushed by former Mayor Richard M. Daley and current Mayor Rahm Emanuel. The Associated Press reported this morning:

A federal judge on Monday overturned Chicago’s ban on the sale and transfer of firearms, ruling that the city’s ordinances aimed at reducing gun violence are unconstitutional.

U.S. District Judge Edmond E. Chang said in his ruling that while the government has a duty to protect its citizens, it’s also obligated to protect constitutional rights, including the right to keep and bear arms for self-defense. However, Chang said he would temporarily stay the effects of his ruling, meaning the ordinances can stand while the city decides whether to appeal…

So is Mayor Emanuel and the City of Chicago going to appeal the ruling of Judge Chang, an Obama appointee?

Dahleen Glanton and Jason Meisner reported on the Chicago Tribune website today:

Roderick Drew, a spokesman for the city’s Law Department, said in a written statement Monday that Mayor Rahm Emanuel “strongly disagrees” with the judge’s decision and has instructed city attorneys “to consider all options to better regulate the sale of firearms within the city’s borders.”

So here’s a question Chicagoans might want to ask City Hall before a potential appeal is filed:

Seeing that all this stems from a 2010 lawsuit filed by three Chicago residents and an association of Illinois firearm dealers, how much, if any, is the City already on the hook for when it comes to the victors’ legal bills?

I seem to remember a certain check for $399,950 being coughed up by the City of Chicago to pay the Second Amendment Foundation for their legal costs in fighting the city’s handgun ban in the U.S. Supreme Court case of McDonald v. City of Chicago.

Followed shortly thereafter by a check for $663,294.10 to the National Rifle Association for their attorney fees related to the lawsuit.

Enquiring minds want to know…

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

Sources:

“Chicago gun sale ban unconstitutional, judge rules.” FOXNews.com. 7 Jan. 2014. (http://www.foxnews.com/us/2014/01/06/chicago-gun-sale-ban-unconstitutional-judge-rules/). 7 Jan. 2014.

Glanton, Dahleen and Meisner, Jason. “Judge scraps Chicago’s ban on retail gun shops.” Chicago Tribune. 7 Jan. 2014. (http://www.chicagotribune.com/news/local/breaking/chi-citys-gun-ordinance-ruled-unconstitutional-by-federal-judge-20140106,0,7182171.story?page=1). 7 Jan. 2014.

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Tuesday, January 7th, 2014 Firearms, Government, Gun Rights, Legal, Self-Defense No Comments

Chicago’s Finances A Mess For 2014 And Beyond

The beginning of the new year is always a popular time for predictions.

Here’s one I’ve heard being uttered with more regularity lately:

“Chicago’s the next Detroit”

You may recall that back on December 3, the City of Detroit officially became the largest municipality in U.S. history to enter Chapter 9 bankruptcy.

I’m guessing those making that comment presume the “Windy City” is going to be bankrupt too.

I just got done reading another comparison to Detroit being made again. This time it’s from TheStreet.com, the U.S. financial news and services website co-founded by Jim Cramer, host of CNBC’s Mad Money. Jonathan Yates wrote on December 30:

A recent report by the Economist Intelligence Unit rated Chicago one of the top 10 cities in the world for its ability to “attract capital, business, talent and tourists.”

Although that certainly will focus global attention on “The Second City,” Chicago’s precarious financial condition could result in it becoming even more well known — for going broke…

At least Detroit had an excuse with the collapse of the automobile industry.

The major reason for Chicago’s financial woes is mismanagement. The city’s employee costs, especially for pensions, are unsustainable…

Yates, a contributor to TheStreet.com, suggests investors avoid Chicago bonds. He pointed out later in his piece:

Chicago is a great city with great restaurants, great museums and great architecture.

But those are not reasons to buy its bonds, because Chicago’s finances are a mess, and that won’t change anytime soon…

“Chicago’s finances are a mess, and that won’t change anytime soon…”

Sadly, I agree with him there.

Now, Yates mentioned Chicago’s public pension crisis. Back on August 5, The New York Times highlighted just how serious a threat it is to the city’s well-being. Monica Davey and Mary Williams Walsh reported on the Times website:

Corporations are moving in, and housing prices are looking better across the region. There has been a slight uptick in population. But a crushing problem lurks beneath the signs of economic recovery in Chicago: one of the most poorly funded pension systems among the nation’s major cities. Its plight threatens to upend the finances of President Obama’s hometown, now run by his former chief of staff, Rahm Emanuel.

The pension fund for retired Chicago teachers stands at risk of collapse. The city’s four funds for other retired city workers are short by $19.5 billion. At least one of the funds is in peril of running out of money in less than a decade. And starting in 2015, the city will be required by the state to make far larger contributions to the funds, which could leave it hundreds of millions of dollars in the red — as much as it would cost to pay 4,300 police officers to patrol the streets for a year

(Editor’s note: Italics added for emphasis)

Rick Lyman of the Times added on December 4:

Under state law, the city must increase its contributions to its workers’ pension funds by $590 million in 2015, to a total annual contribution of $1.4 billion for current and future retirees. If no pension deal can be reached by November of next year, when the city will draft its next budget, the city will either have to raise taxes or cut services or some combination of both

(Editor’s note: Italics added for emphasis)

City Hall and their supporters can spin Chicago’s growing financial crisis as much as they want. But at the end of the day, they’ve got all the above problems to contend with as well as a long-term debt that’s now up to nearly $29 billion, or $10,780 for every city resident, according to the latest City of Chicago official audit.

I became aware of the extent of Chicago’s financial woes a couple of years back.

It’s a big reason why my girlfriend and I moved out of the city when we did.

I’ve been warning about this debacle for some time now on this blog. I can only hope my Chicago-based readers have taken note of it and are at least thinking about how they might minimize their exposure to the coming mess.

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

Sources:

Yates, Jonathan. “Avoid Chicago’s Bonds; It Could Be the Next Detroit.” TheStreet.com. 30 Dec. 2013. (http://www.thestreet.com/story/12188473/1/avoid-chicagos-bonds-it-could-be-the-next-detroit.html). 3 Jan. 2014.

Davey, Monica and Walsh, Mary Williams. “Chicago Sees Pension Crisis Drawing Near.” The New York Times. 5 Aug. 2013. (http://www.nytimes.com/2013/08/06/us/chicago-sees-pension-crisis-drawing-near.html?pagewanted=1&_r=0&src=me). 3 Jan. 2014.

Lyman, Rick. “Chicago Pursues Deal to Change Pension Funding.” The New York Times. 4 Dec. 2013. (http://www.nytimes.com/2013/12/05/us/chicago-pursues-deal-to-change-pension-funding.html?_r=0). 3 Jan 2014.

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Chicago Tallies 415 Murders In 2013

Good news for the city of Chicago- murders stayed under the 500-mark in 2013. Jeremy Gorner reported on the Chicago Tribune website last night:

Homicides dropped 18 percent in Chicago last year and crime overall was down 16 percent, according to statistics released by the police department this morning.

The decline in homicides was a more modest 5 percent when compared with 2011. The department reported 435 homicides in 2011, 503 in 2012 and 415 in 2013…

Chicago has surpassed 500 murders twice in the last five years. In 2008, under Mayor Richard M. Daley, the number of homicides reached 513, declining to 460 in 2009, 437 in 2010, and 435 in 2011 before jumping to 503 in the first full year of Mayor Rahm Emanuel’s administration.

Gorner also added in his piece:

Shootings across the city dropped by 24 percent from 2012 and 16 percent from 2011, according to the department’s numbers. Sexual assaults were down 6 percent from last year, robberies down 12 percent, serious battery down 16 percent, burglaries down 22 percent, motor vehicle thefts down 23 percent, thefts down 3 percent.

The reductions came at a price: Nearly $100 million in overtime pay, triple what was budgeted for 2013…

“Nearly $100 million in overtime pay”

Unsustainable, especially when you consider the City of Chicago’s growing financial woes.

As for the City’s rosy crime statistics- there’s talk the reported numbers don’t reflect the reality of Chicago’s criminal activity.

Personally, the news on the crime front is encouraging. But I’m going to take it with a grain of salt.

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

Source:

Gorner, Jeremy. “Chicago police: Crime down 16 percent, homicides down 18 percent.” Chicago Tribune. 1 Jan. 2014. (http://www.chicagotribune.com/news/local/breaking/chi-chicago-police-crime-down-16-percent-homicides-down-18-percent-20140101,0,3868242.story). 2 Jan. 2014.

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Thursday, January 2nd, 2014 Crime, Debt Crisis, Government, Public Safety No Comments

Chicago Residents Hit With Fee, Fine, And Tax Hikes In 2014

Chicagoans- get ready for a bunch of new fee, fine, and tax hikes starting January 1.

Fees for certain parking and speeding infractions, impounded vehicle storage, and construction permit filings are going up.

“Amusement” taxes on cable television will jump 50 percent.

Beginning January 10, yet another cigarette tax hike of 50 cents per pack takes effect. Adding federal, state, and county taxes will leave Chicago with the highest taxes ($7.17) on cigarettes in the country.

None of this applicable to you? There’s more. I read an article by Hal Dardick in my Sunday paper (Chicago Tribune) this morning which warned:

The widest-felt effects will stem from the property tax increase enacted in August by the Chicago Board of Education and higher water and sewer fees set in motion during Emanuel’s first year in office as a way to pay for the replacement of aging mains.

The owner of a home valued at $213,000 can expect to pay about $51 more in school property taxes next year. It’s the third year in a row that Chicago property owners will get hit with higher school taxes.

City property owners and suburban governments that buy city water face a 15 percent increase in water rates. In some cases, suburban utilities will pass the increases on to people who buy their water. Sewer charges, added to city property owners’ bimonthly bills, will be 96 percent of their water tab, an increase of 4 percentage points…

“The owner of a home valued at $213,000.”

Not many decent houses down around that price level in my old neighborhood on the Northwest Side. Even in adjacent neighborhoods.

$51 would be just the starting point in that part of Chicago.

Dardick added later:

All of the new city fines and fees are expected to pump about $32.4 million into city coffers next year…

“$32.4 million.” Yeah, we’ll see.

Why such a “Doubting Thomas”? If anything, smokers who aren’t already doing it might be even more motivated in the new year to purchase their cigarettes outside of the Chicago city limits, depriving the City of Chicago of much needed and anticipated revenue.

Then there’s the possibility that a significant number of Chicagoans might become extra-wary going forward about being slapped with the well-publicized and more expensive parking and moving violations. More anticipated money gone.

And down the road, there’s already talk among certain suburbs of bypassing Lake Michigan water collected and distributed by the City of Chicago.

Regardless, Chicago residents- should they choose to remain in the “Windy City”- should keep on expecting higher fees, fines, and taxes in the years to come.

Then again, the same might be said for a lot of places across the United States.

But to the degree that I expect Chicagoans to get hit with? Not really.

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

Source:

Dardick, Hal. “Higher Chicago taxes, fines and fees for 2014.” Chicago Tribune. 20 Dec. 2013. (http://www.chicagotribune.com/news/local/ct-chicago-new-taxes-fees-met-20131222,0,6847986.story). 22 Dec. 2013.

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Retired CPD Sergeant And TouchVision Crime Reporter Calls Out Chicago Mayor Rahm Emanuel And Pals

Any Chicago-area readers of this blog ever watch TouchVision, the new 24-hour video news and information channel that’s only recently come to the city? In these parts it’s located over on subchannel 48.2. Not sure if it’s on cable or satellite TV just yet.

Anyway, I was watching TouchVision’s Crime Report last night with my girlfriend, when retired Chicago Police Department sergeant and crime reporter Pete Koconis came on. Koconis talked about a recent murder as part of an ongoing feud between two different factions of the Gangster Disciples street gang in Chicago when he launched into this stinging criticism of Mayor Rahm Emanuel and his cronies down at City Hall:

Forget the guy who gets on that television set [and says] “homicides are down.” Sure they are. Is it because of him? No. It’s because of the men and women in blue who risks their lives on your streets daily, and the emergency room doctors who somehow save lives…

Oh, there’s more. Koconis added later on:

Stop spending money on making your city look good. Spend the money on making the city work. Where you can be safe anywhere, and at any time.

Amen.

I don’t know if it’s realistic to think “you can be safe anywhere, and at any time” entirely in the “concrete jungle” that is Chicago.

Still, there’s no use of gussying up the joint when the city is crime-infested as a result of short-changing public safety.

Along those same lines, the attitude taken by City Hall these days seems to be “if you build it, they will come.”

No. Not if Chicago cements its growing reputation as being a dangerous place to live/visit they won’t.

Safety first. Otherwise City Hall is just putting lipstick on a pig.

As Democrats like to say a lot these days, “It’s only common sense.”

You can watch this latest Crime Report on TouchVision’s website here. Plug “gangs” into the site’s query tool (click on magnifying glass along right-hand side) and look for “GANG TURF WAR 12/6/2013″ among results.

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

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Thoughts On Illinois State Lawmakers Passing Public Pension ‘Fix’

The Illinois General Assembly barely passed legislation yesterday that’s been touted to “fix” the state’s $100 billion public pension crisis.

Illinois Governor Pat Quinn, who has promised to sign SB0001, declared in a press release Tuesday:

Since I took the oath of office, I’ve pushed relentlessly for a comprehensive pension reform solution that would erase a $100 billion liability and restore fiscal stability to Illinois.

Today, we have won. The people of Illinois have won.

Not so fast, big guy.

First off, as I blogged yesterday, the Wall Street Journal recently picked apart the legislative “fix,” and concluded not only was it “fake” but:

Even under the most optimistic forecasts, these nips and tucks would only slim the state’s pension liability down to $80 billion- which is where it was after Governor Quinn signed de minimis fixes in spring 2010 to get him past that year’s election…

Second, this legislation is almost certainly headed to court, as in the Illinois Supreme Court. As I noted on December 1, a provision of the 1970 Illinois Constitution defines public pension benefits as “an enforceable contractual relationship” that “shall not be diminished or impaired.”

Even the top-ranking Democrat in the Illinois Senate wonders if SB0001 can pass legal muster. Ray Long and Monique Garcia reported on the Chicago Tribune website this morning:

Senate President John Cullerton, whose earlier union-backed plan to curb pension spending was stymied by House Speaker Michael Madigan, said he remained concerned that the package passed by lawmakers violated a state constitutional ban on diminishing or impairing public pension benefits.

Cullerton, whose Senate Democrats had been viewed as closer to the unions than Madigan’s House majority, said he viewed it important to get something before the courts to decide whether the approach is legal.

“I think the bill has serious constitutional problems, I’ve made that clear from the start, but now it’s in front of the court and they can decide,” Cullerton said.

And decide they will, meaning this supposed “fix” for the state’s public pension crisis might eventually amount to nothing.

I thought Mark Brown of the Chicago Sun-Times summed it all up well. Brown wrote on the Sun-Times website yesterday afternoon from Springfield:

Oh, how I wish I could tell you that the long fight to fix Illinois’ grossly underfunded public pension plans was at an end with Tuesday’s historic votes by the state Legislature.

But that wouldn’t be true.

First, there will be a court challenge — or more likely challenges — brought by state workers, teachers and their retirees, along with the unions that represent them.

And before those cases can even work their way through the system, state lawmakers will have to decide in early 2014 how they are going to handle Chicago’s pension problems — beginning with those of city teachers.

Other local officials, including Cook County Board President Toni Preckwinkle are clamoring for pension relief as well, which will combine with Mayor Rahm Emanuel’s priorities to keep the issue on the front burner.

If the courts strike down the pension reform plan approved Tuesday on narrow votes by both chambers, or even if they rule out parts of it, we could be back here within a year or two to start over.

(Editor’s note: Italics added for emphasis)

What transpired Tuesday in the Illinois General Assembly might be a first step in “fixing” the state’s public pension crisis, but much more work and sacrifice will eventually be required to arrive at a real solution.

Question is, is the will even there among Illinoisans and their elected state officials to do this?

I kind of doubt it.

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

Sources:

Garcia, Monique and Long, Ray. “Unions vow legal fight as lawmakers OK pension overhaul.” Chicago Tribune. 4 Dec. 2013. (http://www.chicagotribune.com/news/chi-illinois-pension-vote-20131203,0,5070497.story). 4 Dec. 2013.

Brown, Mike. “Brown: State’s financial problems far from over.” Chicago Sun-Times. 3 Dec. 2013. (http://www.suntimes.com/24156150-761/brown-states-financial-problems-far-from-over.html). 4 Dec. 2013.

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Chicago Sun-Times Highlights Chicago Police Department Manpower Shortage

I had to laugh when I saw the Chicago Sun-Times website this afternoon. Displayed on their homepage was the following headline and article intro:

Emanuel’s 2014 budget sails through City Council with ease

Chicago will have the nation’s highest state and local tax on cigarettes — and use $75 million in police overtime to mask a manpower shortage- thanks to a $7 billion 2014 budget that sailed through the City Council Tuesday on a 45-5 vote. “No” votes were cast by Aldermen Bob Fioretti (2nd), Ricardo Munoz (22nd), Scott Waguespack (32nd), Nick Sposato (36th) and John Arena (45th).

(Editor’s note: Italics added for emphasis)

“To mask a manpower shortage”

To tweak that line about Billy Idol from the 1998 film The Wedding Singer

See, the Sun-Times gets it.

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

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Tuesday, November 26th, 2013 Fiscal Policy, Government, Public Safety No Comments

Chicago Mayor Rahm Emanuel And Police Superintendent Garry McCarthy Call For More Gun ‘Control’

The first anniversary of the Newtown, Connecticut, shootings is right around the corner, and supporters of gun “control” are becoming increasingly vocal about their desire for more restrictions. Not surprisingly, Chicago Mayor Rahm Emanuel and Chicago Police Department Superintendent Garry McCarthy chimed in yesterday with their calls for more gun “control” while celebrating the Brady Handgun Violence Prevention Act, or “Brady Bill,” which was signed into law on November 30, 1993, and required background checks be conducted on individuals before a firearm can be purchased from a federally-licensed dealer. C. Hayes wrote on Chicago’s WGN TV website Thursday:

Mayor Emanuel, Chicago Police Supt. Garry McCarthy, and the Illinois Association of Chiefs of Police, and the National Law Enforcement Partnership to Prevent Gun Violence mark the upcoming, 20th anniversary of an historic gun law while also pushing for even tougher gun rules in Chicago

At Thursday’s gathering, the leaders said the explosion of the internet has undermined the law. They point out up to 40 percent of firearms sales are through the internet between private parties

“While gun shows were around, they weren’t really conceived of in the way that they are today for purchases and moving of guns,” said Emanuel.

(Editor’s noted: Italics added for emphasis)

CPD Superintendent McCarthy had this to say about the group’s desire for universal background checks:

I think some people wrongly believe that requiring background checks will have no impact on criminals and will only create a system that impacts the good citizens who comply with the law. That couldn’t be further from the truth.

Speaking of “the truth,” back on March 21, 2013, FactCheck.org looked into the line that “40 percent of guns are purchased without a background check.” Here’s what they found:

That figure is based on an analysis of a nearly two-decade-old survey of less than 300 people that essentially asked participants whether they thought the guns they had acquired- and not necessarily purchased- came from a federally licensed dealer. And one of the authors of the report often cited as a source for the claim — Philip Cook of Duke University — told our friends at Politifact.com that he has “no idea” whether the “very old number” applies today or not.

(Editor’s note: Italics added for emphasis)

Ironically, a number of FactCheck.org’s critics claim the fact-checking project is actually liberal-leaning, not unbiased as many might think.

Too funny.

Sources:

Hayes, C. “City officials mark 20th anniversary of ‘Brady Bill’” WGN TV. 21 Nov. 2013. (http://wgntv.com/2013/11/21/brady-bill-anniversary-marked/). 22 Nov. 2013.

“Guns Acquired Without Background Checks.” FactCheck.org. 21 Mar. 2013. (http://www.factcheck.org/2013/03/guns-acquired-without-background-checks/). 22 Nov. 2013.

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

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Revised Illinois Gun Crime Penalties Bill Could Still Cost $549 Million Over 10 Years

Illinois readers- remember that legislation at the state level that’s been backed by the Emanuel administration in Chicago and Cook County State’s Attorney Anita Alvarez that would have raised mandatory minimum prison sentences for gun crimes and require offenders to serve 85 percent of their sentences? I understand it’s been revised.

Still, a major roadblock remains.

From the Associated Press this morning:

Illinois prison officials say revised legislation stiffening penalties for gun crimes would still cost hundreds of millions of dollars and add inmates to the crowded correctional system.

The Springfield bureau of Lee Enterprises newspapers reports the figures come from the Illinois Department of Corrections.

The agency says the latest version of the gun bill would add nearly 2,500 inmates to the state’s prison system and cost another $549 million over 10 years. That covers operating and construction costs.

(Editor’s note: Italics added for emphasis)

“Another $549 million over 10 years.”

Remember- this projection is coming from a State of Illinois agency.

If these figures are kosher, this legislation will be incredibly hard to justify in light of the State’s serious financial problems.

Anyway, I thought Illinois law already mandates a minimum 15-year sentence when a person with a firearm commits any felony offense and a minimum 1-year sentence for unlicensed gun possession and licensed possession of a loaded gun? At least that’s what Illinois State Senator and Illinois Senate Criminal Law Committee member Patricia Van Pelt (D-Chicago), said in a Chicago Tribune commentary back on October 23.

Sources:

“Revised gun bill still could be costly, prison officials say.” Associated Press. 19 Nov. 2013. (http://www.sj-r.com/breaking/x529851355/Revised-gun-bill-still-could-be-costly-prison-officials-say). 19 Nov. 2013.

Van Pelt, Patricia. “Mandatory minimum sentences well-meaning but ineffective.” Chicago Tribune. 23 Oct. 2013. (http://www.chicagotribune.com/news/opinion/commentary/ct-perspec-1023-guns-20131023,0,4533465.story). 19 Nov. 2013.

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

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Tuesday, November 19th, 2013 Crime, Debt Crisis, Firearms, Government, Legal No Comments

‘Mancow’ Moves Family Out Of ‘Unlivable’ Chicago

In the late 90s-early 2000s, I used to drive 30 miles each way to and from work during the business week (thankfully, gas was relatively cheap at that time). Therefore, I had plenty of time to kill during the commute. Back then, I used to tune into Mancow’s Morning Madhouse, a radio show hosted by Chicago-based “shock jock” Erich “Mancow” Muller once in a while. Mancow is going strong in 2013 with a presence on both the radio and television, and still manages to make headlines. Bob Goldsborough reported on the Chicago Tribune website this morning:

Calling his decision to leave the city “heartbreaking,” radio host and reality TV star Erich “Mancow” Muller has sold his Lincoln Park condominium and decamped to a house in Wilmette.

Muller, who is a married father of twin school-aged daughters, told Elite Street he’d had enough with city living.

“The schools are awful. I guess I could have had (my daughters) go to public schools, but I don’t want them to be stupid. I drove past Lincoln Park High School every day, and the kids are cursing and yelling and have their hands down each other’s pants,” he said. “And then, I was spending $45,000 a year for the (private) British School of Chicago. It was killing me.”

Mancow also said there were always homeless people outside his door and street parking he often used was raised from a quarter an hour to $13 an hour.

“I think they’ve done a good job of making the city unlivable for families. I’m so sick of feeding the broken government in Chicago,” he said.

“The schools are awful.” “I’m so sick of feeding the broken government in Chicago.”

Leave it to a shock jock to “candy-coat” his displeasure with the Chicago Public Schools and the Democratically-controlled City of Chicago.

Maybe I should start listening to Mancow on the radio again?

In all seriousness, it sucks that the Muller family feels things have gotten to the point in Chicago where they need to leave.

I wonder how many other Chicagoans feel the same way?

While some may think Mancow’s gripes are just “signs of the time” or consequences of “city living,” regular readers know my girlfriend and I just split Chicago recently after concluding we weren’t comfortable either with the direction the Midwest metropolis seems to be heading. Our “beef” has more to do with financial mismanagement and public safety- or lack thereof- however.

Unfortunately, barring a major financial crisis, “The Machine” and “business as usual” looks to be firmly established in Chicago for now.

From where I stand, however, it certainly looks like storms clouds are gathering on the horizon.

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

Source:

Goldsborough, Bob. “Calling city ‘unlivable,’ Mancow sells Lincoln Park condo.” Chicago Tribune. 18 Nov. 2013. (http://www.chicagotribune.com/business/breaking/chi-mancow-leaves-city-elite-street,0,3188814.story). 18 Nov. 2013.g/chi-mancow-leaves-city-elite-street,0,3188814.story). 18 Nov. 2013.

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Report: Chicago Could Soon Require ‘Signficant Increase In The City’s Property Tax Levy, Crippling Cuts To City Services Or Both’

Fresh off publishing a report that found Chicago’s financial condition fared worse than many major U.S. cities from FY2007 to FY 2011 comes this from The Civic Federation, an independent, non-partisan government research organization that provides analysis and recommendations on government finance issues for the Chicago region and State of Illinois. From a press release eariler today:

In a report released today, the Civic Federation announced its support for the City of Chicago’s proposed $7.0 billion budget as a reasonable short-term plan that continues to reduce the City’s structural deficit. However, Chicago’s fiscal and economic stability continue to be jeopardized by the failure to fix the City’s broken pension system. The full 111-page analysis is available at www.civicfed.org.

“This budget should serve as an urgent reminder of the enormous price the City will pay if it is unable to stabilize its pension system,” said Laurence Msall, president of the Civic Federation. “Mayor Emanuel and his team have made significant fiscal progress in recent years, much of which will be derailed when the City’s unaffordable pension contribution increase takes effect next year.” The City faces a $590 million increase in its required pension contribution in FY2015, a rise so sharp it would require a significant increase in the City’s property tax levy, crippling cuts to City services or both

(Editor’s note: Italics added for emphasis)

That massive jump in the City of Chicago’s required pension contribution should come as no surprise to regular Survival And Prosperity readers. It’s been something I’ve been warning about for a while now.

So what does The Civic Federation recommend to fix Chicago’s public pension crisis? From the new report, entitled “CITY OF CHICAGO FY2014 PROPOSED BUDGET: Analysis and Recommendations”:

Work with the State legislature to enact comprehensive pension reform specific for the City pension funds, including changing employer and employee contributions so that they relate to the funded status of the plans, reducing benefits for current employees and retirees, pursuing pension fund consolidation and reforming pension board governance

“Including changing employer and employee contributions so that they relate to the funded status of the plans, reducing benefits for current employees and retirees”

I’m guessing many City of Chicago employees and retirees won’t be to happy with these particular recommendations.

You can read the entire press release on The Civic Federation’s website here, and view the new report on the site here.

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

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Wednesday, November 13th, 2013 Entitlements, Fiscal Policy, Government, Retirement, Taxes No Comments


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