unfunded liabilities

City Of Chicago’s Total Unfunded Liabilities Grew To Nearly $24 Billion In 2015

It’s been a while since I last blogged about the Illinois Policy Institute, a Chicago-based non-partisan research organization “generating public policy solutions aimed at promoting personal freedom and prosperity in Illinois.” Yet earlier this week, Ted Dabrowski and John Klingner published a sobering piece on the Institute’s website about Chicago’s mounting financial woes that just needs to be disseminated. From their article:

Chicago property owners concerned about their future property-tax bills have had plenty to worry about over the past year- but a new report on the city’s crumbling finances has all but ensured that property-tax hikes will continue to be a painful reality for local homeowners.

The city already passed a $700 million hike in October 2015 to help plug the hole in police and firefighter pensions, and the city is expected to raise property taxes by another $250 million to fund ailing Chicago Public Schools, or CPS, pensions. And with billions more in other health care and pension shortfalls still unfunded, more hikes are on the way.

But the newest debt numbers in the city’s 2015 Comprehensive Annual Financial Report, or CAFR, show that without massive pension reforms, the city’s tax hikes are just beginning. The report found that the total city debt Chicagoans are on the hook for has more than tripled since 2014.

Chicago’s total unfunded liabilities have jumped by over $17 billion, growing to nearly $24 billion in 2015 from $6.5 billion in 2014. The increase is mostly due to new accounting standards and the fact that in March the Illinois Supreme Court struck down the city’s recent attempt to reform its broken municipal-workers and laborers pension funds.

Add to that their share of sister-government and Cook County pension and health care costs and long-term debt, and Chicagoans are on the hook for over $65 billion

(Editor’s note: Bold added for emphasis)

Disturbing stuff. But that’s reality for you.

You know, last week I read an “interesting” anonymous comment on the popular Chicago police blog Second City Cop. From the July 7 post entitled “And There it is….”:

Millennials as they are called are falling over themselves to move here. Look at Ukrainian village, Buck town south loop West loop, Lincoln Park. The city is becoming gentrified. Major companies are moving their headquarters here. City is on the upswing like it or not.

“City is on the upswing like it or not.”

Never mind its financial cancer that’s bound to metastasize in due time…

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

Sources:

Dabrowski, Ted and Klingner, John. “Chicago’s Total Debt More Than Triples To Over $24B In 2015.” Illinois Policy Institute. 11 July 2016. (https://www.illinoispolicy.org/chicagos-total-debt-more-than-triples-to-over-24b-in-2015/). 14 July 2016.

SCC. “And There it is…” Second City Cop. 7 July 2016. (https://www.illinoispolicy.org/chicagos-total-debt-more-than-triples-to-over-24b-in-2015/). 14 July 2016.

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Illinois’ Total Unfunded Liabilities: $275 Billion

The following bit about Illinois’ total unfunded liabilities from a January 28 Investor’s Business Daily editorial was so depressing to read that I originally planned to blog about it much earlier this morning- but needed to step away. From the IBD website:

A recent release by the Illinois Policy Institute shows this [$96.8 billion unfunded debt to five state pension systems] is only the tip of the iceberg and when you add in other liabilities such as $54 billion in unfunded liabilities for retiree health insurance and $15 billion in pension bonds that Gov. Pat Quinn and his immediate predecessor, former Gov. Rod Blagojevich, issued to avoid pension reform, Illinois’ total unfunded liabilities amount to $275 billion, or $58,000 in debt for each and every household in the state.

(Editor’s note: Italics added for emphasis)

So what’s it going to be, Illinois? Since a booming economy seems unlikely to return anytime soon, will the Democrat-dominated Illinois General Assembly finally enact significant spending cuts? Raise fees and taxes through the roof? Throw public sector retirees “under the bus?”

They’re going to have to do something real quick.

Or watch the whole thing unravel.

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

Source:

“Obama’s Illinois Downgrade Makes It America’s Greece.” Investor’s Business Daily. 28 Jan. 2013. (http://news.investors.com/ibd-editorials/012813-642237-credit-downgrade-illinois-standard-poors-worst.htm). 31 Jan. 2013.

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