Congratulations of sorts go to Chicago for having the most messed up pension plan of any city in the nation.
Please consider Chicago faces crisis over pension funding, how to pay for it
Much has been made of retiring Mayor Richard Daley’s plan to draw down reserve funds to balance next year’s city budget and how it could burden his successor.
But the chairman of the Finance Committee, Ald. Ed Burke, today talked about a far larger problem. One in four pension funds for city workers will go broke in the next decade, if current funding levels continue and markets don’t improve, and all will be belly up by 2032 if nothing gives.
“It’s similar to watching the house burn down without turning on the fire hydrant,” said Burke, 14th, during the first day of hearings on Daley’s proposed $6.15 billion budget. “At the present time, the city pension funds are actually selling assets to meet obligations.”
Stabilizing employee pensions long-term would require greater employee contributions, higher taxes, major changes to the pension systems or a combination of those steps. Without relief, the city would have to about double its property taxes for the next 40 years to cover its pension obligations, said Gene Saffold, the city’s chief financial officer.
To cover the outstanding liabilities, each household in Chicago would have to pay $41,966, the report concluded. That’s the highest per-home amount among U.S. cities.
Number of Chicago Households
Inquiring minds just may be wondering “How many households are in Chicago?“
The answer is 1,044,027. That would make the pension liability a mere $43,813,637,082.
Chicago is bankrupt.
Mike “Mish” Shedlock
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