Timely Article
Someone at Crain's is looking ahead:
It won’t be news to readers that Chicago is struggling financially. Chicago is not yet on the brink of default, but the city has started accelerating down an increasingly slippery slope of financial undoing. The city’s general obligation bond rating was downgraded by S&P and Kroll last year, and just downgraded by both Fitch and Kroll this week. As a consequence, investors have started demanding higher returns for Chicago’s general obligation bonds and even some of its safest revenue bonds. Thanks to the property tax disbursement fiasco at Cook County, the city is now struggling with its cash flow. These are all bad signs. It’s still possible for the city to course-correct, but Chicago is nearing a financial point of no return. If we reach that point, leaders should look to Detroit’s bankruptcy experience as both an indication of things to come and a positive example of how bankruptcy can help an insolvent city move toward financial and political stability.
Right now, Chicago spends about 40% of its operating budget on debt service and pension payments. That effectively means that only 60 cents out of every tax dollar goes towards providing services for current residents. As the city’s credit rating slips, borrowing costs will continue to climb, creating a vicious cycle that will end in service reduction, ballooning debt service payments or both. Before it filed for bankruptcy in 2013, Detroit faced an even more severe version of the same basic issue; the city spent 65% of its operating budget on legacy debt payments. Then the city filed for municipal bankruptcy.
Illinois currently doesn't allow for municipalities to file for Chapter 9, so the minute that a bill shows up in Springfield to allow it, you know that Chicago has one foot in the grave.
In the meantime, it's an interesting read with lessons learned from Detroit. Chicago is still quite a ways from insolvency, but it's definitely closer in the rear view mirror than in years past.
Labels: money questions
posted by SCC at 12:01 AM
64 Comments:
Objects in mirror are closer than they appear
don't worry...all those illegals are going to pay taxes......
We just need a fiscally responsible mayor. but they just keep electing morons.
It’s all up to everyone to vote and to vote totally new blood no matter what. Vote republican whenever possible. Has everyone forgotten what the democrat politicians did during COVID. Totally miss handled everything.
I received my property tax bill this week, and when I opened it, I was astounded. For Chicago to learn from Detroit’s experience, it would need intelligent individuals to lead the city. Unfortunately, that hasn’t been the case for the past three decades. I sincerely hope that someone with the necessary vision and leadership emerges to save the city.
Democrats
Democrats
Democrats
Debt and pensions? Same thing no? Sure, there's a little set aside, but reality is the current crowd of retirees will eat through that like a termite through wood. Anyone 50 or older will get theirs for a bit, but man, I wouldn't want to be the 40yo with nothing else but a lie to depend on....
Hope everyone has other income besides the pension
Way to go Toni Preckwinkle, delay tax collection so dimwit Brandon Johnson can't pay for his incompetent leadership while JB fiddles for a presidential run.
The brightest dimwits in leadership.
Political stability in Chitcago? As long as there's at least one standing light post unstolen and some rope, there's hope for some political stabilty.
We will all continue to feel the pain of this idiot running chicago, but thankfully the ghetto dwellers have been punished for helping to vote him in.
Can’t the city just open up some daycares a bilk the feds for billions to fund the pensions?
They will never claim bankruptsy. They will never open their books for a financial audit. That will expose where every single dollar goes. And it will put where ever single dollar goes in the hands of a Judge and out of the City’s. All the Democrats little secret funds, how much they re giving to their bs socialist DEI programs , etc. This is what happenes when you hire an ignorant activist for Mayor and he hires all his activist friends.
And before all the pension comments on here, do your homework. There are multiple articles that show, in Detroit, Police and Fire who are currently getting a pension only list their Cola. New pensions were restructured.
gotta wonder if not having a Republican mayor in 100 years might have something to do with all that waste/theft?
I figure my deferred plus other investments will keep me afloat after the pension haircut which I predict occurs about 2030. Moved to a free state with low taxes after 2020. Already saved approximately $45,000 in taxes alone. Not to mention all the other savings, plus the joy of living amongst normal Americans.
And of course cutting spending is never part of the equation.
Now, kees me you fool!!!!
Residential property taxes in Chicago have been much lower than the suburbs for a very long time. It is not uncommon in the Suburbs to pay 8-9 grand for a townhome and 13 grand for a single family house. Then you have to pay for water, sewer and garbage collection.
Plenty of revenue here it has just been mismanaged for so long it has now become a critical problem. You can't put the clowns in charge of the money at the circus.
And the Democrats are contributing to lower bond.credit ratings. How low can you go, before you cannot dig out?
Nothing apparently is being leaned from California or New York.
You know those in charge are awaiting FED money.
It's the lack of confidence and investment that has me concerned. Recently took a cruise out of the port on Miami, lost count of the high rise construction cranes at over 20 and that was a limited view of a downtown and oceanfront city stretching for miles more. Miami lures business, Chicago increasingly looks to tax them more.
This union member watched the Detroit bankruptcy closely. When the city listed their assets they failed to include the art collections donated by the Ford, Dodge, Chrysler etc. families to their museums. I wonder what the collections in our museums are worth? Imagine the Gold Coast libs reactions to the threat of having to pawn those and other city owned assets off?
Wait a minute, Pritzker just had a commercial on that said Illinois's credit rating has been rising, I'm so confused.
They never talk about cuts in the budget, only raising taxes and taking care of our illegals.
Start cutting out the free stuff and layoff the overpaid exempt bossholes that do nothing!
Time to defend those pension obligations. The Union should file liens against city owned assets - real estate, art, the parking meters (oops somebody got that one already) the mayor's desk.
on March 4th Chicago will be 187 years old & holding an insane amount of debt, each & every year of those years taxes were collected.
How many people in all those years bought homes, worked hard, cut back
when necessary & held to the idea of the final payment & got there all while paying their "fair share".
All levels of government should be held to this simple math plan, cover the
necessities, cut out the waste, stop the not knowing where the money is going, stop paying those who do not work due to laziness.
It's as simple as 2+2
A major tell the city is headed toward bankruptcy is companies leaving. Even before you see a bankruptcy law proposed for Chicago you will see a major exodus of businesses large and small who don't want to get stuck with the bill.
Brandon spent 300+ million on supporting illegals. That is about equal to last years city budget shortfall.
Moving is the only solution.
And all the idiots in this state /city will still vote for Democrats Democrats Democrats
Never say never
May I ask which state? I'm looking.
Pensions are a mere drop in the bucket, compared to moocher costs, graft, frauds, and various other schemes and scams.
MAGA D.O.G.E. therapy is required.
Think of what you get for those taxes. Premium schools, safe neighborhoods, first class public transportation, clean streets, and a mayor who is destined for higher office. It's a bargain.
Finally
would all the money spend on illegals, PPE fraud ,covid fraud, stop the violence interrupters, reparations save the pension fund?
Is Gov JB . Raj , Robin,Prickwinkie , looking into the autistic lerning centers in the south suburbs? might be fraud?
Not sure where you have been.......we have been paying separate water, sewer and garbage bills for years now.
Speaking of affordability, the democrat in charge of the county's assessor's office sent out bad paper to property owners. Affordability! Affordability! Taxes have no affordability impact. The poll tested democrat mantra of "Affordability" shrills should get the Crook County taxing solution mafia reelected keeping their schemes alive.
It seems like we only get bad news about Chicago city finances, schools, crime and corruption.
I’m left behind in Hyde Park where I grew up, my immediate neighborhood is nice, good neighbors, sure lots of them put up stupid signs about Woke, DEI, BLM “queers for Palestine”, “Chickens for Colonel Sanders” what ever the Libtard cause of the month - one learns to ignore this stuff.
I’m in the 5th ward of Chicago, the 2nd Congressional District - I trust the writers and the best commentators here to know what’s important, possible in City, Crook County, Illinois politics. Can someone in the know give me some advice on how to vote in the primaries coming up?
I got talked in to circulating petitions for a nice, honest local mom to get on the GOP ballot running for US Senate - thats Dick Durbin’s seat. She’s on the ballot but IMO she has around 0% of winning the primary, general election.
I don’t think there is even a GOP candidate for 2nd congressional US Congress and I might have 2 *#&$@Q sons of Jet-stream Jessie Jackson as US Congressmen from the 1st and 2nd Congressional districts which are both within a ten minute walk from me - talk about Gerrymandered districts!
I was/am tempted to take a Demorat ballot to vote against Toni P for Crook County Board Chairman, but the only adverts I’ve seen from her challenger was Woke, DEI *#$&#@ about ICE, hating Trump, hating MAGA trump supporters, being pro abortion. What do others think here?
I have no clue about voting for judges - do we ever get to vote against (my former Kenwood/Hyde Park) alderman Judge ("Let the brothers riot and loot”) Tim Evans. I think I read here or somewhere else that worst ever Chicago crime judge Tim Evans was being demoted, removed or something like that. Can anyone else here in the know, let me know?
Thank you sirs.
JR
Left behind in Chicago
sell midway airport
then Ohare
Barack Hussein O'bama (BHO) has come to his hometown's rescue, the home of his lie-barry once again from his permanent residence in Hawaii. BHO has arranged for pallets of cash to be flown by a non descript airplane in the middle of the night soon to arrive at Midway Airport. BHO bailed out Iran and the late Ayatollah Ali Khamenei with a planeload of cash valued at $400 million. BHO, who is the democrat messiah, can bail out Mayor Little Johnson and the Municipal Corporation, d.b.a. Chicago. It seems BHO has an affinity for oppressive authoritarian dictators at home and around the globe.
DONALD TRUMP (R), Presidential Nominee: Four hundred million in cash. It's being flown in an airplane to Iran. I wonder where that money really goes, by the way. Right? I wonder where it really goes. Well, it went to either in their pockets, which I actually think more so, or toward terrorism, probably a combination of both.
https://www.cbsnews.com/news/obama-administration-acknowledges-1-7-billion-transfer-to-iran-was-all-cash/
It’s always the same comments. “Fuck you, pay me”. “It’s state law”. “They’ll never file for bankruptcy they’ll have to open the books”. Never is a long fucking time and when these things come to fruition what will you do? There’s no fighting it. At 24% funded and decreasing it’s inevitable our pension won’t be around much longer. If you don’t have 20+ on yet get out while you can.
Sit down and clown and stop trying to scare people. Do your homework before spreading your disease.
You are correct. People should actually google what happened in Detroit instead of trying to freak people out.
Republic state vs Democratic state. Really? Florida is cheaper all the way around and no state income tax, victims have rights, they support their police, etc.
Do your homework before speaking clown.
"... only 60 cents out of every tax dollar goes towards providing services for current residents. " You fail to mention that 60 cents per dollar covers salaries and benefits for all the wonderful municipal employees! So really, very little actually goes for public services.
Died when they killed Kennedy
Any openings at Only Fans?
He was referring to his Ozempic stocks
The art institute artwork is in trusts that are untouchable by any claimant of City of Chicago Debt.
Nice try though.
All public pensions need to be capped at $100,000.00 for 30 years of work.
It's just the facts of life.
These taxes and "fees" are needed to buy the votes to get and stay in office.
They could have taken the tif funds and paid my retro and vsep ot flea lawsuit damages.
Unfortunately, the only way to have your vote count in the people's republic of cook county is to pull a Democrat ballot for the primary and vote for the lesser of all evils then vote Republican in the general election.
When thousands of worker bees were forced out of Detroit the writing was on Wall and Detroit effectively became a ward of the state of Michigan by the late 70s. The mystery is how long it took from then until formal bankruptcy in 2013.
What we have here in Chicago is a lack of entriprising Somalians!
How about a petition to “Audit Illinois Finances”? See where and to whom and for what our money went! Every city, every town, every expense! Find out exactly HOW MUCH is going WHERE! Put THAT on the primary ballot.
Oh make NO mistake - this city is headed towards municipal bankruptcy and follow in Detroit's footsteps exactly. Detroit has rebounded as well as possible and moving forward. Sorry, Chicago is still sliding further downhill. . . .
That was the best outcome they could ask for. However, that 3% cola Really helps, I've been retired 22 years and my pension has just about doubled. Without cola you can never keep up with the March of inflation.
Can I buy ohare and make it my own Lil private airfield ? Love the smell of jet fuel in the morning, reminds me of Tehran in the spring.
Makes sense. Can you or anyone else give me some tips of the lesser of evils in the Demorat Cook County primary? I’m getting sick in the stomach at the though of having two Jessie Jetstream Jackson being US Congressmen from the 1st and 2nd Congressional district that is a 10 minute walk from both districts where I live.
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