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发帖数: 6339 | 1 Posted: Dec 09, 2013 4:57 PM CST Updated: Dec 09, 2013 5:01 PM CST
CHICAGO (Associated Press) -
By SARA BURNETT
Associated Press
It's not the vision of a world class city that Chicago Mayor Rahm Emanuel
typically likes to portray.
More teachers losing their jobs, thousands fewer police and firefighters on
duty, less frequent trash collection and miles of potholed roads going
unrepaired -- all as property taxes soar.
But that's the scenario Emanuel and others have said could befall the nation
's third-largest city if the state Legislature -- which passed a landmark
measure last week to address Illinois' severe public pension shortfall --
doesn't deal with Chicago's own multibillion-dollar pension problem.
The economic capital of Illinois and the Midwest, Chicago holds the dubious
distinction of having the worst-funded public pension system of any major U.
S. city. It's a crisis that's putting in peril Chicago's reputation as "the
city that works," and its vision of being a modern transportation hub in the
midst of a high-tech boom.
"Chicago sticks out for all the wrong reasons," said Rachel Barkley, a
municipal credit analyst at Morningstar Inc., referring to a public pension
system that is only 35 percent funded, compared to New York's 60 percent and
San Francisco's 88 per cent.
It's raising the question: which version of itself will Chicago become?
Just raising taxes, which could cause businesses to leave, or cutting
services, which would penalize residents, won't be enough, said Michael
Pagano, dean of the College of Urban Planning and Public Affairs at the
University of Illinois at Chicago.
"I don't think either one is even a possibility," he said. "Everybody's
going to have to give something."
Chicago's pension funds for city workers, police officers and firefighters
are about $19.5 billion short of what's needed to meet its current
obligations.
The shortfall amounts to about $7,100 per Chicago resident. That's nearly
eight times the per person cost of the unfunded pension liability in Detroit
, a city that saw its population plummet in the years before it went into
bankruptcy earlier this year. Add in the unfunded liability for Chicago
teacher pensions, and the total shortfall jumps to about $27 billion.
City officials say the shortfall is due largely to investment losses during
recent economic downturns, to workers and retirees living longer and to
increases in benefits. The city's annual contributions to the funds, set by
state statute, also were well below what was necessary for meeting its
obligations, according to a Morningstar analysis.
Under state statute, those contributions are now scheduled to more than
double next year, to about $1.07 billion. Emanuel, a former White House
chief of staff who is up for re-election in 2015, says the increase is about
equal to the annual cost of having 4,300 police officers on the beat or
resurfacing 16,000 city blocks.
If the city doesn't cut services and pension benefits aren't changed, he
says, the annual payment would require a 150 percent hike in property taxes
-- an increase he calls "unacceptable." Chicago Public Schools' payment to
the pension fund for Chicago teachers also is slated to increase next year,
from $196 million last year to $600 million.
Emanuel wants the Legislature, which must approve any changes to pension
benefits, to raise the retirement age and cut cost-of-living increases, as
it did for the state pension system.
"The pension crisis is not truly solved until relief is brought to Chicago
and all of the other local governments across our state that are standing on
the brink of a fiscal cliff because of our pension liabilities," he said
after lawmakers approved the state changes last week.
Senate President John Cullerton, a Chicago Democrat, said he wants to take
up the issue "as soon as we can when we come back next year." Lawmakers are
next scheduled to meet at the Capitol in Springfield in late January.
Jesse Sharkey, vice president of the Chicago Teachers Union, said the union
fully expects a bill that will solve the problem "on the backs of working
people."
He warned the Legislature should prepare for protests on the scale of those
in Wisconsin in 2011, when thousands of union members camped out in the
state Capitol to protest Republican Gov. Scott Walker's attempts to
effectively end collective bargaining for most state workers.
"There's no way this attack isn't coming, and we're gearing up for it,"
Sharkey said.
Emanuel isn't backing down either.
He says reducing the city's and the Chicago Public Schools' payments to the
pension funds is particularly critical for the school system, which closed
dozens of schools this fall, in part because of budget problems.
"I don't want the cost as it relates to pensions to crowd out the future of
the city of Chicago, which is our children," he told a group of executives
during a recent Bloomberg Business Summit.
Read more: http://www.myfoxchicago.com/story/24175722/pension-crisis-endangers-chicagos-future#ixzz2n1sBZSiw |
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