Government pensions are growing faster than revenue in the big cities
Chicago’s upcoming increase in pension payments has prompted the ratings companies to lower Chicago’s outlook as Chicago marches towards becoming the next Detroit.
Moody’s Investors Service dropped Chicago’s general obligation rating three notches to A3 with a negative outlook in July, while Fitch Ratings in June put the city’s AA-minus rating on review for a possible downgrade. S&P changed Chicago’s outlook from A-plus GO rating to negative. Their on their way to B ratings.
Chicago’s payment to pension retirement funds for police and fire will top $1 billion in FY2015 from $483.4 million in FY2014. By 2020, they will hit $1.25 billion.
They have a $100 billion unfunded pension liability.
Unless money falls from the heavens, the Illinois legislature will have to reform the pension system and tax the people more to survive. They can’t conceivably come up with the money down the road without dramatic reform unless an incredibly booming economy is on the horizon.
Rahm Emanuel is encouraging the legislature as he has been for years now. Guess what? It’s not working!
The liberal cities and towns give away the store to government unions even though it’s unsustainable. Unions will continue blaming the rich and the banks for their problems because they make great straw men. Democrats – liberals – will keep taking campaign contributions from unions in exchange for union giveaways until it all crashes and burns. They won’t reform. They will crash and burn.
Detroit is getting federal ‘loans.’ Bailouts are called ‘loans’ now. California is getting $40 million a month in ‘loans’ from the feds. Chicago will be next unless New York beats them to it.
Our system is crumbling from within. How the liberal cities go, so goes the nation.
Read more at Chicago Tribune