Former Mayor Richard J. Daley named Chicago The City That Works. It didn’t work then and it sure doesn’t work now. It’s another Democratic city on life support but Rahm Emanuel has a partial solution – massive tax increases.
The Chicago Sun-Times reported that Rahm Emanuel is planning to raise property taxes by $500 million for police and fire pensions. That’s a 60% increase in property tax levies and there is more – from fat taxes to garbage collection fees.
Chicago’s unsustainable debt is the direct result of Democratic politics. The politicians allow union pay and benefits to go up without the money to pay for it and they do it to get votes. They have a patronage system of hiring Democrat supporters for over-paid municipal jobs. Chicago also has municipal debt which they use to finance more spending and terminate past muni-bonds.
All the debt is unsustainable.
Rahm is going to impose a garbage collection fee to generate another $100 million.
He’s going to tax e-cigarettes and other smokeless tobacco products that will cost about $7.17 per pack, not because it makes sense but because he can.
He’s going to tax Uber et al a $1 a ride surcharge. It’s supposedly going to level the playing field with taxicabs. Great excuse, huh? It’s the government and they are here to help.
Sugary soft drinks will be taxed a penny-an-ounce and will be known as the “fat tax.” They’re really looking out for everyone who might be tempted to have a second glass of soda but now can’t afford it. Of course Rahm can afford it so what does he care.
Emanuel has a $30 billion pension crisis and his city’s bond rating is junk status.
Rahm needs $754 million in revenue and that doesn’t count the $9.5 billion pension crisis at the Chicago Public Schools.
That’s the failing Chicago Public Schools.
• Four out of 10 CPS freshmen don’t graduate.
• 91 percent of CPS graduates must take remedial courses in college because they do not know how to do basic math and other schoolwork.
• Only 26 percent of CPS high school students are college-ready, according to results from ACT subject-matter tests.
They issue their own bonds and pay nothing towards their pensions since their raucous strike.
Oh, and there is going to be a separate $50 million levy for school construction and old debts.
There is more. If the teachers agree to a 7% pay cut, he will raise property taxes an additional $170 million for the schools.
Don’t worry, the mayor and his crew say the homeowners haven’t been paying enough.
Chicagoans were warned this would happen if Rahm was re-elected but their other option was a Communist.
He’s also considering a parking ticket amnesty for red-light cameras and speed cameras. The scofflaws would pay reduced fines but it would bring in immediate cash.
The Chicago Tribune said they are not worried about bankruptcy because they are not as bad as Detroit.
They are however, prone to constantly repeating the mistakes that brought them to this place. When Chicago’s bond rating was reduced to junk status earlier this year, they borrowed another $1.1 billion.
Chicago has $26.8 billion in unfunded liabilities. More than two-thirds of the residents are minorities and most are on government subsidies. Chicago’s four city-run pension funds have a combined $20 billion shortfall, nearly six times larger than the city’s annual operating budget. Six other pension funds dedicated to the workers of Chicago’s sister governments and Cook County are about 50% funded.
Chicago is the slowest growing major city in the United States. Chicago isn’t as run down as Detroit and hasn’t lost 60% of its population but it has unsustainable debt and a dysfunctional Democratic government. The Chicago Tribune shouldn’t be too over-confident. It’s on life support.