Chicago's perilous financial condition (Time: 2014, city hall, credit)

[chet everett]

Moody's Downgrades Chicago Bond Ratings Again | Sun-Times

Baa1 with a negative outlook

Moody’s noted that Chicago’s $32 billion unfunded pension liability is eight times operating revenue. That’s the “highest of any rated U.S. local government,” Absent a commitment to significantly increase revenue and/or materially restructure accrued pension liabilities and reduce costs, the city’s credit quality will likely weaken.”

[FAReastcoast]

Without a major pension reform, I see no way Chicago (and the stat) can recover from this financial mess.

[Chicago South Sider]

That's quite an accomplishment. Illinois has the worst credit in the country. Chicago has the second worst credit of any major city in the country. Chicago's best days are certainly behind it.

[Vlajos]

Originally Posted by FAReastcoast

Without a major pension reform, I see no way Chicago (and the stat) can recover from this financial mess.

The State has passed reform covering most of the state. It's highly unlikely that Madigan and Cullerton (both of Chicago) will not pass something to reform Chicago's pensions.

The question is will the courts uphold the reforms?

[Aleking]

It's pretty much a given that Chicago will fix its financial situation...a whole lot of lower/middle class people will just be screwed in the process.

[Chi-town Native]

Originally Posted by Aleking

It's pretty much a given that Chicago will fix its financial situation...a whole lot of lower/middle class people will just be screwed in the process.

That sounds about right.

[chet everett]

Originally Posted by Vlajos

The State has passed reform covering most of the state. It's highly unlikely that Madigan and Cullerton (both of Chicago) will not pass something to reform Chicago's pensions.

The question is will the courts uphold the reforms?

...those reforms will fall far short of a total solution to the crisis. “We expect that any cost savings of such reforms will not alleviate the need for substantial new revenue and fiscal adjustments in order to meet the city’s long-deferred pension funding needs,” Moody’s wrote. “We expect that the city’s pension contributions will continue to fall below those based on actuarial standards.

The phrase substantial new revenue is a polite way of sayings "taxes so high that people will storm city hall with dinette chairs and other dangerous items formerly used to hold their snow-shovel parking spots"...

[Aleking]

my taxes are low across the board

[oakparkdude]

I agree that the pension shortfall is a huge, if not, the biggest problem going forward that Chicago faces. Here's what I am truly confused about: If Chicago is going down the tubes, why is there so much construction and investment in the downtown area? Wouldn't the corporations and financial interests bankrolling this activity be more cognizant of the oncoming financial trainwreck than the general citizenry? Do the elites have their heads in the ground just as much as the plebes?

[marothisu]

Originally Posted by oakparkdude

I agree that the pension shortfall is a huge, if not, the biggest problem going forward that Chicago faces. Here's what I am truly confused about: If Chicago is going down the tubes, why is there so much construction and investment in the downtown area? Wouldn't the corporations and financial interests bankrolling this activity be more cognizant of the oncoming financial trainwreck than the general citizenry? Do the elites have their heads in the ground just as much as the plebes?

Because it's not going down the tubes per se, in most areas. People are still making money here and new people are moving to the city who make at least decent salaries per year. Again - tale of two cities. The pretty educated people on average are making a decent living in the least while the lower class is not and they are leaving to cities with a lower COL.