Is Chicago Going Bankrupt? (Detroit, Time: real estate, 2015, unemployment)

[sbking]

I would like more details on the financial unpinning of life in Chicago.

[chet everett]

The crisis is largely due to decisions to forego required pensions payments at the City and state levels -- Why Illinois is Going Bankrupt | TIME.com

Articles: How Democrats Pillaged Chicago Toward Bankruptcy

Chicago’s 2015 debt service and annual pension costs amount to 45% of its 2013 revenues.

The Chicago Public Schools have the authority to issue their own bonds and theirs are also at the post-crisis stage.

A city qualifies for bankruptcy when it does not have the revenues to pay its bills. Chicago has qualified for bankruptcy for about 15 years.

Currently the City of Chicago admits to having $26.8 billion of unfunded pension liability. Since there are almost exactly one million households in the city, each household owes the city $26,800 dollars to fund their pensions.

[TheSunshineKid]

Just raise the taxes. Boom. We all good.

/sarc

[Antonio Montana]

Originally Posted by sbking

I would like more details on the financial unpinning of life in Chicago.

Chicago is a strange case in many ways. Its downtown is booming, and real estate in the affluent neighborhoods is doing pretty well also. However, make no mistake about it. Chicago's finances are in horrible shape, along with the entire state of Illinois. As long as there is no resolution to the pension issue, Illinois's finances will continue to be this way. The same applies to the city of Chicago. I've read from numerous sources that the recent tax hike will still not be enough to resolve Chicago's financial woes.

As long as things continue this way, expect more and more of the middle class and middle class jobs to continue leaving both Chicago and Illinois. Notice I'm emphasizing middle class jobs. The very rich will have no problem getting jobs and making money.....and through special tax breaks, Chicago has got some companies to move their headquarters to downtown Chicago. it's just that there is, for the most part, and will only be the very rich and the very poor in Chicago. The middle class in Chicago is shrinking significantly. Unless there is significant change, Chicago will continue to be a tale two cities: 2/3rd Detroit and 1/3rd San Francisco. Note that I'm not saying Chicago will become Detroit. I'm saying that part of it is Detroit. Take a tour of neighborhoods such as Englewood and the west side and see if you don't agree with me.

It's quite sad, actually. Part of me hated to leave and I miss several parts of it....but for my financial well-being and future, I had to leave Chicago and Illinois behind.

[Antonio Montana]

Originally Posted by chet everett

The crisis is largely due to decisions to forego required pensions payments at the City and state levels -- Why Illinois is Going Bankrupt | TIME.com

Articles: How Democrats Pillaged Chicago Toward Bankruptcy

Be careful. You'll be accused of making this a "political discussion".

[Fighting Fungus]

Originally Posted by chet everett

The crisis is largely due to decisions to forego required pensions payments at the City and state levels -- Why Illinois is Going Bankrupt | TIME.com

Articles: How Democrats Pillaged Chicago Toward Bankruptcy

How about cook county suburbs? Are they in as bad shape as Chicago?

Can't they reduce pensions 5-10% and give new hires a 401k plan?

[Antonio Montana]

Originally Posted by Fighting Fungus

How about cook county suburbs? Are they in as bad shape as Chicago?

Can't they reduce pensions 5-10% and give new hires a 401k plan?

Pensions all over Illinois are in bad shape, and to answer your question specifically, yes, this would include cook county suburbs.

Your solution is a good one and makes sense. However, unless the politicians in springfield grow some balls, it won't happen.

[marothisu]

Illinois as a state is in bad shape for this. Life for many people in Chicago is better than it was 6 years ago. For others, may not as true. Unemployment is way down in the last 2 years for the city so that's good, and there's a lot of activity for some neighborhoods in real estate, construction, and business. Not felt all over the city. It hasn't deterred companies from opening jobs in the city yet either - there's still been announcements of companies moving to the city or opening new jobs. We'll see how it all plays out though.

[lycos679]

Originally Posted by Antonio Montana

Pensions all over Illinois are in bad shape, and to answer your question specifically, yes, this would include cook county suburbs.

Your solution is a good one and makes sense. However, unless the politicians in springfield grow some balls, it won't happen.

The constitution would need to be changed to cut the pensions though.

[Antonio Montana]

Originally Posted by marothisu

Illinois as a state is in bad shape for this. Life for many people in Chicago is better than it was 6 years ago. For others, may not as true. Unemployment is way down in the last 2 years for the city so that's good, and there's a lot of activity for some neighborhoods in real estate, construction, and business. Not felt all over the city. It hasn't deterred companies from opening jobs in the city yet either - there's still been announcements of companies moving to the city or opening new jobs. We'll see how it all plays out though.

I agree with this assessment and think it's pretty accurate. I would add the caveat that of the companies that have moved in, several have done so due to special tax breaks, which one could argue come at the expense of the little guy.

It would be best for Chicago and Illinois if they were places that had a naturally healthy business climate for both businesses and workers....and didn't have to engage in what could be argued to be bribery for companies to come there. Rauner letting Quin's ridiculous tax increase expire is a start....but there's still plenty of work to do.