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We were having a discussion about increasing taxes in the Chicago forum and I pointed out that places like Dallas, Houston, and Phoenix are very large cities, but don't have the high taxes and financial difficulties that Chicago has.
One member stated that Chicago is in a financial bind because the city is old and is reaching the point where things like roads, bridges, sewers, and utilities need repair, but the city is short on funds so increasing taxes is the only way to solve the issue. This member also stated that sunbelt cities will likely face the same financial difficulties in a few decades as things start to age.
While many things in Chicago do need renovating, the mismanagement of funds and overpromising of pensions is what I believe to be the primary cause of the financial issues in the city and across the state. I pointed out that Boston and NYC are much older than Chicago, yet haven't faced the same issues as Chicago. I also pointed out that because growth in Chicago has come to a crawl in the past decade or two, pensions were designed under the assumption that growth would continue as it had between 1900 and 1960.
Do you think cities like Dallas and Houston will run into financial difficulties in the future because they aren't collecting enough taxes currently?
We were having a discussion about increasing taxes in the Chicago forum and I pointed out that places like Dallas, Houston, and Phoenix are very large cities, but don't have the high taxes and financial difficulties that Chicago has.
One member stated that Chicago is in a financial bind because the city is old and is reaching the point where things like roads, bridges, sewers, and utilities need repair, but the city is short on funds so increasing taxes is the only way to solve the issue. This member also stated that sunbelt cities will likely face the same financial difficulties in a few decades as things start to age.
While many things in Chicago do need renovating, the mismanagement of funds and overpromising of pensions is what I believe to be the primary cause of the financial issues in the city and across the state. I pointed out that Boston and NYC are much older than Chicago, yet haven't faced the same issues as Chicago. I also pointed out that because growth in Chicago has come to a crawl in the past decade or two, pensions were designed under the assumption that growth would continue as it had between 1900 and 1960.
Do you think cities like Dallas and Houston will run into financial difficulties in the future because they aren't collecting enough taxes currently?
Chicago's population peaked at 3.8 million people and now has about 2.6million people. That's 1.2 million less bodies to tax in a system and infrastucture that was designed to be supported by 30% more people. If the Sunbelt cities continue their growth trajectories their tax bases will continue to grow and will not have the financial problems associated with stagnation. Chicago has a history of political corruption and mismanagement, as well as huge labor contracts maturing into huge legacy costs. Chicago has not adequately kept up with it's infrastructure maintenance, which theoretically would make the "old infrastructure" argument less potent had it been managed properly.
If high growth Sun Belt cities get mismanaged, start losing population, and make financial commitments they can't deliver in 40 years then yes. Otherwise it's an apples and oranges comparison.
For some reason I am under the impression that Chicago's main financial obstacles are tied to unfunded legacy liabilities (ie employee pensions ect.)
That's the main cause of the financial difficulties. Pensions were promised under the assumption that there would be a large taxpayer base to fund them.
Things like roads and bridges were mentioned because I pointed out that many of the roads in Chicago are filled with potholes.
That's the main cause of the financial difficulties. Pensions were promised under the assumption that there would be a large taxpayer base to fund them.
The main issue with public-sector pensions is not that the tax base isn't large enough to fund them. It's that it historically has been way too easy for elected officials to delay funding shortfalls to some indefinite point in the future, knowing that the eventual headache will not be dealt with while they are in office.
Chicago actually doesn't have an operational and structural problem for the most part. It can take care of its roads, sewers and infrastructure. Things are in generally good shape, although there are certainly some bridges and high profile things when you drive around that make you go "wow, they need to replace that".
Chicago's problems are almost entirely tied to the fact the former mayor took "pension holidays" for around a decade where they didn't put money into the pension systems because they said they would get stellar returns on their current investments of like 10% per year so the amount in their would grow to the amount you needed.
yeah. That didn't happen. Chicago's financial problems right now are directly tied to trying to play catch up on the pension fund deficits. Instead of paying out $200M per year for 10 years, now they're having to do stuff like force in $600M per year to catch up while still paying their regular bills.
The city WILL crawl out of it and be fine, drive around most of the city and it's perfectly fine or even growing like weeds. There are serious problems in around 1/3 of the city around the south side and west side that could turn into even worse structural problems and drags on the city. For now the booming downtown and north side have been able to "cover" the west and south sides in that regard.
The city peaked at 3.5 million and has 2.7 million, so it's lost almost 800,000 people, but if you look at age groups the people Chicago has lost over the years are mostly its children.
Chicago today actually has roughly the same number of adults living in it that it did at peak population, it just has FAR fewer kids. That doesn't impact the financial health of the city - as much as having more kids doesn't exactly bring financial gain directly to the city.
Chicago actually doesn't have an operational and structural problem for the most part. It can take care of its roads, sewers and infrastructure. Things are in generally good shape, although there are certainly some bridges and high profile things when you drive around that make you go "wow, they need to replace that".
Chicago's problems are almost entirely tied to the fact the former mayor took "pension holidays" for around a decade where they didn't put money into the pension systems because they said they would get stellar returns on their current investments of like 10% per year so the amount in their would grow to the amount you needed.
yeah. That didn't happen. Chicago's financial problems right now are directly tied to trying to play catch up on the pension fund deficits. Instead of paying out $200M per year for 10 years, now they're having to do stuff like force in $600M per year to catch up while still paying their regular bills.
The city WILL crawl out of it and be fine, drive around most of the city and it's perfectly fine or even growing like weeds. There are serious problems in around 1/3 of the city around the south side and west side that could turn into even worse structural problems and drags on the city. For now the booming downtown and north side have been able to "cover" the west and south sides in that regard.
The city peaked at 3.5 million and has 2.7 million, so it's lost almost 800,000 people, but if you look at age groups the people Chicago has lost over the years are mostly its children.
Chicago today actually has roughly the same number of adults living in it that it did at peak population, it just has FAR fewer kids. That doesn't impact the financial health of the city - as much as having more kids doesn't exactly bring financial gain directly to the city.
We were having a discussion about increasing taxes in the Chicago forum and I pointed out that places like Dallas, Houston, and Phoenix are very large cities, but don't have the high taxes and financial difficulties that Chicago has.
Do you think cities like Dallas and Houston will run into financial difficulties in the future because they aren't collecting enough taxes currently?
Houston certainly has financial and infrastructure issues already. Houston has a higher property tax rate than Chicago, and the mayor has just proposed a 9% hike to assist with Harvey recovery. City infrastructure is lacking that of major US cities, the state does the absolute minimal, the pension fund is hugely underfunded and has gone thru a major restructuring, layoffs are common in city government, and the city is still growing and must find ways of funding and dealing with that growth. There is an increasing fee structure also, above and beyond taxes including water fee, drainage fee, and most areas have HOA fees.
The city of Baltimore, MD, has a huge population of unproductive underclass on welfare, addicted to drugs, and barely literate. Many of the City services have to be funded either completely, or at least halfway, by Statewide revenue. These include:
the city public schools
the city prison
the light-rail system
the short, 20-mile subway system
the convention center
BWI airport
Orioles baseball stadum
Ravens football stadium
Residents of the panhandle of Western MD resent having to subsidize these services, and many want to secede and be a part of West Virginia.
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