Chicago Mayor Lori Lightfoot is grappling to find ways to combat rising pension costs, and close the city’s $838 million budget gap. Her strategies for reducing Chicago’s public pension debt – the highest in any major U.S. city – include increasing taxes on real estate sales and casinos.
“In an effort to shore up Chicago’s finances, former Mayor Rahm Emanuel, a former congressman and White House chief of staff who served eight years, raised property taxes and also helped attract new investment and construction to the city’s downtown. But decades of paltry contributions to the city’s four pension funds have left Chicago $30 billion short of what it needs by the city’s own estimates…”
Chicago’s pension costs go up annually, and Mayor Lightfoot “must find $1.7 billion for pensions, up from $1.3 billion last year, according to the city’s 2020 budget forecast. Total spending by the corporate fund, which pays the city’s general operating costs—aside from pensions and debt, is $3.8 billion this year.”
“Ms. Lightfoot must also contend with the teachers’ strike, going on since Thursday over pay, class size and other issues. The school district, which is run by a mayor-appointed board, sets its own budget and levies property taxes that are in addition to the taxes levied by the city on the same properties, and are subject to a state cap. Ms. Lightfoot has more latitude to raise property taxes and has made clear she may do so.”
This article quotes selections from “Chicago’s New Mayor Grapples With Nation’s Worst Pension Debt” by Heather Gillers in The Wall Street Journal, October 22, 2019. Read the whole article here.