ILLINOIS NEWS NETWORK
With Chicago’s $37 billion shortfall, mainly from unfunded pension obligations, each of the city’s taxpayers would be on the hook for more than $41,000 just so Chicago could break even.
Accordingly, the city received an “F” grade for its fiscal health in a new report from government finance watchdog Truth In Accounting.
“If everybody kindly sent a check to the city of Chicago for $40,000, we’d be back to even, but that’s not going to happen,” said TIA Research Director Bill Bergman.
Bergman notes each layer of government has growing debt for which taxpayers eventually will have to foot the bill.
“But guess what, you’re also a resident of Cook County and a resident of the state of Illinois,” Bergman said. “And not to get really depressing, but we’re also citizens of the United States of America.”
On top of the $41,700 per household in Chicago, TIA said Cook County government puts taxpayers on the hook for an additional $5,100 each. Don’t forget to add Illinois’ taxpayer burden, which TIA puts at more than $50,000. Add on the nation’s’ staggering taxpayer burden of more than $600,000, that’s a grand total of more than $696,000 per Chicago taxpayer.
State Sen. Kyle McCarter, R-Lebanon, said Chicago’s bad fiscal behavior is squeezing the rest of the state’s taxpayers as well. Lawmakers OK’d nearly half a billion dollars to bail out Chicago Public Schools this past summer, McCarter noted. And with a fiscal 2018 budget that Gov. Bruce Rauner says is $1.7 billion out of balance, the Chicago bailout makes up about a quarter of that deficit, McCarter said.Bergman said TIA’s review of Chicago’s debt didn’t include Chicago Public Schools, which has its own financial problems.
“Interestingly, the city of Chicago doesn’t include the Chicago Public Schools in its own financial statements,” Bergman said, even though the city operates the city’s public schools. “That’s a problem almost as bad as the city of Chicago itself, so that’s on top of the pile as well.”
McCarter said that Chicago’s debt affects all state taxpayers, not just Chicago’s.
“All of that financial irresponsibility comes back on to taxpayers as a whole on this state,” he said.
What happens if the huge amounts of long term debt isn’t addressed?
Bergman said people begin looking for greener pastures and less taxpayer burden. And it’s not just rich people that look to flee the city, “but poor people as well that have had taxes raised on them in ways that also haven’t reciprocated in the types of social service spending that have taken a hit from the city’s financial condition.”
Bergman said the high costs of the city’s pension and other debt crowds out spending on other services.
McCarter said taxpayers are fed up with all levels of governments living beyond their means.
“We’re tapped out to the point where we can’t just be making up for [government] mistakes whether they be in Chicago, whether they be in Springfield, or whether they be in municipalities or counties or townships,” McCarter said.
Bergman said TIA’s grade rating is better for taxpayers to understand than the bond ratings credit rating agencies issue to cities because the credit rating agencies information is meant for bond investors. Having a simple letter grade gives a more general picture to the taxpayer of the governmental unit’s health, Bergman said.
TIA is continuing to review data from different cities across the state. More information can be found on the finances for Chicago, Illinois and other units of government at TIA’s website.