Chicago’s Debt Bomb

A Friend of McHenry County Blog points me to the Wall Street Journal’s take on Chicago’s solvency:

Chicago Will Need a Miracle to Escape Its Debt Burden

The city got a pandemic lifeline from the feds and did nothing to shore up its finances for the long term.

From the article:

[Chicago] has the second-worst debt load of any large city in America—about $43,000 per taxpayer, or almost $40 billion in total…residents also have to deal with Illinois’s particularly high debts, which total $42,000 per taxpayer. Thus, a family moving to Chicago suddenly inherits about $85,000 in liabilities. By this measure, Chicago has by far the worst debt burden of any major city…

Chicago’s combined city and state taxes would eat up more than 12% of a U.S. median family’s income. Chicago’s taxation is also brutal on businesses. Chicago’s tax on industrial properties is nearly double the average of other cities. The property tax on office buildings, at more than 4% a year, is by far the worst of any major city and more than twice the average.

Downtown Chicago’s office vacancy rate recently hit 25.1%, a record high…[They] assets for only about 25% of its pension obligations and nothing set aside for healthcare…

[T] he Chicago School District, the Chicago Park District, Cook County, and obscure bodies like the Forest Reserve District and the Metropolitan Water Reclamation District…add another 50% to the local debt facing Chicago taxpayers…

In September 2023, Mayor Johnson’s office projected a $538 million budget hole for the next year, almost three times what the previous mayor had expected, and a potential $1 billion deficit for 2025.

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Commentary from the Friend:
“Insolvency is not possible because Chicago is a home rule city and therefore has the legal authority to raise unlimited property taxes, and the legal obligation to do so.  The detrimental effect on the City’s economy is irrelevant to bankruptcy law.

“If you add up the numbers, it comes to about $145,000 in state and local debt per taxpayer.

“In the past three years, 40% to 44% of all local budgets went to the “fixed costs” of bond interest charges and pensions.”


Comments

Chicago’s Debt Bomb — 4 Comments

  1. Chicago Will Need a Miracle to Escape Its Debt Burden – total bullshit.

    No, it won’t.

    As is always the DEMOCRAT way, the DEMOCRATS will just raise taxes, fees and fines.

    Problem solved.

  2. More white and asian taxpayers need fleecing to support the parasitic classes.

    It’s very simple: income redistribution from the productive to the degenerate.

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