Looming beyond Chicago Mayor Rahm Emanuel's somewhat unsurprising $6.97 billion budget proposed for 2014 is a pension system that is short by $19.5 billion and to which, starting in 2015, the city will be required to make far larger contributions, threatening to leave Chicago hundreds of millions of dollars in the red, the New York Times reported today. “There’s simply no way that we can cut or tax our way out of this crisis and still leave Chicago a good place to work and live,” Emanuel warned City Council members in his annual budget address, calling on state lawmakers to settle, at last, on an overhaul to the Illinois pension system, which is among the most underfinanced of state systems, as well as to Chicago’s. “Without balanced reform, meeting our current pension obligations would require us to nearly double the city’s property tax — a move that would send residents and businesses streaming out of Chicago.” As the nation’s cities have shown signs of making a modest recovery from the recession of 2008, some have also wrestled with the growing risks of pension liabilities, which threaten to pit promises made to city retirees against cutting municipal services or raising taxes. The four pension plans that affect the city of Chicago’s retirees were about 36 percent financed as of 2012, city documents show.
