Chicagoans should pay close attention to a new warning from Moody's Investors Service: The city must solve the crisis devouring its public employee pension funds, but even if it does, there's extremely rough going ahead, according to a Chicago Tribune editorial today. "In our opinion, the pursuit of bankruptcy is not on the near-term horizon for Chicago," Moody's offered on Friday in an eight-page note. "If Chicago's pension funds continue toward insolvency, however, our opinion may change." Moody's frames Chicago's financial future as a dilemma that confronts Mayor Rahm Emanuel and the City Council with "tough choices now or tougher choices later." Moody's cites two current state laws that require City Hall to put much bigger amounts into pension funds, although a pending Illinois Supreme Court ruling could undercut one of those laws. If the laws stand, though, the good news is that Chicago would be replenishing the funds. The bad news: Doing that would savage the city budget, according to the editorial. On the current schedules, payments into pension funds will top $1.1 billion in 2016, a jump of 135 percent from this year, Moody's calculates. Ten years later, in 2026, payments total $1.9 billion, quadruple the 2015 amount.
