By: Mark Glennon*
Crain’s Chicago Business’ editorial board today endorsed Rahm’s budget proposal under the headline, “Chicago’s road to reality paved with pain and politics.” Chicago is finally dealing with reality, they say. “The city of Chicago no longer can afford to put off the inevitable—it must cover its obligations” to pensions, they say. “We must pay. The time to reckon with that reality is now.” Their only concerns about Rahm’s proposal are the burden it puts on commercial property owners and the omission of further spending cuts, though they offered no suggestions on that. Springfield should authorize the elements of Rahm’s plan where legislation is needed, Crain’s says.
It’s genuinely difficult to imagine what Crain’s is thinking. Rahm’s budget speech was, objectively and demonstrably, massively dishonest. It was the most dishonest speech given by a major American officeholder in memory. We listed some of the obvious falsehoods and distortions in our own story about it.
Has Crain’s considered fact checking what Rahm says? Are they unable to?
The legislation Crain’s wants implemented includes Rahm’s request to defer pension contributions — to postpone a contribution schedule that, even as it stands, would cover just a fraction of true pension costs. “Reality” evidently includes can-kicking for Crain’s.
Chicago’s pensions will not, in fact, be paid as promised, because they cannot be. As actuary Mary Pat Campbell wrote, “It’s just reality that neither Chicago nor Illinois will be able to tax people enough to get the pensions fully paid.” Cuts to pension benefits are essential in any real road to recovery. I defy Crain’s or anybody else to put up any combination of tax increases and spending cuts for Chicago and its overlapping municipalities that would genuinely fix the crisis and adequately fund pensions absent cuts to pension benefits. It cannot be done.
Media incompetence helped get us into this mess. Media incompetence is helping delay the needed response. Higher taxes would be needed as part of a real solution, but cheering for higher taxes to go into an unreformed pit that can’t be filled is madness.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.