By: Mark Glennon*
The narrative over the whopping Chicago property tax increase is forming: Time to pay the piper for past sins. Pensions can’t be cut. $500 million of new property taxes along with a garbage collection fee are needed to pay the bill for them and other things. Bite the bullet and we’ll be on our way towards normalcy.
It’s a false narrative. Our article looked just at the city’s own numbers in its last financial statements, which nobody seems to read. It would take over 2.5 times that $500 million just to start making adequate payments to the pensions.
But that’s just using the city’s numbers, which still understate the problem badly. Interest alone on the unfunded liability exceeds the Annual Pension Cost the city claims in its financials. We’ll be writing more about the the real, real numbers soon. In the meantime, know that $500 million won’t solve much.
Taxpayers should demand an honest picture of the whole story before they’re asked to start paying more. They aren’t getting it. Even the best journalists get so much about pensions wrong. Yesterday, I was interviewed for the show Illinois Rising. I interrupted the Tribune’s Kristen McQueary (not too rudely, I hope) to correct her when she said that making the annually required pension payments satisfies what’s actuarially required. Not true. Not even close. It’s a myth propagated by politicians who claim to be acting responsibly. She’s among my favorite journalists and has been the most eloquent in begging Chicago for a serious response to its problems, but even she made that error. That show, by the way, airs Sunday at 3PM on AM 560.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.