How much trouble is Chicago in? According to the New York Times front page this morning, this much trouble:
The pension fund for retired Chicago teachers stands at risk of collapse. The city’s four funds for other retired city workers are short by $19.5 billion. At least one of the funds is in peril of running out of money in less than a decade. And starting in 2015, the city will be required by the state to make far larger contributions to the funds, which could leave it hundreds of millions of dollars in the red—as much as it would cost to pay 4,300 police officers to patrol the streets for a year.“This is kind of the dark cloud that’s coming ever closer,” Mr. Emanuel said in a recent interview, adding that he had no intention of raising his city’s property taxes by as much as 150 percent—the price tag, he says, that it might take to pay such bills. “That’s unacceptable.” […]Among the nation’s five largest cities, Chicago has put aside the smallest portion of its looming pension obligations, according to a study issued this year by the Pew Charitable Trusts. Its plans were funded at 36 percent by the end of 2012, city documents say. Federal regulators would step in if a corporate pension fund sank to that level, but they have no authority over public pensions.
That 2015 mandatory increase? $1 billion.The fact that the Times is giving Chicago’s long-festering mess such prominent coverage this morning is a testament to how Detroit’s thunderous collapse has made all these sorts of previously over-the-horizon problems seem a lot closer and menacing. Also prominently featured in the article is the blue civil war simmering beneath the surface: public unions are squaring off against Mayor Rahm Emanuel, who has threatened to increase retirement ages and freeze inflation adjustments to union benefit plans in order to help cushion the impact of those approaching mandatory increases in the city’s outlays.The article’s best quote goes to another close Obama aide who’s running against Governor Pat Quinn in next year’s elections, William M. Daley: “Anyone who thinks that this is just a problem on paper, those are the same people who looked at Detroit 20 years ago and said, ‘Don’t worry about it, we can handle it.’” We’re glad to see that at least a couple of the cogs in Chicago’s long-ruling Democratic machine have awoken to the crisis at the city’s doorstep. Better late than never.The one unspoken question: can Obama stand idly by if his hometown starts going down the tubes on his watch?[Image of Chicago skyline courtesy of Shutterstock]