A place to congregate, visit and discuss the issues impacting our community.
Monday, January 03, 2011
Just In Time For Tax Time
The North Coast published a report from Bloomberg suggesting that Chicago was on a financial precipice. We are going to just squeak through Fiscal Year 2011. I suspect the landscape will morph again in view of this report.
I don't know how much of an impact this law will immediately have on our taxes, but it will have an impact.
Under the law Quinn signed yesterday, the city’s combined annual contribution for police and firefighter pensions will rise from a projected $309 million in 2015 to about $856 million over the next 25 years, according to the city. The law, which applies to all public-safety workers in Illinois, is meant to protect their retirement benefits by requiring municipalities to boost funding of the plans that cover them, Quinn said.
The legislation requires Chicago to fund its public-safety pensions at 90 percent of projected obligations within 25 years.
I fully expect we'll see increases in pension contributions by the future recipients, which will not be well received by many. Like it or not, the rest of the state's citizens are not looking to foot Chicago's bills in an era of fiscal pain. Add to this the ongoing challenge of just paying Chicago's current day-to-day operations and we are likely going to see some sort of tax increase, coupled with a reduction in city services and/or cuts in city employees. This stuff isn't free.
Chicago faces a huge challenge in maintaining its vibrancy, vitality, and economic stability even without the task of paying its own way on pensions. I hope the police and fire employees realize we are all in this together. We are all going to feel some pain about this.