I've warned many times about the catastrophic state of many city and state pension funds. Particularly (but not only) in Democrat-controlled areas, many of them are underfunded, overdrawn, and not in a fit state to pay out the demands that will, according to actuarial calculations, be made upon them. I've predicted several times that efforts will be made to foist their pension debt onto the backs of all US taxpayers, in the form of a federal government bailout of insolvent pension funds. Back in May, I highlighted an underhanded attempt to use federal funds to bail out multiemployer (read: union) pension funds, and ultimately to write off their arrears. I'm sure there'll be more such attempts.
Now comes word that the new Mayor of Chicago is trying to shed her city's monumental pension debt onto the backs of state taxpayers. If she succeeds, I guarantee that the next step will be for the state to demand a federal government bailout, because it can't afford to pay its now-expanded pension obligations (not that it can afford those it has at present, anyway).
According to knowledgeable sources in Chicago and Springfield, after weeks of preliminary maneuvering the mayor is pitching nothing less than a state takeover of the city's cash-short pension funds, which under current law will require upward of $1 billion in new city tax hikes over the next three years to reach a path to full actuarial funding. Her proposal would consolidate city pension money with smaller downstate and suburban pension funds in a new statewide system. In some cases, those non-Chicago funds are even worse off than the city's.
Insiders say Chicago might be willing to forgo some revenue it now gets from the state in exchange for relinquishing responsibility for the funds, which now are about $28 billion short of the assets they'll eventually need to pay promised benefits. To pay the cost, Lightfoot reportedly supports state legislation to tax retirement income of better-off seniors—taxing income above $100,000 a year would net roughly $1 billion annually, according to the Civic Federation—or extending the sales tax to cover high-end services such as accounting and legal advice.
. . .
[Illinois Governor] Pritzker has been talking about pension fund consolidation, but in a different sense. The governor has a task force examining how much money could be saved by combining into one, more efficient fund hundreds of small funds, mostly for police and firefighters, that now are scattered across the state.
Lightfoot's move somewhat echoes what happened last year with Chicago Public Schools' pension fund. It still is separate from the state system that covers all other Illinois school districts, but now the state is picking up an increasing share of the cost.
. . .
Should the state pick up part or even all of those [pension] costs? "Yes," said [Chicago Civic Federation president Laurence] Msall, arguing that the state sets pension rules and has limited how the city and other communities can deal with the problem. "The state needs to help manage the financial liability."
There's more at the link.
This is typical of the tax-and-spend mentality. Squeeze all the taxes you can out of people; spend them all, and borrow even more when tax revenues are not enough; short-change pension funds of their annual required contributions so that you can spend the money you've "saved" on buying more votes and keeping your constituents happy; and then shuffle off the resulting debts onto someone else's shoulders, leaving you with a clean balance sheet (on the strength of which you can immediately borrow more money, and get into the same hole all over again).
In a just world, I'd look for every politician who does this to expire of an immediate heart attack (or, if I were less merciful, more slowly of some painful, loathsome disease). Chicago is only the bellwether for dozens of other major US cities who are in the same funding mess. They'll follow its example, sure as we're standing here; and their states will all try to shuffle off their fiscal shortfalls (caused by their own fiscal irresponsibility and mismanagement) onto the federal government. I hope and pray that President Trump, and Republican representatives and senators, will have the courage of their (alleged) convictions, and vote down and/or veto any and all such attempts; but sooner or later, we're going to have a change of administration - and who knows what the next president will do? Furthermore, if the Democratic Party ever gets a stranglehold on both the House and the Senate, you know full well they're going to pass such a bailout on the grounds of "It's for the chiiiiiilllldren!" or some such siren SJW song.
Chicago is probably beyond redemption by now. As I mentioned some time ago, its politicians exhibit incredible contempt for its residents. The latest property tax hikes have already sparked a wave of emigration . . . but those people will get less for their properties as a result of the higher taxes. Don't wait until it's too late. If you live in Illinois in general, and Chicago in particular, leave now, and take with you everything that you can. If you don't, it'll be sucked into the rapacious maw of the tax-and-spend politicians who govern you. I guarantee it. On the basis of their previous behavior, it's a certainty.