I'm sure similar stories could be written about any jurisdiction, but Chicago is different--residents pay the nation's highest sales tax--they don't get the best government money can buy. Greg Hinz explains in Crain's Chicago Business:Each Chicagoan now is on the hook for a whopping $5,821 in unfunded liability for pension promises to city and Cook County public employees.
That's according to a new report by the Civic Federation, the latest in a series of studies by watchdog groups that underline just how tardy local governments are in putting aside the funds needed to pay future pension bills.
According to the study of 10 funds -- including from the city, Cook County, Chicago Public Schools, the Metropolitan Water Reclamation District Chicago Park District and the Chicago Transit Authority -- the average fund had only 67.2% of the investments on hand at the end of fiscal 2008 that will be needed to pay retirement benefits.
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Fiscal experts generally recommend that funds maintain reserves sufficient to cover at least 90% of their potential liabilities.
Related posts:
More on the public sector pension crisis
Illinois is number one: In underfunded state employee pensions
The coming public employee pension bubble
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The truth is, if government bodies were required to follow the same rules as private business when it comes to accounting, we'd have a lot more politicians in jail, and a lot better handle on spending.
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