Something stinks in Chicago: Water/sewer tax coming to bail out pensions

Abandoned home, Chicago's
South Side

Of course the more sensible approach for Barack Obama's former chief-of-staff would appeal to the state legislature to change Illinois law so municipalities can declare bankruptcy.

Emanuel's predecessor, Richard M. Daley, screwed taxpayers by making pension deals with the public-sector unions that are unaffordable.

Donald Trump is right--the system is rigged.

From the Chicago Sun-Times:

Mayor Rahm Emanuel on Wednesday put in place the final piece of the pension puzzle he was elected to solve but in a way that will impose another heavy burden on Chicago homeowners reeling from rising property taxes compounded by reassessments.

To generate the $239 million over five years needed to save Chicago's largest city employee pension fund, Emanuel wants to slap a new and quickly escalating "utility tax" on water and sewer bills over the next four years.

The plan is to start with a 7 percent tax, double it in year two, impose a 21 percent tax in year three and end at 28 percent in years four and five.

After that, the tax would rise annually to meet the "actuarially required contribution" to achieve a 90 percent funding ratio by 2057 for a Municipal Employees pension with $18.6 billion in unfunded liabilities that is due to run out of money in 2025.

It's likely that Rahm's revenue forecasters aren't accounting for a mass exodus of taxpayers who will throw up their hands and yell "enough" and move to the suburbs, Texas, or anyplace else as long as its not Chicago.

I've seen Chicago's future--it's called Detroit.

From my post at Da Tech Guy:

I walked its streets--the tragedy of Detroit.