Chicago residents owe $43,100 each to settle city debt
A financial watchdog report estimated that every Chicago taxpayer would have to pay $43,100 to settle the city’s debt. It sits at No. 2 for major US cities. Blame city leaders for repeatedly worsening pension debt.
Chicago has the second highest debt from major US cities, forcing each city resident to pay $43,100, according to a new report from financial watchdog group Truth in Accounting.
The financial situation of cities 2022 to study found that the second city owed $38.7 billion in debt, largely due to underfunded pension obligations.
Only New York residents owe more: each taxpayer there pays $71,400. Washington, DC had the best financial situation among the major cities surveyed, with a surplus of $4,800 set aside for each resident.
The report found that despite federal COVID-19 relief grants and programs supporting city finances, Chicago was considered a “sinkhole city” by Truth in Accounting. Chicago received an “F” rating from financial watchdogs.
Of the 75 major US cities included in the study, 61 are classified as “sinkholes” with an estimated per capita debt of more than $20,000.
The authors gave Chicago an “F” grade because elected leaders repeatedly made financial decisions that failed to address the city’s growing debt burden, primarily due to pension commitments. unfunded. The city had set aside just 23 cents for every dollar of promised retirement benefits and no money for health care benefits promised to retirees at the start of the pandemic.
The report used annual data through June 30, 2020, before the federal government pumped billions into the city’s accounts. He said Chicago’s mounting obligations and poor fiscal health have left it unprepared to weather the COVID-19 pandemic.
Chicagoans don’t just owe $43,100. It’s just the town’s debt. They must add $57,000 they owe for the state’s nationwide pension crisis. Grand total: $100,100 for a city resident.
Much of the state’s debt stems from Illinois’ $236 billion public debt tied to Tier 1 employee benefits. They were promised a compound annual raise of 3% protected by the Illinois constitution. ‘State.
The fix for retirement debt in Chicago and Illinois is to amend the Illinois Constitution to allow changes to the rate of future unearned retirement benefits for government employees. The other solution is to write a check for $100,100.