Despite federal help, Chicago pension debt grows

[August 13, 2021]  By Andrew Hensel

(The Center Square) – After reportedly spending less and receiving support from the CARES Act and other federal grants, Chicago's overall financial debt increased during the pandemic.

The debt has increased to 38.7 billion dollars. According to a report by the Illinois Policy Institute, each Chicago taxpayer would need to write a check for $43,700 to pay all the city's bills. That amount increased by $2,600 per taxpayer from the previous fiscal year.

Adam Schuster, the senior budget and tax research director for the Illinois Policy Institute, said that Chicago's growing financial issues are related directly to the cities many different pensions.

"The pension debt held by the eight pension funds held in the city of Chicago is higher than the debt of 44 other states," he said.

The debt is split up mainly between the state's pension funds and retirement healthcare costs.

The nonprofit Truth in Accounting broke down the cities debt into what is owed in each different pension.
 

Bonds: $28,420,909,000

Other liabilities: $8,893,727,000

Minus Debt related to capital assets: -$23,602,202,000

Unfunded pension benefits :$32,958,252,000

Unfunded retiree health care benefits: $1,963,340,000
 

Total bills: $48,634,026,000

Schuster said that for Chicago to get control over its debts, the city needs to implement a reform that taxpayers get a vote on.

"There is no doubt that there are reasonable common-sense financial reforms Chicago can adopt to start digging out of this hole," Schuster said. "The problem is that politicians have not had the political courage and honesty to tell people what's needed and give people a chance to vote on it."

The city of Chicago's Office of Budget and Management, which prepares and implements the city's annual budget, did not return a request for comment.