-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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I’m sure Richie really doesn’t give a crap, hanging out with his six figure pension.
You may argue whether it was the right thing for the city to do in 2008 but in my mind what isn’t arguable is the price the city received for the contract. If you do the math the group invested $1.157 billion and has earned $1.97 billion in revenue. That’s about a 6% annual return before expenses. A nice investment but not a great investment. To put that into perspective, the S&P 500 increased at an annual rate of over 11% per year over the same time period. If the investment group had put the money in an S&P 500… Read more »
The investment group likely pumped that revenue into higher earning assets and made returns much more than the revenue that came in the door from meters. They own the meters for another 58 years, which likely require minimal investment, maintenance or upgrades. It still seems to be a very good deal for the purchaser. What is especially irritating is that Illinois would have squandered that money even if they would have kept the operations of the meters which is probably why you aren’t hearing much about it on local media.
I calculate around 10%. I found a number in 2019, where they made $138.7M or 12%, gross. Not sure how much maintenance and enforcement officers cost.
In hindsight, this may not have been a bad deal for the city as their management of the system, or lack thereof, was only pulling in $23.8M annually.
Chicago pols not only misallocate public funds when they buy goods & services; they squander a public asset when they sell!
It would be interesting to do a family tree of the Daley family and see if any of them are connected to the investment group that bought the parking meters. Somebody got an envelope somewhere.
Mayor Daley the 2nd sold them to balance the budget. Another dumb mayoral move
And Daley #2 picked up nice 6 figure salary with the law firm that negotiated the deal as well as his Chief of Staff getting a nice highly paid executive position with the parking meter company. Everything run by the democrats is above board, legit and transparent. Now that’s funny.
Hmmmmm….I’ve got to question the math. 2023 revenue of $160.9 Billion with total income on the deal of $1.97 billion? Im thinking there is a million/billion typo here.
Inumeracy is endemic to Dem run jurisdictions for ages.
” In 2023, the meters generated a record $160.9 billion in income,” I have to assume this statement is in error. It makes me wonder if anyone ever proofreads articles anymore before they’re published. I’m guessing not. This isn’t a Wirepoints issue as you guys just published the article as it was written.
I know. From the very few times I parked in downtown Chicago when we lived in Silly-nois,I knew it was expensive, but generating BILLIONS of dollars?!?!?
You are correct. It cannot possibly be $160 billion in one year. That must be the estimate for the full term of the 75 year lease.
I think they meant millions instead of billions so when they ran the article through spell check everything can back fine. That’s why editors need to proofread articles. I wasn’t the only one who noticed this error.
Attempting to equate the huge sellout of taxpayers by the Democrats to poor personal financial decisions? One affects all the taxpayers of the city and state for 75 years, while the other can be quickly cured by personal bankruptcy. Tribune whitewashing of totally irresponsible and unacceptable behavior by these political clowns. However, one can infer that (municipal) bankruptcy could also be the answer to end this parking travesty. But the Democrats won’t do it because it could impact their financiers union pensions.
Another Stupid deal made by stupid public sector to rip-off the stupid taxpayer that allows this kind of stupid stuff year after year. Chicago and Illinois is run by thieves.
Richie sold out the city and then simply faded away. He was never held accountable and never mentioned in the local media. There’re just fond memories of the city before the spiral – which he’s to blame for – began.
but older city public sec folks LOVED Richie D because he’s really the one who started handing out giant contract raises….all while skipping the pension payments
His tearing up Megs Field and bulldozing Soldiers Field before the seats were cold following a playoff elimination courtesy of the PHI Eagles showed a lot of people how he did business.