By: Mark Glennon*
A new study by the Center for State and Local Government Excellence looks at city unfunded pension liabilities under new governmental accounting standards. Some cities, unlike Chicago, participate in state-wide pension “cost-sharing” plans. The new standards require each city to include its shared liability in such plans, which increases their reported liability. This new study reflects those changes and measures unfunded liability as a percentage of each city’s revenue.
Despite those negative adjustments for other cities, Chicago is worst of 173 cities measured. Its unfunded pension liabilities are 359% of its revenues The 173-city average is 86%. Below, from the study, are the 20 worst of the 173 cities.
Another way to think of it would be that it would take all of Chicago’s revenue for 3.59 years to bring the pensions even.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.
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.
I specifically meant “Pension Contribution” money from the state. If it’s not specific pens money, then it’s just part of their pot of money to spend and we know that goes to higher pay for teachers and administrators. Pension-specific money, not much.
I thought CPS hardly receives anything from the state, no ? According to a study by the IL GOP a couple of years ago, Chicago receives about $600M more than their fair share of state educational funding via block grants: http://www.senategop.state.il.us/Portals/0/Docs/Cost-Shift-FINAL.pdf?timestamp=1409174250732 This is the deal Daley struck back in the 90’s and was, coincidentally, around the time in which Daley started taking pension holidays and started dolling out TIFs like they were going out of style (thereby shrinking the tax base). For a truly comical read, check out thisChicago Public Schools — A New Start article from 20 years ago:… Read more »
Nixit, being as smart as you are, it’s about time you questioned something I wrote. You are right — I have not gotten to the bottom of net-net funding inequity there is in CPS money from the state. There were dueling editorials recently from Cullerton and Rodagno, neither one of which is reliable. This is one of those things with an objective, honest answer that Rauner or somebody ought to be out front on. Wish we had a media that would nail both sides down to an agreed answer.
Mark, GOOD GOD !! Isn’t that Unfunded of $19B, NOT counting the CPSchools unfunded of another $10B ? Because that would make 29B Unfunded and Payroll of Munic, Laborers, Fire&Police and CPS for the 175,000 ‘ees is $5.5B. So basically the unfunded is 5.3 YEARS OF PAYROLL.
And paying/contributing just interest on the unfunded which is necessary to pay but NOT HELPFUL to reduce the problem. is… $2.25B…..40% of Payroll.
I’d say it’s GAME OVER. The car will go off the cliff in 4-10 years.
Steve- Exactly right. $19B is just the 4 city pensions. Add CPS, CTA, MWRD, Park District, Cook County…. They have separate funding sources, but still….
I thought CPS hardly receives anything from the state, no ? So almost entirely from ChicagoLand property taxes. If so , then the $10B undunded in CPS is also a local responsibility. Error in my Active ‘ee participant count It is NOT 175,000 govt ‘ees in those plans, that counts retirees. Govt ‘ees including CPS, total 80,000 and their Payroll is $5.5B. Again, tho, just interest on the $29B Unfunded at their 7.75% interest rate to determine Acc’d Liability……is $2.25B / year……which is basically required to be contributed in cash to the plans but does NO GOOD except prevent the… Read more »