In his latest and last new budget message, Chicago Mayor Rahm Emanuel wants to assure us all is well. Not to worry. Things are in hand.
Except that not all is well. It’s just more of the same, which is to say it does little or nothing to solve Chicago’s structural and long-term budget problems. That’ll be Emanuel’s gift to ever is lucky (?) enough to succeed him.
Truth in Accounting “Bill’s Blog,” lays it on the line, challenging some of Emanuel’s main claims:
From 2011 to 2017, the city’s total reported liabilities doubled, largely because the city finally began including pension obligations on its balance sheet a couple years ago. Excluding pensions, however, Chicago’s total reported liabilities still rose significantly from 2011 to 2017, reflecting how the city was running up the credit cards on its residents, even while telling them they were ‘balancing the budget.’
It’s “interesting.” The new budget includes more than $800 million proposed for debt service. This includes interest on bonded debt. Last year, the City of Chicago incurred more than $720 million in interest expense—up more than $200 million from 2011. That’s a lot of dough, especially when it’s generated by borrowing to fill gaps in “balanced” budgets.
There are “no new taxes.” Writing in Crain’s Chicago Business, Greg Hinz’s summary was headlined “No tax hikes, two big holes in Emanuel’s final budget.” Hinz is careful to qualify that there are no new tax or fee hikes “beyond those that already have been approved.” The city is in the midst of implementing large-scale property tax and other revenue increases, and the ability and willingness of taxpayers to fork over this money will be tested in the years ahead.
Chicago is sliding into a sludge pond on a sled whose runners have been greased by irresponsible accounting, overly generous pensions, incompetence and corruption.
Why should anything be any different this time around?l