Illinois Municipal Pension Crisis

The Chicago Sun-Times reports:

City and county governments owe their retirees almost $48 billion in retirement benefits.

But the amounts employees and those governments are paying into those plans are falling woefully short of what must be paid out -- a $15 billion deficit and growing.

Now, the Civic Federation is warning in a report to be released today, taxpayers might soon be holding the bill for the benefits owed to government retirees.

"These benefits must be paid, so taxpayers will be on the hook unless something is done to reform how these plans are funded," said the Civic Federation's Laurence Msall. "It's a very disquieting situation for local governments."

The group analyzed pension benefit plans at the City of Chicago, Chicago Park District, Chicago Public Schools, Cook County, the Cook County Forest Preserve District, Metropolitan Water Reclamation District and the Chicago Transit Authority.

It found the CTA pension fund has only 39 percent of the total it needs -- far less than the recommended 90 percent, Msall said.

He said any "drop below 70 percent is a very dangerous area," but nearly all of those governments are below 90 and closer to 70 percent.

All this from a rather high tax area.Maybe paying people huge pensions after they stop working for government is an unaffordable situtation.In Illinois,the state constitution,prevents cuts in government pensions.Illinois could sell land.As we've said before do you really believe the numbers Chicago is giving to Moody's to get a bond rating? Enron couldn't get away with kinky books forever.