City of Chicago lawyers predict 'catastrophic outcome' if pension reform overturned

The Chicago Sun-Times reports Chicago is near broke:

Chicago faces a $300 million deficit in 2016 with shortfalls continuing “for the forseeable future” — even before piling on $20 billion in pension liabilities that have saddled the city with the “worst credit rating of any major city other than Detroit.”

And if state legislation that saved two of four city employee pension funds is overturned, a “catastrophic outcome” awaits retirees and Chicago taxpayers alike triggered by “further downgrades.”

Nobody’s talking about it in the race for mayor, thanks to Rahm Emanuel’s decision to postpone the day of reckoning until after the election. But that’s the dire portrait of city finances painted in the city’s friend-of-the court brief in the state pension case.

After putting the state case on a fast-track, the Illinois Supreme Court ruled this week that it won’t have time to hear any friend-of-the court briefs.

But the city’s filing nevertheless paints the bleakest and most accurate picture yet of the financial crisis that awaits the winner of the Feb. 24 mayoral election.

“The Chicago bill should survive, regardless of the outcome of this appeal. If it doesn’t, the city’s liabilities will increase by $2.5 million a day,” Corporation Counsel Stephen Patton wrote in the Jan. 12 filing.

In December 2008, we attempted to warn everyone.