The Chicago Sun-Times reports:
Mayor Rahm Emanuel’s risky and erroneous assumption that Gov. Bruce Rauner would sign legislation giving the city 15 more years to ramp up to a 90 percent funding level for police and fire pensions cost beleaguered Chicago taxpayers $1.38 million, City Hall disclosed Friday.
That’s how much it cost the city to use $220 million in “short-term bridge” financing to make a state-mandated payment to police and fire pension funds that was higher than his tax-laden 2016 budget assumed.
The mayor’s assumption turned out to be dead wrong.
For months, Democratic legislative leaders held the police and fire pension bill in a cat-and-mouse game to prevent the governor from holding it hostage. That forced Emanuel to use $220 million in “short-term bridge financing” to make a state-mandated payment to police and fire pension funds due with the city treasurer in March.
When they finally sent the already-approved bill to the governor’s desk as the spring legislative session was drawing to a close, Chicago’s worst fears were realized.
Instead of signing the bill or doing nothing and letting it take effect automatically, Rauner vetoed the legislation, infuriating his old friend, the mayor.
The governor justified that veto by claiming it merely “kicked the can down the road” by allowing the city to borrow $843 million from the two funds at an interest rate of 7.75 percent, saddling taxpayers with an additional, $18.6 billion burden.
Chicago is even a bigger fraud than you imagined:
Based on current actuarial assumptions, Moody’s estimated that the unfunded liabilities of both plans will “now increase for almost 20 years, growing $3.3 billion over their reported year-end 2014 values.”
“If plan investment returns do not meet return assumptions, the risk of greater cost growth increases,” Moody’s said.
The report noted that 2015 investment returns for all four of city’s pension funds “ranged from -1.5 percent to +1.8 percent.” That’s “far below assumed returns” of 7.5 to 8 percent.”
Why are Democrat party run big cities such cesspools of accounting fraud? Why? No word yet on this story from Barack Obama of Chicago Democrat party fame.
