Cook County local government debt hits $139 billion
Cook County governments have now amassed $139 billion in debt, a 30 percent increase over the last 5 years.
The city of Chicago alone – not including sister governments such as Chicago Public Schools – accounts for nearly $69 billion of the total debt.
This news comes at a time when the city of Chicago is being praised for receiving a AAA rating on $3 billion in sales tax bonds, a reckless deal that minimizes risk for investors at the expense of those reliant on government services.
In 2009, the Cook County Board of Commissioners passed, at the request of Treasurer Maria Pappas, an ordinance that requires her office to collect and release financial information for all taxing districts in the county. This report includes all debts and liabilities, including unfunded pension liabilities.
Unfortunately, increased borrowing by local governments hasn’t addressed the growing pension crisis. In fact, unfunded liabilities for Chicago’s pension funds continue to grow. As of 2016, the city of Chicago has more than $36 billion in unfunded pension liabilities, with just 21 cents on hand for every dollar needed to pay out future benefits.
In order to make up these huge deficits, local governments ultimately lean on taxpayers, while borrowing billions that will weigh on the shoulders of future generations.
One such solution is sitting right under their noses – 401(k)-style retirement plans for new workers. A standalone 401(k)-style retirement plan for state university workers has been operating successfully in Illinois for nearly two decades, with more than 20,000 members. This can help ease the pain of growing unfunded liabilities.
Until local governments get serious about addressing the fiscal problems they face, taxpayers will be on the hook for out-of-control borrowing.