Chicago: The City of Property Taxes and Pensions
Chicago is known as one of the most beautiful cities in the United States. Its skyline, stunning Lake Michigan, and diverse culture attract millions of visitors every year. However, behind the scenes, Chicago is also known for something else – the city’s property taxes and its pensions.
One chart tells you much about Chicago’s property tax and its pensions. This chart shows that Chicagoans carry a larger share of the property tax burden than people in any other major U.S. city. This is not surprising, given that the city’s property taxes have been steadily increasing over the years. In fact, between 2000 and 2021, property taxes in Chicago have doubled!
The spike in property taxes can be attributed to the city’s rampant pension problems. Chicago’s pension problem goes back decades, and now, the city’s finances are in dire straits. The city’s pension liabilities have been estimated to be around $42 billion, whereas the pension funds are only about 23% funded, according to a report by the Civic Federation. This means that the city has to struggle every year to meet its financial obligations, leading to an increase in taxes.
Chicago’s pension problem stems from a combination of factors, primarily the city’s history of underfunding the pensions, the increasing number of retirees, and the rising benefits promised to pensioners. This has led to a situation where today, over 20 cents of every dollar in property taxes goes to paying pensions. The pension problem is more pronounced in Chicago than in other major cities in the U.S. For instance, in New York, only 10 cents of every dollar in property taxes goes to pensions.
The problem is that the city’s finances are in a never-ending spiral. The more property taxes increase, the more people move out of the city. This means that property owners in Chicago have to bear an even larger share of the burden, leading to higher taxes. According to a report by the Illinois Policy Institute, Chicago lost over 50,000 residents between 2017 and 2018, the largest population decline of any metropolitan area in the U.S., proving that the city’s property tax and pension problem is serious.
But all is not lost. With a new mayor and a renewed interest in solving the city’s financial problems, there is hope that things will turn around. The city can take a cue from other major cities around the world that have dealt with similar pension problems. For instance, Dublin, a city like Chicago, had its own pension crisis in the 1990s. Economic growth and infrastructure investment helped to turn things around for Dublin, and the city’s pension system is now solvent.
Chicago’s city council needs to take a long-term approach to solving the city’s pension issues. This can be achieved by a mix of strategies such as increasing economic growth, investing in new infrastructure, attracting new businesses, and implementing pension reform. By taking these steps, the city can not only solve its pension problem, but also make Chicago a more attractive city for residents and visitors.
In conclusion, the property tax and pension problem in Chicago is not something that can be solved overnight. It has taken decades for the city to get to this point, and it will take time to turn things around. However, there is hope that with the right approach and strategies, Chicago can come out of this crisis stronger and more prosperous than ever before.
