Will Chicago follow Detroit into bankruptcy?
Liberals don’t know the meaning of a budget.
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Chicago, America’s third largest city, could follow Detroit into bankruptcy, warned Mayor Rahm Emanuel in the city’s “Annual Financial Analysis 2013” released last week.
“Until we pass meaningful pension reforms in Springfield, the outlook for future years is unsustainable,” Emanuel concluded bluntly, anticipating a current budget crisis that could develop into a full-fledged budget meltdown within the next four years.
Emanuel noted that Chicago’s current budget deficit of $338.7 million is expected to grow to $1.6 billion by 2016, due largely “to ballooning obligations under current pension legislation.”
Compounding the fact that pensions for public employees are less than 40 percent funded, a decline in business activity during several years of prolonged economic downturn and an exodus of higher income residents from the city have resulted until recently in a dramatic decline in Chicago’s tax revenue.
While Chicago has attempted to cut back on city services, including public school employment and police and firefighters, the city’s operating expenses are plagued by extremely high salaries, with 2,400 municipal employees earning six-figure salaries annually.