Breitbart notes the troubles in the Windy City:
Chicago Mayor Rahm Emanuel Warns of Doubled Property Taxes to Fund Spiraling Pension Costs
by Warner Todd Huston 12 Mar 2014 1236
Illinois has one of the worst pension messes in the nation as the cost of government employee benefits is sending state, county, and local governments into bankruptcy crises all across the state. No place has more trouble than Chicago, prompting Mayor Rahm Emanuel to warn that property taxes will have to double to serve that spiraling debt.
In 2015 Chicago faces a looming financial disaster with a municipal pension system that is in worse shape than that of any other major U.S. city. Chicago is under the gun for a whopping $1.07 billion balloon payment on its $19.4 billion pension debt for city employees. Chicago’s mayor is struggling to figure out how to pay the balloon payment, which is equal to one third of the city’s entire budget. According to The Wall Street Journal, the balloon payment alone could pay for the salaries of the Chicago Police Department’s entire 4,300 officer force or for the re-paving of all 16,000 blocks of roads in the city.
More of the ugly details at the original. But I have to quote the last paragraph for you:
Meanwhile, the State of Illinois already comes in at second place in the number of citizens moving out of state. Outward migration for The Land of Lincoln ranked second only to New Jersey in 2013.
Naturally, there was this news, thatMoody’s downgraded Chicago’s credit rating, from A3 to Baa1, with anegative outlook putting it only three notches above junk-bond status. The Windy City now has the worst credit rating of any major city other than Detroit . . . and Detroit is in bankruptcy!
Of course, Mayor Emanuel knows the dirty little secret: property can be bought and sold, but it can’t move. People who want to flee yet another tax increase will have to sell their property to someone else, because they can’t take it with them. The tax increase will have eventual effects on property prices, as people will lower their offers for property because the increased taxes make it more expensive. Most people with jobs in Chicago won’t be able to leave their careers. And the poor, who are mostly renters, will be bamboozled into thinking that this isn’t a tax increase on them, but just their evil landlords, while the landlords will do what they have to do, and pass on the tax increases in what they charge for rent!
The Democrats have a one-track mind: raising taxes is their only solution! But raising taxes really doesn’t work all that well, as the higher tax areas are finding out . . . though the Democrats will never admit it. They get higher tax revenues now, but their future growth is inhibited, and they wind up with a poorer populace.