City deficit to hit nearly $1 billion soon without pension reform

Chicago Sun Times –

Mayor Rahm Emanuel will not raise sales or property taxes to close a $338.7 million gap in next year’s budget but all bets are off in 2015, when the shortfall balloons to $1 billion without pension reform, a top mayoral aide said Wednesday.

In 2015, the city is required by state law to make a $600 million contribution to stabilize police and fire pension funds that now have assets to cover just 30.5 and 25 percent of their respective liabilities.

The mayor’s City Council floor leader has suggested that the Illinois General Assembly “relieve us of these artificial dates they’ve put on us and allow us to solve the pension problem over time.”

A seven-year “ramp up” was built into a tentative contract with police sergeants but roundly rejected by the rank-and-file.

But if Springfield refuses to lift the hammer hanging over the heads of Chicago taxpayers, next year’s $338.7 million shortfall will seem like the good old days.

The deficit will rise to $994.7 million in 2015 and $1.15 billion in 2016 without a painful mix of employee concessions and new revenues, according to the city’s annual financial analysis released Wednesday.

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