What can be done to fix the pension shortfall in Chicago and Illinois?
 

I figure the title of this thread is simple enough, even though a solution seemingly can't be figured out...or can it?? (Thoughtful, dramatic pause).
As much as this is such a massive issue, I seem to never hear about possible solutions which can help Chicago and Illinois at large, so let's brainstorm...

1.) Does the solution lie in increased contributions/less money coming out for retirees?

2.) Would a (new) State constitutional amendment provide a legal out for how to correct the issue?

3.) Should the City and State go under bankruptcy protection, similar to Detroit?

4.) Another solution? Going to the Supreme Court to argue for inversion or correction of current federal tax allocation? (see excellent explanations here: http://www.theatlantic.com/business/...takers/361668/)

5.) Something else?

6.) What have other states done (if anything) in similar situations? New York, California?

Since state government leaders have completely failed to provide an answer, what can we, as residents of this state do? We aren't COMPLETELY helpless..are we?

Let's chat...

Municipal bankruptcy

State bankruptcy. The first one ever due to our suicide pact constitution.

What happens if the state just lets the pension funds go bust? Can the courts mandate the State raise revenue to fulfill its contractual obligations? I suppose a default on its pension obligations would probably lead to a spike in borrowing costs, but it could be used as leverage in renegotiations with the Unions?

Also, the commercial real estate market in Chicago is still going gangbusters. It doesn't seem like a possible (ok, definite) spike in property taxes is scaring off buyers.

But why not propose an amendment to the state constitution, instead of solely succumbing to it's deleterious language? Maybe I'm not smart enough to understand the situation, but it seems that such an action isn't off the table...

The unions can then sue the state which leads to a huge legal battle which the state has to pay for.

That's what usually happens in bankruptcy but is often harder to achieve outside of bankruptcy.

Probably, but the spike in borrowing cost has consequences such as making it harder to develop real estate (which leads into the next paragraph).

But it will. Unless many of those buyers get subsidies for their developments. Of course it matters how high taxes go up and how much in subsidies the city and state are willing to give out (as well as how high borrowing costs get).


See, Detroit was kind of lucky in that it was already at rock bottom when it filed for bankruptcy; taxes were the highest they were allowed to go, city services had been trimmed to the bone, and just the overall economy of the city was nowhere near healthy. Some would say that Detroit should have filed for bankruptcy many years earlier than it did so that it could alleviate the financial problems sooner rather than adding on to it with unnecessary (and some illegal) loans. Now the city is getting better every week since coming out of bankruptcy in December.

Chicago on the other hand seems to be doing pretty good, if only it could be a little bit better than how it's currently doing. Even before Detroit's bankruptcy, Chicago had always been tremendously better off than Detroit. However, bankruptcy will drastically change all that and it would be very difficult for Chicago to maintain its current momentum if not outright decline during the bankruptcy process (which could last years).

Well in Chicago's case at least

It needs a new mayor that is a stooge for the teachers union

Preferably a Hispanic With no plans at all to fix any pension issues at all.

Someone thats going to reopen up 50 schools

Hire thousands of more policeman

And I have is gangbang son mediate truce with the gangs of Chicago
Someone that will stifle all new constructions on any museums in the park

So goodbye Obama library

good buy Lucas billion dollar gifts to the city

^ Well said - although that may belong in the 'Politics' thread...

I don't care what a judge says.

If you don't have the money to pay someone, you don't have the money to pay someone.

It's essentially off the table, the process of amendment is very very difficult. It has to be done through a constitutional convention that is even more vulnerable to politicking, and then requires a super majority. Plus, I don't think enough of the public understands the problem well enough to be in favor of measures that stiff the unions. This is still a union state, although it is less union-dominated than it used to be.

^^^ Bingo, a constitutional amendment is completely out of the cards. There is no way a constitutional convention will even be called let alone that a supposedly "anti-union" measure will be passed. Ultimately the unions are going to lose these absurd pension promises, but it won't be a referendum or a legislative measure, it will be a federal bankruptcy judge. I honestly see no way that the State can ever work its way out of this mess short of some kind of state-level bankruptcy.

Given that there's no precedent for a state to undergo bankruptcy, it'll be interesting to see how that turns out. And by interesting, I mean white-knuckle terror-inducing.

Assuming the Supreme Court invalidates the current pension fix, it still won't come to bankruptcy - it will be settled through a large tax hike. The only question is whether the Dems can get enough votes to override Rauner on raising taxes.

Looks like the answer is no.

http://capitolfax.com/2015/03/11/super-majorities-arent-all-powerful/


Madigan and the Dems only have 60.2% of the votes in the House, literally one vote over the 3/5ths threshold to override a veto. If even one Democrat votes against a hypothetical tax hike, it faces certain death from a Rauner veto. Whatever the big solution is, it will have to be bipartisan, which means embracing Rauner's proposed cuts at least partially.

Our taxes will go up.

Maybe there will be a terrible plague that kills off people over the age of 65

http://chicago.suntimes.com/politics...chicago-casino


Editorial: Chicago casino makes more sense than ever

Posted: 03/18/2015, 03:07pm | Sun-Times Editorial Board



Mayor Rahm Emanuel says he has a new plan for how to spend whatever money Chicago might get from a new casino. He would put every dime toward shoring up the city’s pension systems.

That makes good sense, though the mayor previously said all casino revenue should be earmarked for another worthy cause, building and modernizing schools. Chicago’s first priority has to be resolving the crisis of underfunded city and teacher pension funds.


EDITORIAL

This doesn’t really get Emanuel off the hook if he’s trying to avoid raising property taxes. He still has to figure out right now, for example, how to make a required $550 million payment next year into the police firefighter funds. But in a mayoral election in which candidates have trotted out all sorts of long-range partial solutions to Chicago’s revenue problem, such as a tax on commuters, a Chicago casino is the most sensible idea.

A workable blueprint for a Chicago casino — essentially the same as a proposal that never came to a vote last year — is pending in the state Legislature. It includes ethics safeguards demanded by former Gov. Pat Quinn, who had vetoed two earlier bills. The Legislature should pass it and Gov. Bruce Rauner should sign it.

...

For too long, Chicago has seen its gambling enthusiasts head out of town, particularly across the border into Indiana, pumping up revenues for other governments. That’s money that Chicago and Illinois need. Two years ago, state Sen. Terry Link, D-Waukegan, estimated expanded gambling could bring in an extra $269 million just for the state.

In February, state Rep. Bob Rita, D-Blue Island, introduced two casino bills. One would give Chicago a gambling behemoth. The other bill — the one modeled on last year’s bill —would allow five new casinos....



We’d be happy to see a Chicago-only casino bill get signed into law. But the broader bill is far more likely to pull enough votes. So be it. After 10 years of failed efforts to bring a casino to Chicago, it’s time Springfield delivered.