This is the main issue seriously troubling my old friend, Charlie, in Chicago. He is 78, a lifelong resident there; I gave it up at 30, in 1972. "Chicago is in the throes of a New York-circa-1970s-style fiscal crisis, with a widening chasm between revenues and spending. Abetted by Illinois’ state government, the Windy City is adopting one of the borrowing tools that helped New York get its finances in order decades ago: a complex municipal bond, structured to protect investors in a possible bankruptcy. But unlike New York, Chicago and Illinois are using this invention to delay necessary budget reform—particularly to unaffordable retirement benefits for public-sector workers—instead of to enable it. Chicago has spent at least two decades digging itself into a massive financial hole. Back in 2000, the city had racked up $12.3 billion in debt, in current dollars; now, it owes $20.2 billion. Back then, the debt burden per person was roughly $4,400; these days, it’s $7,500. Even scarier is what Chicago owes to current and future pensioners: $31.5 billion, up from a $5 billion estimate in 2000. Last year, Chicago’s pension funds took in $900 million from the city and its employees and earned nearly $541 million in investment income, but the fund paid out more than $2 billion. Chicago actually has less money set aside in its pension funds today than it did a decade and a half ago. As of last December, the funds were less than 25 percent funded—perilously close to becoming another government expense (and a big one) instead of a pension system." https://www.city-journal.org/html/chicago’s-debt-dereliction-15497.html
Smaller towns in Illinois are facing certain bankruptcy as their smoke and mirrors financing shenanigans are catching up with them. You can only rob Peter to pay Paul for so long before the system falls apart. I'm born and raised, Chicago. We recently considered moving to smaller Illinois towns, from Austin, TX., to escape the deteriorating conditions, here. Unbelievably, the real estate taxes in these towns are sky high, some being almost double what I pay now. People are moving away from these towns because of worsening fiscal conditions, and the local governments are trying to stay afloat by sticking it to those who want to stay there or move in. Sorry, I'll pass!
Wasn't there a period of time where the state of Illinois was issuing I.O.U.s to lottery winners? They need a major transportation project to tap into Federal taxpayer dollars.
Isn't this happening pretty much all over the country? I don't grasp all the complexities but public sector retirement benefits are becoming too much for any city or state to afford. The problem looks like it will be solved by bankrupting the city or state. Then no more problem with pensions - except for the people getting the pensions. This may be too simplistic an analysis.