Saturday, April 16, 2016

#Chicago and #Illinois Heading To Bankrupcy #Pension Crisis

Anyone that lives, transacts, or does business or around Midwest knows Chicago and Illinois are in serious financial trouble. The Illinois Supreme Court, citing Constitutional protections against reducing promised pension benefits, dealt a blow to the state's attempts to control its ballooning public pension debt by striking down a 2014 law that increased taxpayer-fueled contributions, cut benefits, and required larger contributions in order to reduce large deficits in two of Chicago's employee pension accounts. The city's estimates that liability in funds would grow $900 million per year target the municipal fund and laborers' fund for insolvency by 2026 and 2029, respectively.  These dates, likely based on relatively stable economic growth assumptions, are likely to be pushed forward by a severe liquidation. The Economic Activity Composite (EAC), a leading measure of economic activity within the United States and tool that times and defines the business cycle, favors the onset of liquidation in 2016 or 2017.

Illinois response will be higher taxes. When that's not enough, taxes will be raised again. Neighborhoods decay will be picked up by Google Street View.

Headline: Chicago’s Plan to Overhaul City Pensions Dashed by Top Court

Chicago’s plan to ease its $20 billion public-worker pension deficit was ruled illegal by the Illinois Supreme Court, a decision that the city warned may lead to the funds’ running out of money and worsen its financial strains.

The Chicago plan, passed in 2014, violates the Illinois Constitution, which bars the diminishing of public pensions, the court said Thursday. The finding upholds a lower court decision from July and follows a similar ruling by the Illinois Supreme Court last May preventing changes to the state’s pension funds.



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