Pension Mess Poses New Test for Chicago Mayor Emanuel

Image: Pension Mess Poses New Test for Chicago Mayor Emanuel

Monday, 12 May 2014 08:15 AM

By Melissa Clyne

  Comment  |
   Contact  |
  Print  
|  A   A  
  Copy Shortlink
A looming pension crisis in Chicago is testing Windy City Democratic Mayor Rahm Emanuel, according to The Wall Street Journal.

The city’s crumbling pension system stands to make Chicago insolvent. In March, Moody’s Investors Service gave the city a "negative outlook" and downgraded its credit rating – following a triple downgrade in 2013 – landing it just three levels above junk bond status, according to the Chicago Tribune.

Chicago is now the lowest-rated major city in the country, with the exception of bankrupt Detroit, Crain's Chicago Business reported.

With just one-third of the amount needed to pay promised benefits to city workers, Emanuel is scrambling to find the money. His plan: Raise property taxes by $250 million and shrink retirement benefits for most city workers and retirees, according to the Journal.

Even with the tax increase, city workers would be asked to make sacrifices, such as paying more for their benefits, while retirees would see reduced cost-of-living increases.

The tax increase proposal does nothing to address a $600 million shortfall to fund police and firefighter pensions in 2016, which is required by state law. Negotiating with the unions for those groups is expected to be tough, the Journal reported.

During his campaign and throughout his term, Emanuel has touted his bravado, saying he’s not afraid to tackle tough issues.

"The voters did not elect me to think about my political future; they elected me to think about Chicago's future," he said in a statement to the Journal.

But his decisions as mayor have not resonated well with voters, according to the results of a Chicago Sun-Times poll published Saturday. Just 29 percent of likely voters said they would support Emanuel if the election was held today.

Illinois Gov. Pat Quinn, a fellow Democrat whose support is needed to make the plan happen, is not keen on Emanuel’s property tax hike proposal, telling the Chicago Tribune last month that he won’t support a tax gouge on property owners.

Emanuel has "got to come up with a much better comprehensive approach to deal with this issue," Quinn said.

According to The New York Times, by 2019, employees would be contributing 11 percent of their salaries to pensions – compared to the current 8.5 percent – while cost-of-living increases would drop or even be skipped in some years.

Emanuel’s popularity has tanked since routing political rivals with 55 percent of the vote in 2011, according to The Huffington Post. Last year, just 2 percent of Chicagoans strongly supported his job performance. Voters will go to the polls in February.

Related Stories:

© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Cosby Said He Blocked 2005 Tabloid Story about Sex-Assault Accuser

Friday, 28 Nov 2014 12:42 PM

Comedian Bill Cosby struck a deal with the National Enquirer in 2005 to give the tabloid an exclusive interview about a  . . .

Trailer Unveiled for New Star Wars Film: 'The Force Awakens'

Friday, 28 Nov 2014 11:02 AM

The first teaser for J.J. Abrams' Star Wars: The Force Awakens has hit the web.
There has been an awakening - ha . . .

Black Friday Is Country's Favorite Gun-Buying Day

Friday, 28 Nov 2014 10:47 AM

Consumers in the market for purchasing firearms are among the millions of people swarming the stores on Black Friday to  . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved