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

Share:
  Comment  |
   Contact Us  |
  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.

Share:
  Comment  |
   Contact Us  |
  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:
Retype 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

Google Working on Super-fast 'Quantum' Computer Chip

Tuesday, 02 Sep 2014 22:08 PM

Google on Tuesday said it is working on a super-fast quantum computer chip as part a vision to one day have machines t . . .

US, European Lawmakers to Discuss NSA, World Hotspots in DC

Tuesday, 02 Sep 2014 21:48 PM

Members of Congress and European parliaments will discuss international "hotspots" such as Iraq, Ukraine and Gaza, as we . . .

Pipeline Foes Condemn Neb. Congressman's Mock Playlist

Tuesday, 02 Sep 2014 19:28 PM

Nebraska Congressman Lee Terry is duking it out with oil pipeline fighters again, this time over a mock playlist Terry's . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

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