Wednesday, October 28, 2015

Breaking News ... New Tax Increases in Chicago to Pay Teachers, Firefighters and the Police ... That Won't Be the End of It

There's breaking news concerning the ongoing Chicago financial debacle. It's contained in the story of Chicago City Council Passes Largest Tax Increase in City History.

The article is subtitled 'Property-tax increase would raise additional $543 Million phased in over four years:'

"CHICAGO—The Chicago City Council passed a historic tax increase Wednesday to shore up the pension systems for police officers and firefighters, aiming to stabilize the troubled finances of the nation’s third-largest city.

The property-tax increase, which has been described as the largest in modern history, would raise an additional $543 million phased in over four years. When fully in place, estimates show homeowners would see their total property tax bill rise by around 12% from current levels.

The property-tax rise was part of the larger Chicago city budget, which included additional revenue increases such as expanded trash fees and added taxi and ride-sharing fees. The spending plan pushed by Mayor Rahm Emanuel passed overwhelmingly.

“The city council today, and therefore the city of Chicago, acted with decisive and determined action of righting the financial ship,” Mr. Emanuel said. “For decades, these decisions have been deferred.”

The council vote was a victory for Mr. Emanuel who has faced a deteriorating fiscal picture here, including Moody’s Investors Service cutting Chicago’s credit rating to junk earlier this year. The mayor warned of deep layoffs in the police and fire departments and a rollback in city services including tree trimming and graffiti removal if the tax increase didn’t pass.

Even with the new revenue, Mr. Emanuel faces a series of challenges ahead. He needs help from state lawmakers and Gov. Bruce Rauner to phase in a sharp rise in payments due to the police and firefighter pension systems and an infusion of hundreds of millions in state dollars for city schools in the face of a projected shortfall. However, Illinois is nearing its fifth month without a budget and no agreement is emerging between Democratic legislative leaders and Mr. Rauner, a Republican."

Summing Up

The expensive Chicago saga continues.

As does the Illinois one as well.

For that matter, too many other cities, states and even our nation as a whole are in the same leaky boat.

That's my take.

Thanks. Bob.

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