There’s more bad news for the city in its annual financial analysis released late Friday afternoon: Chicago will have to come up with at least $754 million more for next year’s budget, potentially hundreds of millions more if certain pension reforms aren’t enacted by Springfield. But incomplete data in the analysis may be covering much worse problems. The amounts break down as:
- $233M – operations deficit in Corporate Fund
- $100M – additional debt payment to end “scoop and toss”
- $93M – pension payments to labor, municipal, police and firefighter pensions
- $328M – additional payments to police and firefighter pensions
The total could go up another $221 million more if Senate Bill 777 is not enacted in Springfield, a change to Chicago’s police and firefighter pensions that pushes payments into the future–essentially switching from an 30-year to a 40-year mortgage.
The analysis, as has been done in the past, provides a tremendous amount of detail about the city’s Corporate Fund, where most the city’s operations spending is done, but much less detail about the Property Tax Fund, where most of the city’s pension payments and debt service are carried.
In past years this was not a big deal, since property tax revenue was more than enough to cover pensions and debts. But since this year’s budget problems are centered on pensions and debt payment, more detail in this area would answer some big questions. For instance, comparing last year’s financial analysis to this year’s, there’s a $712 million difference between 2015’s projected and actual general obligation bond debt that’s largely paid by property taxes. In other words, this past year Chicago borrowed $712 million more than originally anticipated.
Why that money was borrowed and what it was used for is an important question, since it sheds light on how well the city has been managing its existing debt load–and how manageable that debt load can remain under existing revenue plans.
This may seem like green eyeshade kind of stuff, but the numbers–pushing into billions–are so big they have the potential to overwhelm every other aspect of the city’s budget and programs.
The Mayor’s Office did not respond to our weekend requests for explanation.