Cook County is destroying wealth one tax increase at a time
Chicago, Cook County, and Illinois more generally are bankrupt. The progressives who run these governments have run them into the ground.
Cook County is raising property taxes to astronomical levels. This will surely force pensioners out of their homes, and renters to rethink their desire to locate in Cook County.
Chicago has a serious budget problem, and cannot fund even the most basic requirements.
Time for a dead pool: Date Chicago/Illinois total tax rate hits 100% . . .
But Chicago's problems are worse than this reflects.
Chicago understates pension funds by $11.5 billion, causing liabilities to jump by 168% . . .
While Chicago, and Cook County are running up taxes, and forcing taxpayers out of the city and county, they are also not paying into the pension fund for retirees. I expect every city, and every county in Illinois is in approximately the same boat. This is not a local problem, the pension fund crisis is nationwide.
Perhaps Illinois can help them over the hump?
Yes, next question!
Mon Deiu?! "A new report by the Civic Federation estimates that Illinois’ “unpaid bills” will triple to $22 billion in the next five years unless something can be done about the state’s pensions." Illinois is staring down a $22 billion unpaid bills shortfall?! Is this even possible? How?
Apparently it is, and for some reason vendors continue to provide goods and services on payment terms. How ridiculous is that?! They need to demand payment on the barrelhead prior to rendering any services, or providing any goods. Relying on a deadbeat like Illinois is how businesses go bankrupt.
Nor does there appear to be a solution to the problem.
5 things you need to know about the Illinois budget crisis
"Illinois is heading toward a second year without a state budget, putting some schools and colleges in jeopardy of closing and all but ensuring more social services and state programs will be cut amid a legislative standoff unlike anything the state has ever seen.
With the Legislature set to adjourn its spring session Tuesday night, Republican Gov. Bruce Rauner and majority Democrats remain deadlocked over a spending plan and business-friendly laws Rauner has made a condition of any budget deal."
The governor sees that reforms are necessary to rein in Illinois wildly excessive spending, reinvigorate the economy, and return the Illinois economic train to the tracks.
What do the Democrats want to do?
"The state already has gone almost a full fiscal year without a budget. Democrats on Tuesday could give final approval to a spending plan for the new fiscal year that begins July 1, but Rauner has said he'll veto it because the measure spends about $7 billion more than Illinois is expected to take in without addressing additional revenues. Rainer instead is making a last-ditch effort to pass a short-term spending bill and provide money for schools -- an idea he opposed and some Democrats were pushing just days ago."
Increase the deficit! The state is already one to two years out on paying bills, and there is no doubt that businesses cannot afford to hold accounts receivable for this long. At some point the state will burn through any remaining good will, and be left with cash only payments, then it will collapse.
Gov. Rauner is attempting to create the economic groundwork for a solution, the Democrats are busy ignoring the problem and playing the ignore, and spend game as all good progressives have done over the past decade.
The result is the beginnings of a sea change in Chicago, Cook County, and ultimately Illinois demographics.
Residents Abandoning Chicago: Is It Following in Detroit’s Footsteps?
The tide change in the Bay of Fundy also starts slow, but it builds and in the end the total amount of water exchanged is shockingly large with tidal runs of up to 80 feet. If the area does not control this, and quickly, this will continue to build pressure until there is a demographic "tidal rush" out of the city, out of the county, and out of the state.
While Portlandia has been leading the nation in disappointing Millennials in ability to afford a home, expect this mantle to shift more towards Chicago in the near future.
Boomer versus Millennial Wrestling World Smackdown, Portland is out ahead, but Seattle is running a close second!
The reason for the problem is different, in Portlandia, it is land use/growth boundary restrictions which limit developable land, and thus limit the supply of housing, which drives the price upward. In Chicago, it is simply rapidly growing property taxes, on one side of the equation, and rapidly growing income, and employment taxes on the other, which are making housing unaffordable.
It is impossible to believe the Democrats do not see or understand the problem, yet they refuse to take the necessary action to solve the problem. Ultimately the reason is that the problem is progressivism itself, its goals, and how it must be implemented. The top down authoritarian structure necessary to progressivism has caused these problems as we go through social, political, economic, and cultural changes. The progressive system also consistently applies the wrong solutions to the problems.
I do not know Gov. Rauner's political positions. He might well be a progressive Republican who has only a few reasonable free market solutions. If so, he will over the long term be little better than Madigan and the Democrats. However, there will be no solution until the parties take the rudimentary first steps to begin to resolve the crisis. Gov. Rauner's policies are a reasonable first step. The state must reduce its spending, and it must become more friendly to business, and relieve the pressure on taxes, especially property taxes, or it faces a demographic exodus from the state. These exoduses always result in the wealthy, and middle class leaving. Causing serious pressure on social services, and reduced taxes to handle the poverty cost surge.
Welcome to Detroit, er, Chicago, whatever! Enjoy your stay!