As bad as the finances for the state of Illinois are, Chicago is probably 100 times worse. The state of Illinois at least had the good sense to elect Republican Bruce Rauner as governor.
Rauner can’t fix the state problems by himself, and he does face veto proof majorities in both houses of the state legislature, but at least he’s got a plan.
As we reported last week, the city of Chicago’s political situation could be poised to sink even further than it already has.
Mayor Rahm Emanuel couldn’t manage a clean victory in the Democratic primary and he faces a runoff election against Ald. Chuy Garcia.
Garcia has the support of the Chicago Teachers Unions and the support of the black mayoral candidate who came in third.
Chuy’s going to “attack waste, fraud, and abuse,” a politician’s phrase for we’re not going to cut any current programs.
The city of Chicago is on the verge of the fiscal freefall. Moody’s Investors Services downgraded the city to a bond rating of Baa2. That rating which Chicago just two steps above Junk Bonds. It raises the probability of an increase in in their borrowing costs on four current bonds $58 million.
Chicago’s biggest problem is that their pension funds are underfunded to the tune of at least $32 billion, eight times the city’s operating revenue. If the city of Chicago was a private business it would be insolvent, facing bankruptcy, and its officers would likely be facing prison time.
The real wildcard with this downgrade will be its impact on the mayoral election. Garcia will certainly stick a finger of blame in mayor Emanuel’s eye but there’s no reason to believe that Garcia will do anything to improve the situation. If anything, given his relationship with Chicago’s Teachers Unions Garcia will make the situation worse.
If the city of Chicago goes under, let’s hope it happens in the next eighteen months. It would be fitting for Barack Obama’s hometown to be forced into bankruptcy court during his presidency.
No Rest For Emanuel, Garcia As Chicago Mayoral Runoff Approaches
Cold-calling voters is how volunteers for Chicago Mayor Rahm Emanuel spent Saturday only getting a break when the mayor himself showed up to thank his volunteers and make a few calls of his own.
Sign up to get alerts from Joe!