The total unfunded liabilities of the ten major Chicago-area public pension funds reached $18.5 billion in fiscal year 2008. That is an increase of over $15.1 billion dollars in ten years, up from $3.4 billion in fiscal year 1999. To put $18.5 billion in perspective, it is $5,821 of unfunded pension liabilities per Chicago resident. The debt grows to $10,037 per person when you add the State pension funds. The unfunded liability for the four City of Chicago pension funds alone is $…
As reported in the Civic Federation’s latest report on ten local government pension funds, the most recent audited financial statements of the Chicago firefighters’ pension fund showed a market value funded ratio of only 27.2%. The Chicago police fund was close behind at only 34.7%. What do these numbers mean? Funded ratio is the most basic indicator of pension fund status. It is the ratio of assets to liabilities and can be expressed using either the current market value of assets or…
This report analyzes basic financial data on ten major local government employee pension funds in Cook County. It is intended to provide lawmakers, pension trustees, pension fund members and taxpayers with the information they need to make informed decisions regarding public employee retirement benefits. The report reviews fiscal year 2008 actuarial valuation reports and financial statements of the retirement plans for the City of Chicago, Chicago Park District, Chicago Public Schools, Cook…
The redesign of the Civic Federation website in July has provided the public, government officials, and the media better access to the Federation’s analyses of government services in Illinois. The regularly-updated Civic Federation blog especially has provided a constant source of information on the issues that the Federation covers, including local budgets and pensions, taxes, privatization and asset leases, and commentary on events in the news. Blog posts about local government budgets…
The Civic Federation's legislative priorities for 2010 include public pension reform, requiring state government to develop and implement performance measurement and a capital improvement plan, the dissolving of the Illinois International Port District, creating a new governing board for the Cook County Forest Preserve District, reinstating means-tested transit discounts for seniors, requiring large counties to produce timely annual audits, enacting tax increment financing reporting reform,…
Under the old state statute that limited the property tax rates of the Chicago Public Schools, Tax Increment Financing directly restricted property tax revenues available to CPS because it froze part of the equalized assessed value (EAV)—the tax base—available for taxation.1 This rate limit statute still exists, but it no longer impacts the school district’s tax levy due to the introduction of the Property Tax Extension Limitation Law (PTELL, often called “tax caps”) in 1995, which limits…
Chicago Public Schools has received almost $400 million in Tax Increment Financing revenue from the creation of the first City of Chicago TIF in 1984 through July 2009 and is scheduled to receive over $491.3 million more according to intergovernmental agreements with the City of Chicago. CPS has used TIF funding to renovate or build elementary and high schools and is planning to use $14 million for ADA accessibility improvements to 15 schools. Approximately 45% of the $399.0 million received so…
The Civic Federation supports the $6.9 billion Chicago Public Schools FY2010 proposed budget. The District employed reasonable measures to balance its budget in light of a $473 million deficit, including cuts to personnel and a proposed drawing down of reserves. The Federation also supports the District’s modest 1.5% increase to its property tax levy. Going forward, the Federation has concerns about the District’s growing annual pension liabilities, which is a principle driver of its…
Today the Civic Federation released its analysis of Chicago Public Schools’ proposed FY2010 budget. On page 61 of the analysis we discuss the District’s dramatically escalating annual pension contribution costs. The District’s statutorily-required pension contribution was $177.8 million in FY2009. In FY2010 it will jump to $307.5 million, a one-year increase of $129.7 million or 72.9%. But this is just the beginning. The outlying years paint a grim picture for the District’s finances. In…
This report provides a trend analysis of indicators that measure the financial health and performance of ten major local government pension funds from 1998 to 2007, the most recent year for which audited data are available. It finds that unfunded liabilities for the ten funds climbed even during years of good investment returns, increasing from $4.8 to $17.1 billion in ten years, and makes numerous recommendations on legislative actions that should be taken to slow the downward spiral of…
