Short-term or current liabilities are financial obligations that must be satisfied within one year. They can include short-term debt, accounts payable, accrued payroll and other current liabilities. This blog post presents 12-year trends for 1) total short-term liabilities in the Governmental Funds and 2) short-term liabilities as a percentage of operating revenues for the three largest local governments the Civic Federation regularly monitors and evaluates: the City of Chicago, Cook County…
The Chicago Public Schools audited financial statements for fiscal year 2014 released last week indicate the deterioration of the District’s fiscal condition continued through the end of FY2014. The District’s most recent Comprehensive Annual Financial Report (CAFR) reports ending FY2014 with an operating funds deficit of $513 million, which it closed using fund balance. This deficit was smaller than the $642 million budget gap that was anticipated when the District released its FY2015…
The Civic Federation’s previous blog examined the long-term debt of eight major local governments in northeastern Illinois. This blog explores the unfunded pension liabilities of ten pension funds sponsored by local governments in the Chicago area using a per capita indicator based on unfunded pension liabilities. Between FY2004 and FY2013, pension obligations per capita for Chicagoans’ increased by 199.4%, rising from $4,305 to $12,889. For Chicago residents, the pension obligations per capita…
The Civic Federation regularly analyzes and comments on the budgets and audited financial statements of eight major local governments in northeastern Illinois: 1. City of Chicago; 2. Chicago Public Schools (CPS); 3. Cook County; 4. Chicago Transit Authority (CTA); 5. Forest Preserve District of Cook County (FPDCC); 6. City Colleges of Chicago; 7. Chicago Park District; and 8. Metropolitan Water Reclamation District (MWRD). As part of these analyses, we examine trends in these governments’…
The Civic Federation and IIFS blogs have written extensively about reductions to assumed rates of return on investment by State and some local public pension plans over the last several years. These changes are part of a nationwide trend, influenced partly by the low interest rate environment and by a larger debate over whether pension plans should use a risk-free rate of return to discount liabilities or the expected rate of return on investment, as used by most public pension plans. In…
The Cook County Clerk’s Office annually releases a tax rate report that provides the tax rates for various taxing agencies within Cook County. It is important for property taxpayers to have an accurate picture of which governments receive their property tax dollars and for what purpose so that taxpayers may hold public officials accountable for the level of taxation imposed. The largest portion of a Chicago property owner’s tax bill goes to the Chicago Public Schools, which accounts for 53.74…
Chicago-area public employee pension funding levels continued to decline in FY2012, with total unfunded liabilities for the ten funds analyzed rising to $37.2 billion from $32.0 billion in FY2011. On average, the ten funds analyzed had an actuarial funding level of 45.5% in FY2012, down from 74.5% in FY2003. For all pension funds supported by the taxes of Chicago residents, including statewide finds, the total unfunded liabilities reached $19,579 per Chicago resident in FY2012. The…
The most basic question about a pension fund is whether its assets are sufficient to cover total liabilities incurred. In this blog post, we examine the aggregate pension liabilities and Other Post Employment Benefit (OPEB) liabilities of ten large local government pension funds in the Chicago area and their collective assets.[1] Liabilities are calculated using actuarial assumptions about the value of all future pension payments for both current and retired employees, as well as any…
CPS is balancing its budget in FY2015 in large part by shifting the time period used to report revenues from 30 to 60 days. This will allow the District to access $648.0 million in revenues that it would not otherwise have been able to use. However, this is a one-time maneuver that cannot be repeated in FY2016. Governments report financial transactions for their governmental funds using the modified accrual method of accounting. This method allows revenues to be recorded when the organization…
The Civic Federation does not support Chicago Public Schools proposed $6.8 billion budget for FY2015. The short-sighted budget does nothing to address the District’s grave fiscal crisis and is balanced only by an accounting maneuver that allows the District to book more than 12 months of revenue into a single fiscal year. This one-time and non-recurring revenue will leave a gap in future budgets, contributing to deficits of over $1.0 billion in FY2016 and FY2017. CPS blames the State of…
