The difference between a pension fund’s assets and accrued liabilities is known as the unfunded liability. The unfunded actuarial accrued liability (UAAL) is calculated by subtracting the actuarial value of the assets from the actuarial accrued liability (AAL) of each fund. One of the functions of this indicator is to measure a fund’s ability to bring assets in line with liabilities. Healthy funds are ones that are able to reduce their unfunded liabilities over time while substantial and…
Public Act 98-0641, the City of Chicago’s pension reform bill, originally called for an increase in property taxes to help fund the Municipal Employees’ Annuity and Benefit Fund (MEABF) and the Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund (LABF) of Chicago. However, in response to a lack of support for the property tax provision of the bill, it was revised to remove the property tax language. As a result, the City of Chicago had to find an alternative source of revenue to…
The Civic Federation today released its annual estimate of the full value of real estate in Chicago and the Cook County suburbs. After the rate of decline in estimated property values slowed for the County as a whole in 2011, the rate of decline increased again in 2012. Tax year 2012 is the most recent year for which data are available. The 2012 estimate of the full value of property in Cook County was $414.4 billion, a decline of $28.4 billion or 6.4% from the 2011 estimated full value. The…
This report provides estimates of the total market value of real property in Cook County from 2003-2012 and shows how property value is spread among the City of Chicago, the northern and the southern suburbs. The full market value of real estate in Cook County was approximately $414.4 billion in tax assessment year 2012. This represents a decline of $28.4 billion or 6.4% from the 2011 estimated full value. The 2012 estimates represent the sixth consecutive year of decline for real estate…
This week the City of Chicago released its Annual Financial Analysis for 2014. According to an executive order issued by Mayor Rahm Emanuel on May 20, 2011, the Office of Budget and Management is mandated to produce a financial analysis of the City budget by July 31st of each year. The report includes: A financial condition analysis that covers the previous ten years, including a discussion of key factors impacting the performance of the City’s revenue streams; A three-year baseline…
A new report by Cook County Clerk David Orr released on July 16 finds that 68.2% or 103 of Chicago’s 151 tax increment financing (TIF) districts experienced revenue declines in 2013. Only 30 TIFs reported revenue increases, while 21 of the districts did not collect any revenues at all. Suburban Cook County TIF district revenues also decreased, falling by 2% from nearly $266.3 million to $260.9 million. The Clerk’s Office annual TIF report provides information about revenues collected for each…
Under Illinois law, the State is required to share a certain portion of state income tax receipts with municipal and county governments in Illinois through the Local Government Distributive Fund (LGDF). The state revenue shared with local governments is a legislatively required transfer from the General Fund to the Local Government Distributive Fund. The Illinois Comptroller then distributes the funds to the local governments based on population. Local governments are able to…
The City of Chicago currently has the lowest rated credit of any major city in the country according to Moody’s Investors Service. At Baa1, the long-term bond rating is still several levels above falling out of investment grade, but the City is at risk of having to pay large liabilities if it is downgraded again. According to an investigative report published by the Chicago Sun-Times, many of the derivative contracts in the City’s swaps portfolio associated with variable rate bonds have…
State statute governs all benefits and funding of public pensions for the City of Chicago. The City cannot contribute more to its pensions than the multiple of employee contributions allowed under state statute. There has unfortunately been some confusion in the media on this point ahead of a Monday, June 9th deadline for Governor Quinn to sign into law pension reforms for the City of Chicago’s Municipal and Laborers’ Funds. Eight local government pension funds in the Chicago area, including…
Chicago and Cook County residents who followed the pension debate at the State of Illinois might be surprised by the fact that proposals for pension reform for the City of Chicago and Cook County and pension reform legislation enacted for the Chicago Park District all require increases to employer contributions. This is in direct contrast to an Illinois process that focused on evaluating how much various proposals would save the State in contributions immediately and over time. Why won’t the…
