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…
As a follow-up to the Capital Planning Overview, this blog post summarizes information contained in the Civic Federation’s FY2014 budget analyses to compare how well the capital improvement plans (CIPs) of six major Chicago area governments conform to best practice guidelines. The governments are the City of Chicago, the Chicago Transit Authority (CTA), Cook County, the Cook County Forest Preserve District, the Chicago Park District and the Metropolitan Water Reclamation District (MWRD).…
The following posts were among the most highly read on the Civic Federation blog in 2013 and represent some of the most closely followed local government issues this year: City Council’s Proposed Independent Budget Office, A Civic Federation Recommendation January 2, 2013 This blog details a proposal introduced in the Chicago City Council on December 12, 2012 to create an Office of Independent Budget Analysis responsible for vetting all financial legislation before the Council. The Civic…
Last week the Civic Federation marked the end of the FY2014 budget season with a blog that summarized the proposed budgets for the eight local governments the Federation monitors. These governments include the City Colleges of Chicago, Chicago Public Schools (CPS), the City of Chicago, Cook County, the Chicago Transit Authority (CTA), the Forest Preserve District of Cook County, the Metropolitan Water Reclamation District of Greater Chicago (MWRD) and the Chicago Park District. This blog…
Last week marked the end of the FY2014 budget season for the eight local governments monitored by the Civic Federation. These governments are the City Colleges of Chicago, Chicago Public Schools (CPS), the City of Chicago, Cook County, the Chicago Transit Authority (CTA), the Forest Preserve District of Cook County, the Metropolitan Water Reclamation District of Greater Chicago (MWRD) and the Chicago Park District. Property Taxes Two of the seven governments that levy property taxes…
The Civic Federation supports the Chicago Transit Authority’s (CTA) proposed FY2014 operating budget of nearly $1.4 billion. After two years of difficult but necessary steps to stabilize its operations, the CTA has produced a balanced budget with no fare increases. The FY2014 budget reflects significant steps taken by the CTA in recent years to match ongoing expenses with recurring revenues and break its habit of relying on one-time revenue sources. The Federation commends the significant…
On October 25, 2013, Moody’s Investors Service downgraded the CTA’s bond rating to A1 from Aa3 and lowered its outlook to negative from stable. This makes it the seventh Chicago-area government or government agency to have been downgraded since July. In describing its concerns, the ratings agency cited the financial condition and recent credit rating downgrades of the City of Chicago, Cook County and the State of Illinois as placing negative pressure on the CTA’s financial position. Moody’s…
As part of its ongoing analysis of State and local government budgets, the Civic Federation also reviews proposed capital budgets along with any planning documents provided in support of infrastructure investments. Although many governments approve new and reappropriated capital spending on an annual basis, few public entities in Illinois have based these expenditures on comprehensive capital improvement plans (CIPs). Unlike the operating budgets, which mostly require that all appropriated…
Four large local government pension funds in the Chicago area reduced their expected investment rates of return for fiscal year 2012. While intended to make the funds’ actuarial assumptions more realistic, these decisions will also have the effect of increasing the funds’ liabilities and reducing their funded ratios. The State of Illinois’ five retirement funds also recently reduced their expected investment rates of return and the Chicago Teachers’ Pension Fund trustees voted last month to…
