In Chicago, Rahm Emanuel finds a typically Democratic solution to his pension fund problems

With all the trouble that Rahm Emanuel has been having in Chicago lately, specifically with unrest surrounding his police department and other scandals, it’s easy to forget that he’s dealing with another serious problem: his city is nearly bankrupt. As with so many other large, Democrat run municipalities, the chief culprit here is the massively underfunded pension system for municipal workers. Their unions negotiated some real sweetheart deals for them over the years, but the costs were completely unsustainable. When the city began to go broke, no real compromise was ever offered by the unions so Rahm is left to find some way to shore up the funds.

No problem, kids! Hizzoner will simply jack up the utility rates and let the taxpayers foot the bill even more. (Chicago Tribune)

Mayor Rahm Emanuel will propose a new utility tax on Chicagoans’ water and sewer bills in an effort to shore up the largest of the city’s ailing pension funds, according to multiple sources who were briefed on the plan Wednesday.

Under Emanuel’s plan, the tax would be phased in over the next four years, with the average homeowners’ bill increasing $50 each year until it reaches $200 in the fourth year, said Ald. Ameya Pawar, 47th, who was briefed on the plan Wednesday morning. The average Chicago homeowner’s water and sewer bill is $114.30, billed every other month, city officials have said.

You may be wondering why he didn’t simply increase property taxes to cover the pension funds. The answer is that he’s already raised them considerably and his elected officials in the city are getting nervous about being run out of town on a rail if they keep increasing the burden in that fashion. But for middle and lower income residents of an already poverty ridden city, jacking up their water bill by 200 dollars may be a bit much to swallow as well.

What makes this even more of a stereotypical Democrat move is the distinctly non-progressive nature of this plan. At least when you increase the property taxes the wealthy tend to pay a bit more. (I believe Democrats refer to that as “their fair share.”) But the utility bills tend to hit everyone pretty much equally, so the city’s poorest residents will feel the pinch the most. In the end, that’s how these things always seem to work. But more than anything else, this should have been a wake-up call similar to what we thought might happen in Detroit when they were dealing with the same issues. The era of massive pension plans for unionized government workers has led to a case of killing the goose that lays the golden eggs. But rather than acknowledging this reality, the unions just continue to push back, demanding every penny they can soak out of the system until it collapses under its own weight.

But hey… you just keep on electing those Democrats, guys. I’m sure it will all work out wonderfully in the end.

Rahm Emanuel

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David Strom 6:01 AM on June 06, 2023