The Municipal Government Debt Crisis
June 20, 2013 – The 518 taxing districts within Cook County have a combined “financial burden” of almost $34 billion - an average of $17,147 per Cook County household - according to a study released today by The Heartland Institute and Truth in
June 20, 2013 – The 518 taxing districts within Cook County have a combined “financial burden” of almost $34 billion - an average of $17,147 per Cook County household - according to a study released today by The Heartland Institute and Truth in Accounting (TIA).
Thirteen taxing districts in Cook County have a worse financial burden than Stockton, California, which is currently proceeding with bankruptcy.
Sheila Weinberg, founder and CEO of TIA and coauthor of the study, said, “This study is the first comprehensive analysis of Cook County’s taxing districts. It reveals how officials in many districts have been misrepresenting their financial conditions by telling citizens their budgets were ‘balanced,’ when in fact they have been accumulating an overwhelming amount of debt.”
Coauthor John Nothdurft, director of government relations for The Heartland Institute, warned, “The current fiscal state of many of the county’s municipalities is unsustainable, and citizens will continue to see more tax increases or municipal bankruptcies unless drastic pension and spending reforms are made.”
Weinberg and Nothdurft found:
- Unfunded pension liability for the Cook County taxing districts totals $31.07 billion
- Unfunded retirees’ health care benefits liability totals $7.18 billion
- Other debts and liabilities total $24.88 billion
- The total amount of bills stands at $63.13 billion
- Assets available to pay bills totals $29.41 billion
- The public’s financial burden (total bills minus assets) equals $33.72 billion
There are 1,966,356 households in Cook County. Simple division produces the following average per-household amounts:
- Unfunded pension liability, $15,799
- Unfunded retirees’ health care benefits liability, $3,651
- Other debt and liabilities, $12,655
- Total amount of bills, $32,105
- Assets available to pay bills, $14,957
- Financial burden (total bills minus assets), $17,147
In addition to the findings reported above, the analysis includes the following information:
- The five worst municipalities in Cook County according to this measure are the Village of McCook with a per-household financial burden of $316,671; Bedford Park at $259,320; Rosemont at $90,468; Hodgkins at $22,990; and Melrose Park at $19,352.
- The City of Chicago has the sixth highest per-household burden at $18,202.
- More than $27.1 billion worth of retirement liabilities are maintained off the county’s balance sheet.
- The financial burden created by the federal government is $574,042 per household, while the financial burden of the Illinois government is $32,905 per household.
- The total federal, state, and local financial burden on the average household in Cook County is a staggering $624,094.