Wirepoints' Dabrowski: Pension reforms only way out from under Chicago's mountain of debt
Wirepoints' Ted Dabrowski believes a series of ordinances proposed by Chicago 19th Ward Ald. Matthew O’Shea as a way of paying down the city’s massive pension debt will only add to the problem in the long run.
“Many of us agree it’s a tax that will fail eventually because it’s a tax that will hurt us more than it will help us,” Dabrowski, president of the policy watchdog website, told Chicago City Wire. “All they're doing again is looking for more tax revenues, and they’ll need much more than what this will generate.”
O’Shea’s plan includes an increase to the real estate transfer tax on property values in excess of $1 million. All of the $14 million that some analysts have forecast would have been generated from the tax over a two-year period beginning in 2017 would be directed to the municipal pension funds. A second ordinance in the proposal would also require city officials to steer the revenue generated from the new 3-percent excise tax on legalized marijuana sales to the same pension fund.
With the city shouldering an overall budget deficit of at least $700 million and with a large chunk of it stemming from pension liabilities, Dabrowski argues the monies generated from both plans combined would barely scratch the surface in terms of addressing the bottom-line deficit.
“All they're doing is shooting themselves in the foot,” he said. “Really, what they should be talking about is pension reforms and [Chicago Mayor Lori] Lightfoot should be out there campaigning and in the bully pulpit demanding a constitutional amendment so she can reform pensions. If she keeps trying to tax her way out of this problem, it’s going to take even more people away from Illinois and there’s going to be an even greater burden placed on the shoulders of those that are still here.”