The Chicago Mayoral race is underway. This is an important election for Chicago and Illinois.
Therefore, every voter must be “fiscally educated” before entering the voting booth.
I was recently interviewed by ABC Chicago 7 on the race. Here is my recap.
The city’s budgets have not been truly balanced. Chicago would need $38.2 billion to pay the bills it has already accumulated. This includes $33.7 billion of pension debt.
Each taxpayer’s share is $41,900. This represents the amount each taxpayer will have to pay to cover bills past Councils and Mayors have not included in prior budgets, but the future taxpayers who will not receive any services for these taxes.
Chicago’s budget is routinely balanced by recording loan proceeds as revenue.
The retirement plans’ credit card bill is $33.7 billion. This would be like you having someone paint your house today and telling them your kids will pay the bill after they move out of the house.
In 2023 the city paid only 45 percent of the minimum payment as calculated by the city actuaries. To balance the budget would require contributing another $1 billion to the city’s pension plans.
There is some good news when looking at what the mayoral candidates say about the budget.
Brandon Johnson says he would “present the people of Chicago an honest, transparent budget. No more tricks, no more kicks of the can down the road, no more hiding the ball.” He would “report the costs of paying off our debt and pension obligations in annual budgets.”
On the other hand, Paul Vallas says, “he will create an Independent Budget Office akin to the New York City charter to score major legislation and manage the annual budget. He will also revamp the city budget process to comport with national best practices for transparency, citizen input and participation, independent analysis and budgeting, and budget transparency standards.”
The merits of both of their statements can be debated.
However, Truth in Accounting calls for the mayoral candidates to:
Truly balance the budget by adopting full accrual accounting.
Do not include loan proceeds as revenues in the budget.
Properly fund the city’s pension plans.
Properly fund the city’s retiree health care plans.
If they are unwilling to do the above, then at a minimum, be honest by highlighting that the budget has not been and is not truly balanced.
These are the only ways for both candidates to honor their campaign promises and for Chicago to begin to dig out of its fiscal mess.