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| Housing Review |
The US Home Construction's overall trend, revealed by trends of price, leverage, and time, are defined in The Matrix for subscribers.
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Forget Politics, Many States, Counties, and Cities Are In Trouble
Chicago and Illinois residents should have or need to be ready to run.
Illinois has deepened Chicago’s financial crisis with a new law signed by Governor J.B. Pritzker on August 1, adding $11 billion in pension liabilities by expanding benefits for police and fire employees hired after 2011. This drops their pension funding levels to just 18%, far below the critical 40% threshold.
Chicago already has the worst pension crisis of any U.S. city, with seven of the ten most underfunded local pension systems. Nearly 40% of the city’s budget now goes to debt and pensions, crowding out essential services. The city also holds the lowest credit rating of any major U.S. city, and the new law could trigger further downgrades.
Because Illinois’ constitution forbids pension cuts, these new benefits cannot be reversed—even if voters oppose them. The burden will fall on working Chicagoans and possibly federal taxpayers if Illinois seeks a national bailout, as it did during the pandemic.
Experts warn that without reform, including allowing municipal bankruptcy and amending the state constitution, Chicago’s financial collapse could set a dangerous precedent for cities nationwide.
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