This type of ruling likely will cause (possibly Chicago) or other cities of all sizes across the U.S. to eventually go bankrupt. The problem is that the Great Recession changed the dynamics of property taxes. The philosophy was that property values would continue to rise unabated but that was never possible. As a result the drops in property values and because of this the losses in property tax revenues take away the possibility of cities remaining financially viable regarding city pensions of City workers nationwide. So, the more cities offered in pensions the more likely those cities at some point will be forced into bankruptcy as a direct result. When cities promise the impossible (long term) they likely will eventually be forced into bankruptcy one by one over the years now. Being aware of this hopefully more cities will learn this very hard lesson regarding property taxes long term.
Chicago's Plan to Change Pension Benefits Is Ruled Unconstitutional
| New York Times | - |
A
judge in Chicago ruled on Friday that a plan to change city workers'
pensions was unconstitutional in a case being closely watched for its
effect on the city's uncertain finances.
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