JULY 31, 2012 10:30 PM
Special Investigation: Public Debt Crisis Hits Home Town, Illinois
If you live in a suburb, village or small city surrounding Chicago, the next big public debt crisis is coming your way.
While it’s common knowledge that Illinois and Chicago’s government balance sheets are awash in debt, scores of small municipalities are the next casualties of a escalating public finance debt debacle brought on by mismanagement, out-of-control borrowing and huge public pension obligations.
The Better Government Association investigated this emerging and increasingly urgent trend by focusing on the financial challenges of three established and mid-sized Chicago suburbs: Des Plaines, Evanston and Oak Park.The BGA examination of the suburbs’ finances and interviews with civic leaders, municipal experts and area residents reveals that even stable, prosperous communities, such as these, are hard-pressed to meet their obligations, especially as soaring public pensions and other costs outstrip their ability to financially cope.
These suburbs, like many municipal counterparts throughout the region, are struggling to deliver the services residents demand without squeezing homeowners and businesses with ever-higher taxes and fees.But deep cutbacks—including library and facility closings, selling assets, worker lay-offs, consolidating or shutting units of government, even scrapping holiday fireworks displays and outsourcing festivals—are underway.
Unfortunately, as the strain of reductions is beginning to take a toll on residents and businesses, these moves may not be enough to staunch the crisis."Does something have to give? It’s already starting to happen," says Christopher Canning, board member and former president of Northwest Municipal Conference, a government trade group that represents over 41 municipalities and one township in Cook, DuPage, Kane, Lake and McHenry counties.
DES PLAINES: CASINO NO BONANZA
As gamblers take their chances at the rows of high-stakes gaming tables and glittering slot machines, the revenue from the year-old Rivers Casino, in northwest suburban Des Plaines, is starting to flow to that city’s bottom line.
But Des Plaines residents hoping to cash in on a new era of gambling-related prosperity will be sorely disappointed.Indeed, casino money will help shore up aging water lines and crumbling sidewalks but it will not solve pressing economic problems such as soaring pension costs, vacant storefronts and stalled hotel developments.
"It’s not like we’re going to have streets full of gold," Alderman Michael Charewicz said at a City Council meeting in June.
Even if the city could count on a steady stream of casino money, Des Plaines’ legally required contribution to public employee pensions will make it harder to hold the line on taxes while providing essential services.
Total pension costs have grown by 164 percent in the last 10 years, from $3.5 million to a proposed $9.2 million contribution in 2012, according to the city’s 2012 budget.
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The Better Government Association investigated this emerging and increasingly urgent trend by focusing on the financial challenges of three established and mid-sized Chicago suburbs: Des Plaines, Evanston and Oak Park.The BGA examination of the suburbs’ finances and interviews with civic leaders, municipal experts and area residents reveals that even stable, prosperous communities, such as these, are hard-pressed to meet their obligations, especially as soaring public pensions and other costs outstrip their ability to financially cope.
These suburbs, like many municipal counterparts throughout the region, are struggling to deliver the services residents demand without squeezing homeowners and businesses with ever-higher taxes and fees.But deep cutbacks—including library and facility closings, selling assets, worker lay-offs, consolidating or shutting units of government, even scrapping holiday fireworks displays and outsourcing festivals—are underway.
Unfortunately, as the strain of reductions is beginning to take a toll on residents and businesses, these moves may not be enough to staunch the crisis."Does something have to give? It’s already starting to happen," says Christopher Canning, board member and former president of Northwest Municipal Conference, a government trade group that represents over 41 municipalities and one township in Cook, DuPage, Kane, Lake and McHenry counties.
DES PLAINES: CASINO NO BONANZA
As gamblers take their chances at the rows of high-stakes gaming tables and glittering slot machines, the revenue from the year-old Rivers Casino, in northwest suburban Des Plaines, is starting to flow to that city’s bottom line.
But Des Plaines residents hoping to cash in on a new era of gambling-related prosperity will be sorely disappointed.Indeed, casino money will help shore up aging water lines and crumbling sidewalks but it will not solve pressing economic problems such as soaring pension costs, vacant storefronts and stalled hotel developments.
"It’s not like we’re going to have streets full of gold," Alderman Michael Charewicz said at a City Council meeting in June.
Even if the city could count on a steady stream of casino money, Des Plaines’ legally required contribution to public employee pensions will make it harder to hold the line on taxes while providing essential services.
Total pension costs have grown by 164 percent in the last 10 years, from $3.5 million to a proposed $9.2 million contribution in 2012, according to the city’s 2012 budget.
Read More
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08-01-2012 04:42 PM Number of Views: 245