Toronto/Chicago comparisons

[jje1000]

Rather sobering and a stark reminder that Chicago is badly run.

While a city can try to grow itself out of this issue, Chicago has been shrinking for years- meaning that tougher reform is needed, something that its politicians seem unwilling to pursue.

The kicker is that these pensioners are also likely no longer living in Illinois, possibly meaning that Chicago is funding the sunbelt states.

Chicago’s government pension obligations have increased nearly sixfold since 2014, driving up Chicago’s sky-high property taxes. Another increase for 2025 was likely avoided, but city leaders need state lawmakers to make a permanent fix.

The rapid increase in pension costs has eaten most of the city’s property tax levy and taken money away from other city services, such as the city library, colleges, some note and bond funds in addition to the four city-run pension funds. Pension costs used to consume 41% of the city’s property tax levy, but now take 80% of it. Even worse, on net, every new property tax dollar raised since 2014 has gone towards rising pension costs. All other spending items from the property tax levy have seen a net decrease during the past 10 years, when adjusted for inflation.

In 2014, pension spending represented just 6.8% of the city’s net appropriation of local funds; the spending that the city controls and is responsible for. The pension share of city spending has grown nearly unabated to 22.4% of the city’s net appropriations of local funds in 2024. Pension costs are now the single-largest line item in the city’s budget, receiving more tax dollars than the police department, fire department or infrastructure.

Chicago property taxes have doubled in 10 years, thanks to pensions

Chicago’s government pension obligations have increased nearly sixfold since 2014, driving up Chicago’s sky-high property taxes. Another increase for 2025 was likely avoided, but city leaders need state lawmakers to make a permanent fix.

www.illinoispolicy.org

 

[taal]

Wait are teachers a city level entity in the states ?

 

[rbt]

Wait are teachers a city level entity in the states ?

Yes, they're municipal employees. They're largely regulated and funded by the federal/state levels though.

Teachers in Ontario are not legally government employees at all; they're school board employees which is regulated/funded by but separate from government.

 

[rdaner]

I wonder what other cities are facing this?

 

[evandyk]

The Ontario Teachers Pension Plan is also very well funded. It owns pretty much everything in Ontario (TD Towers, Eaton Centre, etc.).

This is a somewhat common story in the US, though not with cities the size of Chicago.

https://www.mercatus.org/economic-insights/expert-commentary/pensions-and-bankruptcy-tale-three-cities

 

[Northern Light]

The Ontario Teachers Pension Plan is also very well funded. It owns pretty much everything in Ontario (TD Towers, Eaton Centre, etc.).

This is a somewhat common story in the US, though not with cities the size of Chicago.

https://www.mercatus.org/economic-insights/expert-commentary/pensions-and-bankruptcy-tale-three-cities

The principle municipal pension fund - OMERS is Oxford Properties - owner of Yorkdale and Square One, and the Convention Centre, among many other properties.

OMERS is currently 97% funded on a smoothed basis, which is fairly close to fully funded, given wobble over time.

The Teacher's Pension Plan is fully funded (actually marginal surplus, but the regulatory filing will seek to label that as contingency for this year)