“If people keep moving out, how are they going to have enough taxpayers to support the pension benefits of public employees??”
Two words: Exit Tax.
Impossible? They have them effectively already, in the guide of a real estate transfer tax, which Chicago was considering raising further “on the wealthy”.
I assume those rates are higher now?
In 1998 I paid 163K for a house in Chicago which I did 40K improvements and paid $2413 per annum property taxes my last 2 years. In 2003 I sold this house for 325K. Today Zillow makes a zestimate of 337K and looking at comparable sales this looks about right. The 2017 property taxes is $5953. The State income tax rate has gone from 3% to 5%. The Sales Tax rate has gone from about 8.25% up to 10.25%. And salaries have remained flat while prices are going up, up, and up. Families in Chicagoland have been getting squeezed the past 16 years bigtime. And now the pension crisis is well-known and not going to disappear.
Its absurd to have any pension plan having an Assumed Return Rate over 3x the 10Y treasury rate. But that’s what we have in Chicago now. If they were to get realistic then they’d be shown to be even tens of billions more in the hole than they are presently.