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Posted on 09/07/2026 9:53:50 PM PDT by CFW
Although a recent report on financial red flags said Chicago is on a path toward insolvency, Wirepoints founder Mark Glennon says Chapter Nine bankruptcy might not work for the Windy City like it previously did in Detroit.
Reason Foundation’s report on state and local government finances said Detroit’s financial condition at the end of fiscal year 2012 would trigger seven red flags, just like Chicago received in the organization’s report last month.
In July 2013, Detroit became the largest city in U.S. history to file for bankruptcy.
Glennon said Chicago, unlike Detroit, has sold most of its future sales tax revenue.
“This was a major mistake that the legislature in Springfield made about five years ago when they passed legislation authorizing this form of financing,” Glennon told The Center Square.
Glennon said Chicago’s pension funds have an unfunded liability of $36 billion.
“You can't cut your way out of that. You'd be throwing retirees on to the street if if you cut their pensions by 25%, by 75%, to solve it. There's going to have to be another source of money to fund those pensions.” Glennon said.
In July, Mayor Brandon Johnson’s budget office projected a $130 million budget gap for the current fiscal year, but Johnson said on August 25 the shortfall was $85.1 million.
The mayor’s office projected a deficit of $882.4 million for 2027.
(Excerpt) Read more at thecentersquare.com ...
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Has the can now become too rusty to kick?
Here is the first mention I could find at FR on Chicago bankruptcy.
2015. Sixteen years ago.
“Chicago’s Only Possible Salvation: Bankruptcy”
https://freerepublic.com/focus/f-news/3264155/posts
Small note: I think the writer’s headline meant to say
“Severe issues could WREAK potential Chicago bankruptcy”
Not ‘Wreck’ or destroy, which would mean the exact opposite.
Some city-run grocery stores, a mandated increase in the minimum wage, and a tax on second homes should fix it. Wait. Nobody has a second home in Chicago.
I live in Nevada. Why do I feel like “another source of money to fund those pensions”?
JK!!! I have friends who have died from ALS and dementia. I know it's not a laughing matter but sometimes it helps.
Ruh roh.
As long as there are owners of any property or citizens living within Chicago’s borders, there will be plenty of ways to get their money. Visitor taxes and sales taxes are already high—just make them higher.
There is absolutely no reason for Chicago to file bankruptcy.
That might fund the massive pay increase the teacher’s union is demanding and they got the current Mayor elected, the old white retirees, screw them, it’s all white privilege anyway.
Easy fix for Chicago.
Raise property taxes to 80% of assessed value per annum. Homeowners that cannot pay will have their property confiscated and redistributed to the ‘unhoused’.
Tax un-realized gains on the Mercantile at 90%, quarterly.
Raise fees to drive inside the city limits to $100/mo or more.
Raise fees for businesses to operate inside city limits by 500%. Not counting bribes to City Inspectors.
Add another dollar a gallon to fuel prices in ‘road tax’.
Increase sales tax above the current 10% for every item purchased. Make it 20% so those Big Companies Pay Their Fair Share.
Chicago will close that $130B pension gap in no time.
~~~~~
What’s that, you say? They’ve already done most of this?
Well, crap. They’ll just need to vote harder!
Good point about minimum wage. I forgot to mention that in my list here: https://freerepublic.com/focus/news/4394650/posts?page=10#10
Add, raise minimum wage to $150/hr for Cook County.
Gov Pritzker can raise it to $50/hr statewide.
That should solve the Republican/Trump “affordability crisis”.
[/extreme sarcasm]
Duh! Tax the billionaires! That always works.
Ha! WAY before that. Grok…
Chicago’s first widely documented insolvency alarm came in **1837**, immediately after the town was incorporated as a city on March 4 of that year.
The Panic of 1837 burst a real-estate and internal-improvements bubble. Land prices that had reached $1,000 an acre in 1836 collapsed to about $50. The Chicago branch of the State Bank of Illinois suspended specie payments on May 24, 1837. The city itself had almost no cash in the treasury and issued high-interest scrip simply to keep operating. Public meetings called for “stay laws” or outright repudiation of debts; newly elected Mayor William B. Ogden had to intervene to prevent default and protect the city’s credit. Contemporary accounts describe wholesale bankruptcy and a city that was “dead broke almost before the day of its birth.”
Later crises (the 1930–32 Depression-era cash crunch, various bank panics, and the modern pension-funding emergency) were also severe, but the 1837 episode is the earliest recorded instance of city-wide alarm over municipal insolvency.
If Chicago went into bankruptcy, a receiver would be appointed to run the city. Who would appoint the receiver?
Pensions are too high because they were negotiated between the politicians and the unions. The future taxpayers who would be forced to pay were not at the table. Therefore, the receiver could insist that the pensions be reduced to levels consistent with pensions in the private sector.
I can see some good coming out of a bankruptcy.
How will “Our Democracy” be saved?
[Asking for a Democratic Socialist]
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