The economic recession that began in 2007 exposed and aggravated a government debt crisis that had been brewing for many years at the national, state, and municipal levels of the U.S. Slow or negative economic growth, falling housing values, and rising costs for social safety-net programs came together to make it impossible to hide the extent to which governments are borrowing to pay for current operations and shortchanging their workers’ pension funds.
While many studies have analyzed the current debt level of the federal government and to a lesser extent that of state governments, there has been little research on county and municipal debt. This report seeks to begin to fill that void.
For this project we analyzed the financial condition of 518 primary taxing districts within Cook County, the second-most populous county in the United States and home to the City of Chicago. Data were derived from the most recent financial reports published on the Cook County Treasurer’s Web site on June 30, 2012. The 518 taxing districts have a combined “financial burden” of almost $34 billion.
The Institute for Truth in Accounting (IFTA) determined the “financial burden” by subtracting liabilities the taxing districts have accumulated to date, including unfunded retirement liabilities, from the assets available to pay those liabilities.
Specifically, we found the following:
- Unfunded pension liability, $31.07 billion
- Unfunded retirees’ health care benefits liability, $7.18 billion
- Other debts and liabilities, $24.88 billion
- Total amount of bills, $63.13 billion
- Assets available to pay bills, $29.41 billion
- Financial burden (total bills minus assets), $33.72 billion
There are 1,966,356 households in Cook County. Simple division produces the following average per-household amounts:
- Unfunded pension liability, $15,799
- Unfunded retirees’ health care benefits liability, $3,651
- Other debt and liabilities, $12,655
- Total amount of bills, $32,105
- Assets available to pay bills, $14,957
- Financial burden (total bills minus assets), $17,147