Sun-Times - Chicago’s finances among the worst after 2008 recession: study

It seems Mayor Emanuel when he first entered into office with the city's finances as his first concern and this study shows why:

Chicago weathered the storm of the 2008 recession in worse financial shape than all but two major cities — Boston and bankrupt Detroit — because spending, debt and unfunded pension liabilities rose faster than revenues, according to a new study.

The Civic Federation used nine key indicators to measure Chicago’s financial performance against 12 other U.S. cities over a five-year period ending Dec. 31, 2011, that coincided with the recession and the painstaking recovery.

Chicago ranked No. 11. Only Boston and Detroit fared worse. New York, Los Angeles, Philadelphia, Houston, Kansas City, Seattle, Phoenix, Pittsburgh, Columbus and Baltimore all emerged in better shape.

The reasons are simple. The mountain of debt got higher. Unfunded pension liabilities are $19 billion and rising. And taxes are not growing as fast as city spending, according to the Civic Federation.

Over the five-year period, Chicago’s “real liabilities” — everything from operating expenses to debt and pension liabilities — rose by $824 a person to $3,296 for every man, woman and child living in the city.

Chicago raised taxes and fees by $113.45 a person during that same period, topped only by Houston ($122.01), Boston ($205.58), Baltimore ($354.28) and Detroit ($357.18). But it was not nearly enough to keep pace with expenses.

Although Chicago’s “debt service-to-expenditure ratio” declined over the five-year period, the five-year average of 11.9 percent is still the highest of all 13 cities, which had an average of 9.7 percent.

Read the whole thing!