CHICAGO – The Chicago City Council overwhelmingly approved a $7 billion 2014 budget Tuesday, balanced through a mix of spending cuts, one-time revenues, higher fees, fines and cigarette taxes that leaves little buffer to absorb the jolt of a $600 million pension payment spike looming in 2015.

Without a sales or property tax increase, the vote on Mayor Rahm Emanuel’s budget was an easy one for many council members given the fiscal cliff that looms in the 2015 when the deficit could skyrocket to $1 billion due to the pension spike. The city’s near-and-long term pension funding strains have driven triple-notch downgrades of its $8 billion of general obligation bonds by two rating agencies in recent months.

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