CHICAGO — The treasurer of Cook County, Ill., Tuesday said she was shocked by recent figures showing that the county’s local governments together owe $108 billion — nearly a quarter of which is due to unfunded pension liabilities.
The report marks the first effort in the nation to compile information outlining local government debt, budgets and pension obligations, according to Treasurer Maria Pappas.
Cook County has roughly 550 local taxing units, including Chicago.
“Everybody is looking at the states and the federal, but nobody looks at local governments,” Pappas said in a telephone interview yesterday. “This is the first time. Everybody nationally should do it.”
Cook County municipalities and taxing districts collectively owe $108.3 billion in debt and pension liabilities. Of that, $51 billion is for pension liabilities, and $25 billion is unfunded pension liabilities.
Cook governmental units collectively owe $61.1 billion in both regular and pension debt. Educational districts owe $20 billion. Sewer districts and park districts owe $4.4 billion and $3.2 billion, respectively.
“I was shocked,” Pappas said of the results. “I didn’t think when I started that it would be this dramatic.”
The real debt numbers are likely worse, she added. At least two-thirds of the units did not include other post-employment benefit liabilities in their figures.
Chicago, the economic engine of the county, leads the pack in terms of debt. Its debt totals $48.9 billion, according to the treasurer’s report.
Its pension liability is $25 billion, of which 52% is unfunded.
The county itself carries the second-largest debt load, with a total of $17.6 billion. That includes an $11.5 billion pension liability that is 69% funded.
Only about one quarter of county taxing districts have pension funds that are funded at 80% or more, and 75% of local units are funded at less than 80%.
“It’s like if I were the surgeon general, I’d say that 75% of our governments are morbidly obese,” Pappas said in a speech Tuesday morning before the Civic Federation, a local watchdog group, where she unveiled the report.
The figures translate into an average debt of $63,525 for every Chicago household and $33,000 for every suburban household.
“Individually, we were aware of some of the levels of debt, but when you combine them with all other municipalities and local governments, it is a very staggering number,” said Lawrence Msall, executive director of the Civic Federation.
“It puts a spotlight on how very well-managed governments that have stable property tax bases are still struggling to find resources to fund their pension commitments,” he said.
Pappas said she had no solution for the problem except that governments will have to start reducing their “headcounts” — personnel costs make up roughly 80% of most government expenditures.
The treasurer said her report reflects figures compiled throughout 2010 after she proposed and the county board passed the Debt Disclosure Ordinance.
The measure requires Cook’s 553 local governments to report their yearly budget and their debt.
Pappas later asked the governments to provide their pension liabilities and their unfunded pension liabilities. She now plans to ask for OPEB data and said she will update ita annually.
The annual updates will prove valuable to those interested in tracking the data, Msall noted.
“This will let us do trend analysis and see what steps governments are taking to address their liabilities,” he said.
