The Silent Epidemic {Part I The Weight Of Water}
"In the struggle between the stone and water in the end the water wins."
Japanese proverb.
Water in small quantities weighs very little. A drop of the stuff is barely noticeable. Almost any human beyond a toddler has little trouble lifting a glass of H2O. However, get much beyond a pint of liquid and one begins to notice its weight. A quart is noticeably heavier although still requiring little effort to lift. A gallon of fresh water weighs 8.34 pounds. One cubic foot of water contains about 8 gallons. Water gets heavier and denser the more of it there is, just notice some time the pressure on your ears when you dive much below six feet. Water is a life giving element as well as one of the most destructive forces on this planet. It weaves it's way through everything on earth. In mighty oceans it dictates much of what transpires on earth, yet a single drop is almost not worth noticing.
Taxes perform much of the same function in civic life as water. They pay for collective services that the public wants or needs or are mandated by governmental authorities. In a democracy, we deem that collectively paying for things such as schools, security and fire protection a good thing. Combined, it costs us all much less to have a fire department then if say we still had a system where neighborhoods banded together to pay for fire protection. It is not necessarily any individual tax that is the burden it is the cumulative weight of these that over time can sap the vitality out of a community. When one looks at the cumulative effects of all the additional taxes that have been added onto people's bills in the past few years then like the weight of vast amounts of water it is easier to see how the citizens of Illinois are being crushed.
In this post we will look at a very broad overview of the financial problems facing the state. It is possible that the numbers I'm showing you below will have changed since I last found these statistics and I'm sure there are other sources that might say I am understating or overstating the situation. Assume these numbers are close to what is actually out there. These are not meant to be a primer on all of the tax issues facing Illinois, her cities and counties. I am trying to highlight the problem facing us and do so in nothing more than a quick reference manner. For my analysis it won't matter if my numbers are off by a few billion dollars in either direction. They will still point out the issues we face at both the governmental and individual levels. Both governments and individuals have to pay their bills. Governments operate under the principle that they can always tax citizens and business. Businesses may be able to charge more over time to offset the encroachment on taxes but it is not clear that all individuals can do so.
Again, In this series I am making no judgments on why we pay taxes or on whom the burden should fall. You will have to make your own decision on that. I am simply discussing the consequences of that burden and what is not debatable are the consequences of those taxes to individual's bank accounts. In Illinois the biggest burden to the tax structure is the stress being caused by pension liabilities at nearly every level of government. By one measure the total combined pension debt in Illinois is $203 billion. According to one study, Chicagoans are on the hook for nearly $150 billion in overlapping retirement debt and another study shows Chicago has the worst pension crisis of any major city studied. Below the same study linked above shows the pension retirement debt burden per Chicago household.
Chicago enacted a series of tax hikes in recent years and still saw some its pension liabilities rise from $23 billion dollars to $30 billion. Most important, nearly all of those tax hikes went to try and shore up the city's pensions. Very little of that money went for things like extra police, infrastructure like new roads or money to aid the poorest communities in the city.
Of note this analysis also does not include all other debt obligations the city has compiled nor does it include the debt or pension obligations of Cook County or the state of Illinois. Nor are we looking at downstate cities such as East St. Louis or Peoria which have funding issues of their own. There is no time and not enough space to detail how we've all come to this point. Nor are we going to review the machinations of politics at all levels that have tried and failed to come to grips with the crisis. Just know that the main way most governmental units have chosen to deal with this has been to raise taxes and take on more debt. The end result is so much debt that it is crushing almost every governmental unit just as sure as a bursting damn and the ensuing weight of water crushes everything in it's path.
Now that we've defined the problem we'll start next week discussing how this burden affects the pocketbooks of citizens. What first started as a trickle has turned into a torrent that threatens to wash many things away.
Coming next time: Rendering Unto Caesar.
Again, In this series I am making no judgments on why we pay taxes or on whom the burden should fall. You will have to make your own decision on that. I am simply discussing the consequences of that burden and what is not debatable are the consequences of those taxes to individual's bank accounts. In Illinois the biggest burden to the tax structure is the stress being caused by pension liabilities at nearly every level of government. By one measure the total combined pension debt in Illinois is $203 billion. According to one study, Chicagoans are on the hook for nearly $150 billion in overlapping retirement debt and another study shows Chicago has the worst pension crisis of any major city studied. Below the same study linked above shows the pension retirement debt burden per Chicago household.
Chicago enacted a series of tax hikes in recent years and still saw some its pension liabilities rise from $23 billion dollars to $30 billion. Most important, nearly all of those tax hikes went to try and shore up the city's pensions. Very little of that money went for things like extra police, infrastructure like new roads or money to aid the poorest communities in the city.
Of note this analysis also does not include all other debt obligations the city has compiled nor does it include the debt or pension obligations of Cook County or the state of Illinois. Nor are we looking at downstate cities such as East St. Louis or Peoria which have funding issues of their own. There is no time and not enough space to detail how we've all come to this point. Nor are we going to review the machinations of politics at all levels that have tried and failed to come to grips with the crisis. Just know that the main way most governmental units have chosen to deal with this has been to raise taxes and take on more debt. The end result is so much debt that it is crushing almost every governmental unit just as sure as a bursting damn and the ensuing weight of water crushes everything in it's path.
Now that we've defined the problem we'll start next week discussing how this burden affects the pocketbooks of citizens. What first started as a trickle has turned into a torrent that threatens to wash many things away.
Coming next time: Rendering Unto Caesar.
posted by CR English at 1:42 PM
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