A once-in-a-generation investment market for government worker pension funds likely will be fleeting, according to a Cook County Treasurer’s Office report of local government debt. The office’s latest analysis shows overall local government debt in Cook County rose 1.6 percent to $160.5 million from fiscal 2020 to 2021 — a modest increase held in check by the exceptional investment performance of the pension funds. But those gains are expected to be diminished by investment losses in fiscal 2022 that have yet to be fully recorded.
The report, based on data submitted to Treasurer Maria Pappas under the Debt Disclosure Ordinance enacted at Pappas’ urging in 2009, also explains how the region’s primary economic engines — its two airports — rack up significant debt that is no burden on Chicago property taxpayers. Although billions of dollars of debt stem from work at O’Hare and Midway airports, all of it is paid off with federal revenue and from fees and taxes paid by airline travelers. That’s just one way some types of local debt don’t push up property taxes. That’s also the case for water and sewer line upgrade debt, which is paid off with water and sewer fees, and bonds backed by sales taxes instead of property taxes.
Those alternate debt-funding sources help explain why Chicago has one of the lowest tax rates in Cook County despite having one of the highest debt levels. The report also explains why some predominantly minority south suburbs have high property tax rates despite relatively low amounts of overall debt. That occurs when troubled finances constrain the ability to borrow, forcing local leaders to instead raise property taxes to fund government. In addition, this report includes dozens of governments previously excluded for lack of adequate assessment data, including 13 additional municipalities, 17 more school districts and 50 other local governments.
“This is the ultimate in government accountability,” Pappas said. “It opens government books that were previously closed. People can now see where their tax money goes and how much debt their governments have incurred.” The latest debt report can be found at cookcountytreasurer.com
