Scary Larry? My esteemed colleague from the Civic Federation, budget guru extraordinaire Laurence Msall, offers this cheery forecast following City Council approval of Mayor Daley’s final budget, which relies on parking privatization reserves and one-time revenues to plug a $650 million hole without raising taxes and fees or cutting services: “The new mayor is going to be forced to make significant cuts in all areas of city services, including public safety, and is going to be forced to raise taxes just to fund the city’s pension liability.” For the record, Daley disagrees.
Why Scary Larry may be right. Part 2 of the Tribune’s disturbing portrait of pension perils in the city focuses on risky investments with poor returns since 2000. Half of the investments have lost money, and the overall return of less than 5 percent is just a fraction of what super-safe T-bills would have returned.
