Authored by Mike Shedlock via MishTalk.com,
Union contracts are at the heart of the issue. The situation in Chicago is imminent.
Escalating Crisis
Recent reports indicate that the budget shortfall in L.A. is approaching $1 billion, with layoffs becoming almost certain.
The financial troubles in L.A. have erupted into a full-blown crisis, with the city’s top budget official revealing that the upcoming year’s deficit is close to $1 billion, leading to the likelihood of layoffs.
City Administrative Officer Matt Szabo mentioned that Mayor Karen Bass’ proposed budget, set to be unveiled on April 21, aims to bridge the gap, but it will involve tough “cost-cutting decisions.” He cautioned that the significant decrease in revenue and escalating costs has resulted in a budget deficit that necessitates layoffs.
Szabo attributed the city’s financial challenges, in part, to the increased expenditure on legal settlements, which have surged in recent years. Tax revenues have been below expectations and are projected to decrease further in the upcoming fiscal year starting on July 1.
Anticipated pay raises for city employees in the next budget year are anticipated to consume an additional $250 million. Additionally, Szabo highlighted the need for the city to replenish its reserve fund, which has been depleted in recent months to balance this year’s budget.
Councilmember Katy Yaroslavsky, chair of the budget committee, stated that the council may need to explore the option of requesting unions representing city workers to defer the scheduled raises or make other concessions.
“I believe all options should be considered,” she remarked in an interview.
David Green, president and executive director of Service Employees International Union Local 721, criticized Szabo’s comments as “short-sighted and irresponsible.”
“It’s undeniable that this figure has shocked all of us,” expressed Councilmember Bob Blumenfield, a member of the council’s budget committee.
Blumenfield predicted that city leaders would have to negotiate financial concessions with the workforce.
“Eighty percent of our expenses comprise labor,” he noted. “If our budget falls short by more than 10%, addressing labor costs is essential.”
Over the past two years, Bass and the council have approved salary increases and enhanced benefits for various unions, starting with police officers, followed by civilian city employees, and then firefighters.
Foreseeable Crisis
The current situation has been evident for years.
Corrupt mayors form alliances with corrupt union leaders and employ budget tricks to conceal the outcomes.
The city depleted its reserve fund to maintain the appearance of a balanced budget.
Subsequently, the city received temporary relief, along with other corrupt blue cities, through Biden’s financial aid packages, notably the third phase of fiscal stimulus, which temporarily masked fiscal challenges while fueling the highest inflation rates since the 1970s.
In response to the inflation, unions demanded increasingly substantial pay hikes on top of extravagant benefits.
Consequences Unfolding
It is reassuring that Trump will not provide bailouts to these irresponsible cities.
As long as Republicans control the Senate, this stance remains unchanged, irrespective of the White House occupant.
Next in Line: Chicago
March 13, 2024: Chicago Teachers’ Union Seeks $50 Billion Despite $700 Million City Deficit
If you reside in Illinois, depart before unions deplete your entire savings.
July 2, 2024: In Chicago There’s Under a 50 Percent Chance Police Show Up If You are Shot
Good luck in Chicago expecting police assistance if you encounter gun violence, stabbings, domestic abuse, or other serious offenses.
August 30, 2024: The Pending Implosion of Chicago Public Unions, No City is More Deserving
Chicago faces a budget deficit of nearly $1 billion. Add another $2.9 billion for a proposed teachers’ contract plus an undisclosed amount for firefighters.
December 23, 2024: The Corruption and Incompetence of Chicago’s Mayor Has No Bounds
Chicago mayor Brandon Johnson stooped to new lows when his selected board terminated Chicago Public Schools (CPS) CEO Pedro Martinez without valid cause.
It’s time for an update on union contracts and pension funding in Chicago.
I openly advocate for a collapse in major city economies as it represents the only opportunity for reform in these evidently corrupt municipalities.
However, for Trump to address this issue effectively, he must urge Congress to abolish collective bargaining for public unions.
Regrettably, Trump also caters to unions, particularly the police and dockworkers, as demonstrated by the evidence.
Addendum
Keep in mind that “L.A. spent $160 million last year to recover $100 million in parking fines. This scenario perfectly encapsulates the essence of this city. Engage in a universally disliked task and execute it poorly.”
Credits to @adamcarolla
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