Own a 3-Bedroom Vintage Dutch Colonial in Beverly: 1721 W. 104th Place
This 3-bedroom Dutch Colonial single family home at 1721 W. 104th Place in Beverly came on the market in September.
It has retained much of its vintage charm.
At only 1500 square feet, two of its bedrooms are upstairs and the third on the main level.
It has central air.
Built in 1924, the house is on a double Chicago lot of 100×135 and has a two car garage.
104th Place is also known as Walter Burley Griffin Place and is a historic district.
It is home to the largest concentration of Prairie style homes in the city (7 of them designed by Walter Burley Griffin). The historic district runs from 1600 to 1800 west.
Is this house a nice condo alternative?
Carole Klein at City Point Realty has the listing. See more pictures here.
1721 W. 104th Place: 3 bedrooms, 1.5 baths, 1500 square feet, 2 car garage
- I couldn’t find a prior sales price
- Originally listed in September 2010 for $319,000
- Currently still listed for $319,000
- Taxes of $841
- Central Air
- Bedroom #1: 20×14 (second floor)
- Bedroom #2: 9×14 (second floor)
- Bedroom #3: 13×14 (main level)
Those are some cheap taxes for a double lot. Is it because of the historic district or something?
Wouldn’t 100×135 be a quadruple Chicago lot?
“Those are some cheap taxes for a double lot. Is it because of the historic district or something?”
Senior freeze.
“Wouldn’t 100×135 be a quadruple Chicago lot?”
Many (perhaps most) lots in that area are 50′ wide, so it’s a double lot for the ‘hood, but a 4x “standard”.
Taxes are low due to senior exemption(s)…most likely senior freeze.
Those are some “old school” sleeping arrangements with the two beds in the one large room.
This isn’t a condo alternative because anyone looking for a condo wouldn’t be looking in Beverly and anyone looking in Beverly wouldn’t be looking for a condo.
@Chris M — Well said.
Also, add another thing to my wish list: Realtors listing the taxes with or without mentioning the exemptions so that you think they are gonna be low
“Taxes are low due to senior exemption(s)…most likely senior freeze.”
they got both, dont even need to check the assessor taxes like that are a exempt and freeze. the freeze is insane, being a low income senior in chicago is like hitting the jackpot. until you die and give your kids your stuff tax kicks in, but hey your dead its your kids worry now.
“Taxes are low due to senior exemption(s)…most likely senior freeze.”
Its more social engineering. Chicago has to be one of the capital’s of social engineering in the US. Look how well our government achieves its desired outcomes.
A little pricey for a cop making $51,000 and trying to feed a family.
It’s cute but clearly overpriced for a house on the east side of Beverly.
hopefully Toll brothers buys this teardown and builds a nice huge mcmansion on that nice big lot
Nice place, but as mentioned it’s a little too far east. Move it, over to Leavitt and it’s priced right. Move it and the historic district over and you can make it $399. The area from Prospect to the tracks on the west has some great houses, but right or wrong, many people in the market for houses of this price in Beverly will simply not look east of the tracks.
“A little pricey for a cop making $51,000 and trying to feed a family.”
Is that how much probies are making now? b/c it’s been more than that (over $55k) for step 2 since 1/1/07.
““A little pricey for a cop making $51,000 and trying to feed a family.”
Yah, 51k base salary + a ton of overtime (at white castle) = 80k.
“Yah, 51k base salary + a ton of overtime (at white castle) = 80k.”
No OT/off-duty work for probies.
I ask again, did I miss when we *cut* Police pay?
“Yah, 51k base salary + a ton of overtime (at white castle) = 80k.”
good call, and dont forget the 30k cash for the weekend side job security at some pancake house or other establishment.
“No OT/off-duty work for probies.”
now i need to make a call to see if this is true, dang you cribchatter making me work.
Dude, I’m $4k off, most of which gets deducted for pension and insurance anyway. Chill out, it’s been a while since I’ve seen a cop’s paycheck, back in 2005 or 2006 IIRC.
For another 300k more you live on the North Shore in arguably the best school district in the state walking distance to K-12 and the Metra:
http://www.redfin.com/IL/Kenilworth/620-Abbotsford-Rd-60043/home/13783683
Oh wait, someone already snapped it up. Never mind.
BTW, they are both dutch colonials. That’s why I offered it up.
“For another 300k more you live on the North Shore in arguably the best school district in the state walking distance to K-12 and the Metra:”
but how does that help the cop making 51k or 55k depending who finds the 4k material. the bluey needs a place in beverly or edison (and the other city worker trend areas).
plus at 21k a year in taxes compared to beverly’s 3.5k-6 taxes is like $1400 extra a MONTH!
“most of which gets deducted for pension and insurance anyway.”
So if I claim I make $50k less than my salary (“most” of $50k gets deducted for “pension” and insurance), that’s close enough?
The “1” was a false precision. And they’re only at $55k for 6 months and get another raise and another 6 months after that. Not that I think (most of) our cops are overpaid, but you like to give every category of city worker a 10-20% haircut to prove your point, which doesn’t need the haircut to be made adequately.
“For another 300k more you live on the North Shore in arguably the best school district in the state walking distance to K-12 and the Metra:”
If you pay more than double, you get a lot more? Is that what we learn?
“BTW, they are both dutch colonials. That’s why I offered it up.”
Or is it that we learn that houses of similar styles in different neighborhoods can be priced very differently?
“For another 300k more”
The seller accepted $619k? After a last sale of $1.31 and listing at $749k? WOW!
Or did you mean another $400k? Or 135% more?
“Yah, 51k base salary + a ton of overtime (at white castle) = 80k.” + $100k in shakedowns/payoffs = $180k
anon, I saw some veteran cops paycheck in 2005 and I remember seeing $51k a year and I remember being shocked that was his base. I think the difference between $51k and $55k is immaterial to my point.
“anon, I saw some veteran cops paycheck in 2005 and I remember seeing $51k a year and I remember being shocked that was his base.”
Odd, as per the contract:
http://www.chicagofop.org/contract/contract_03-07.pdf (page 108 of the pdf)
Even in 2003, the base pay for an officer after 30 months was 53k. 2d half of ’04, it was $53k after 18 mo.
Starting 1/1/11, after coming off prob, CPD base pay is 60,918. Up to 92,268 for Dect. with 25+.
dang anon your to close to bluey if you know all that. i will refrain from my personal opinions of ‘dem as to not offend.
cops with over 7 years (which is most of them) make 70-75K …and overtime is $54 dollars an hour.so figure a cop putting in 20 hours a week in court(which is a lot of them) is making about $1000 a week in overtime alone. you would be suprised to know how many cops pull in over $100K a year.i’m always suprised at how many people think police/FF is some kind of extremely low paying job.
check out http://www.bettergov.org/ and go to the payroll database to check out where your tax dollars go.
“i’m always suprised at how many people think police/FF is some kind of extremely low paying job.”
In most parts of the country it is (until you count their generous pensions & benefits packages). But here in Crook County the Unions are a key part of the machine and they expropriate a far higher than market wage.
Heck I remember reading a few years ago the highest paid city or county employees were a few 911 operators who basically were allowed to and worked 80hr weeks all year. You can make a cool 220k doing that and some people did. Must be nice.
“dang anon your to close to bluey if you know all that. i will refrain from my personal opinions of ‘dem as to not offend.”
Or I’m *really* good at tracking down info. Or both.
But, short of it is: (a) hate the mooks (both bc of what they do and their effect on the 90% who aren’t), (b) can’t tell the good from the bad until it’s too late, (c) prefer to keep my distance bc of a and b. AND appreciate what they do do–as I said in another, I don’t think they’re overpaid, but am tired of the media/internet face being mooks, weis-haters, whiners or combinations thereof
You found a house yet Groove? hit the email, if you want to be OTR.
So anon it’s not 55k or 51k base it’s 53k base. And this guy didn’t get any overtime. Big deal, stop it. The precise amount of money to the exact degree isn’t anywhere as important as the fact that some seniors presumably with a paid off mortgage are trying to sell to their outdated SFH to the next generation, with an asking price that far beyond what I believed a police officer’s base salary was. I mean, maybe the paychecks I saw was purposely low with no overtime so as to reduce the amount of statutory child support he had to pay to his ex-wife, that’s a possibility, and on the other hand, i’m sure plenty of cops make $100,000 a year with overtime and corruption. I know some people in the financial world with officers and we’ve had plenty of conversations. Not every cop makes $100k a year. If they did they wouldn’t all be living in Beverly and Edison Park.
“I don’t think they’re overpaid,”
Probably depends on your income level. Remember the city attorney who used to post here who said starting salaries for them are now 56k after furlough days?
You call that fair? Someone with connections with a HS diploma makes the same as someone with a law degree. Someone who has far higher job security and much more generous pension & benefits?
Its a tale of two diverging castes of society among professionals in solidly blue state’s like Illinois: the government & union protected caste & the private sector caste. I wonder how much longer this can go on with the city not becoming Detroit.
“Not every cop makes $100k a year. If they did they wouldn’t all be living in Beverly and Edison Park.”
Two desirable areas due to demographics. And in EP’s case, actually having the cajones to vote in a Republican representative
“are trying to sell to their outdated SFH to the next generation, with an asking price that far beyond what I believed a police officer’s base salary was.”
Because he thinks he’s financially savvy. This thing may well linger until the estate sale. He’ll go into a nursing home assured of his home’s valuations. And his heirs will wait until he kicks the bucket to unload it at a good price.
150k before 2020.
“You call that fair? ”
“Fair” has nothing to do with “not overpaid”. And even were it both fair, and not overpaid, it still says nothing about whether it’s a wise allocation of resources. I’m just trying to be clear that I don’t think we should pay our cops less.
The pensions, and retirement medical, on the other hand, are a different story.
“I’m just trying to be clear that I don’t think we should pay our cops less. ”
Yeah well when this city goes bankrupt it will be because of like minded folks like you.
“Yeah well when this city goes bankrupt it will be because of like minded folks like you.”
Nope. The cops’ current individual base salaries aren’t close to being the problem.
Want to argue about staffing levels, and mix of assignments, overtime and all that, fine; want to argue about pensions, I’m probably *more* hawkish on cuts. But try to find people who will do a better overall job (ie, fewer mooks) than the current CPD, for less base salary, be prepared to write off the city.
the younger breed of cops are a lot more professional than the old timers/weis whiners.and i think they appreciate the steady job/benefits more.and hopefully the city can just put the new ones on a 401k,or this *will* become detroit. because the pension thing is going to be a taxpayers nightmare.
anyhow,i really like that house.while small,i dont think 1500sq.ft is that bad.really…who wants to be heating a 3500 sq.ft monstrosity on a cold day like this? although i know absolutely nothing about beverly or prices around there.
“so figure a cop putting in 20 hours a week in court(which is a lot of them”
Back in the mid 90s, there was curfew court, drug court, impound court, misdemeanor court, traffic court, and 26th/Cal. This is no longer the case. Lock up as many people as you want on drug charges, you just go to probable cause court once a month at the same time as misdemeanor court. Nowadays, the only police killing on overtime are detectives.
“For another 300k more you live on the North Shore in arguably the best school district in the state walking distance to K-12 and the Metra:
http://www.redfin.com/IL/Kenilworth/620-Abbotsford-Rd-60043/home/13783683
Oh wait, someone already snapped it up. Never mind.”
JMM: You’re obviously understanding that not everyone wants to live in Kenilworth right? I know someone right now looking in Beverly because he works in Northern Indiana and his wife works downtown and the commute from Lakeview every day is killing him. So they’re moving to Beverly as an “inbetween” compromise. No way in heck they’d live on the North Shore.
JMM:
I’m glad you brought up that house in Kenilworth apparently priced nearly 50% under it’s last purchase price.
How about 620 Exmoor? A classic center hall colonial near the train.
http://www.zillow.com/homedetails/620-Exmoor-Rd-Kenilworth-IL-60043/3365414_zpid/
Apparently sold in 2006 for $944,000. Just sold in November for $665,000. That’s about a 30% price decline. And it doesn’t look like short sale.
But I thought the upper bracket areas were doing so well? No price declines in cities like Kenilworth, Hinsdale, Oak Brook etc?
Odd commentary on a RE blog about the state of your cities Police Force. Good or bad in your eyes, you have to admit none of you would want to have to do their job….at any salary.
Coming from a life long NYC resident, no amount of PD salary is enough for the work they do and I am more than happy to see my beyond massive contribution of tax dollars going to the men and women who have made my city safe, neighborhood by neighborhood. Their work has made RE transactions so much easier…and profitable. What were once ‘risk your life to walk/subway through’ ‘hoods are now populated with young, wealthy professionals and their new families.
I recall a poster (milkster?) commenting on another thread about the downfall of once rough and tumble Williamsburg and how it was ‘ruined’ by it’s gentrification…I did not comment due to schedule then, but I could not disagree about that comment more. Thanks to savvy investors and a strong and reliable (nearly corruption free) Police force, this area is now one of the most highly desirable and wealthy areas in the borough.
While I realize the two cities are polar opposites of each other, many who commented negatively about the CPD really need to reflect on how much Chicago WOULD be like Detroit without their presence. While admittedly I am not an authority on the Police in Chicago, without them there would be total chaos in your city.
You really don’t know how well you have it until it’s gone.
“But, short of it is: (a) hate the mooks (both bc of what they do and their effect on the 90% who aren’t), (b) can’t tell the good from the bad until it’s too late, (c) prefer to keep my distance bc of a and b. AND appreciate what they do do–as I said in another, I don’t think they’re overpaid, but am tired of the media/internet face being mooks, weis-haters, whiners or combinations thereof
You found a house yet Groove? hit the email, if you want to be OTR.”
I dont think they are overpaid at all, even with the insanely generous pension. people dont understand what that job really entails and what it does to a person.
I had a few really good friends since grade school who joined the bluey. i use the word “HAD” because our friendship need to end do to them being totaly different after bluey.
one friend a boriqua after a year working, i think it was englewood, just started changing. the guy was just not the same guy and he just got more darker and more racist each week. to the point hearing him talk offended me on every level.
had another good friend that i played 3 on 3 tournaments with since HS. Not only after 7 month on the bluey he would just spew racist comments. the kicker was he was black and the comments were toward the hispanic and black folk.
and look i gave a small example of just the comments they made, but it was more than just that, it was their action too.
its a hard job and i saw first hand how it truly jacks somebody up mentally. for that i think they deserve all they get and even the 25 year retirement thing too.
one think you many miss in the media and here, the “mooks” Anon talks about are the loudest and thier pull runs DEEP. too deep. but there are many good ones out thier doing the dirty work. it a dark job being a city cop and they have to deal with the depths of the darkest most disturbed humans hours upon hours a day and the be able to go home to their family and try to be “NORMAL”.
i can say my mental couldnt handle that.
Its interesting when the veil of political correctness that was carefully designed by societal institutions controlling the flow of information is lifted by real life experiences.
And I feel really bad for your AA friend and understand his animosity: he knows he is lumped with the bad ones.
“But I thought the upper bracket areas were doing so well? No price declines in cities like Kenilworth, Hinsdale, Oak Brook etc?”
Sabrina,
As I mentioned on previous posts, the only people who are willing to take lower prices in these areas are:
1. People who are very rich and taking the 500k loss is not going to affect their lifestyle at all.
2. People who are posers and never could really afford houses in these areas. These people HAVE to sell
3. People that bought over 20 years ago and are still making a profit (even though the value of their houses dipped in the past 5 years).
The rich are different than normal people – their threshold to take a loss is much lower than most people.
“And I feel really bad for your AA friend and understand his animosity: he knows he is lumped with the bad ones”
i dont think its a veil per se, more as a vernacular and a mind set jammed upon him by his coworkers and workplace culture.
give i wont disagree the point your going for is not a factor, i know it is.
“their threshold to take a loss is much lower than most people.”
Their willingness to take a loss you claim is much lower. This is your opinion. Their ability to take a loss is much higher. This is a fact.
“more as a vernacular and a mind set jammed upon him by his coworkers and workplace culture.”
Yeah it has nothing to do with the citizens he interacts with on his beat and what he sees and deals with on a daily basis. Sure.
Clio, so there will or will not be price declines in nicer areas?
“Their willingness to take a loss you claim is much lower. This is your opinion. Their ability to take a loss is much higher. This is a fact”
No, Bob – you misread what I said – we are both on the same page. I said that their THRESHOLD to take a loss is much lower = they are much more willing and able to take a loss that most people.
“Clio, so there will or will not be price declines in nicer areas?”
While there might be a desperate seller or two in nicer areas, overall prices are NOT going to decline. Again, prices in nicer areas may be off their 2006 highs, you will see them steady and start trending upward. This is very important to watch (even if you are not buying in these areas) because it is the first sign that the market is coming back.
The pay for police is not out of line, though, like all other city employees, they should get no raises during this troubled period. This is one of the nastiest, roughest jobs in the world, and I’m glad we can even find people to do it. I wouldn’t do it and COULDN’T do it for any kind of paycheck, and that goes for certain other blue collar jobs, like firefighter or rail operator, that are extraordinarily rough and dangerous, and also entail a lot of responsibility. A cop takes his life in his hands every time he walks up to the driver’s window of a car he stops.
I could not drop police and firefighter pay, which has risen only slightly in the past decade, while our aldercreatures voted themselves a 20% increase a couple of years ago and now make $110K a year.
There is no way I could support a pay reduction for our police after watching our 50 AlderScum vote themselves a 20% pay hike a few years back. What have THOSE mutts done for us lately, except bankrupt the city by massive diversions of money from the public payrolls to the back pockets of crony developers and large corporations via TIF districts and other tax funded “gimmes” for the powerful and connected? Pay for ALL public servants should be frozen, and in the case of pols who’ve gotten 20% pay hikes, rolled back. These people should definitely share the pain of the public that pays their wages, as salaries and wages for private-sector employees have dropped 1% over the past decade.
But if we really want to balance the budget and maintain essential municipal services and critical infrastructure at decent levels, then we absolutely must stop the diversion of hundreds of millions of dollars in present and future tax revenues from bonafide public purposes such as police and fire protection, public transit, and critical water and sewer infrastructure to private purposes. Things like $200M to renovate Wrigley Field for the benefit of rich team owners, and a RIF for the 49th Ward, or any other subsidies for any other private business or private purpose, should be off the table.
However, it’s useless to talk about how some blue-collar people get paid more than some folks with college degrees. Don’t blame the unions- certain blue-collar jobs have ALWAYS paid well, even at the beginning of the industrial age- read Adam Smith’s Wealth of Nations for insights on why blacksmiths in 18th century England made more money than “pedagogues”. Shall I pay an employee with no skills, no tolerance for rough jobs, and oftentimes doesn’t even have decent reading and communication skills, let alone any real professional qualifications, a premium just because she or he got a degree in something like sociology or English Lit or some other impractical, elitist field, and at some laughably light-weight diploma mill of a school? I meet hundreds of people like this. Even among professionals such as lawyers, there is a wide variation in competence and basic ability, not to mention a significant glut of qualified people.
“Shall I pay an employee with no skills, no tolerance for rough jobs, and oftentimes doesn’t even have decent reading and communication skills, let alone any real professional qualifications, a premium just because she or he got a degree in something like sociology or English Lit or some other impractical, elitist field, and at some laughably light-weight diploma mill of a school? I meet hundreds of people like this.”
I am not talking about the useless degrees set. I am talking about lawyers who went through 19 years of education, passed a bar exam, and are compensated significantly less than someone who invested far less in their training for their career but works on a garbage truck, for instance.
“Shall I pay an employee with no skills, no tolerance for rough jobs, and oftentimes doesn’t even have decent reading and communication skills, let alone any real professional qualifications, a premium just because she or he got a degree in something like sociology or English Lit or some other impractical, elitist field,”
Bob, have you hacked into Laura’s account?
“I am talking about lawyers who went through 19 years of education, passed a bar exam, and are compensated significantly less than someone who invested far less in their training for their career but works on a garbage truck, for instance.”
bob, the value of a person in is determined by what we are willing, as a society, to pay them. All of those other factors (education, training, etc.) don’t matter. It is the EXACT same in real estate. The price of a house is what someone is willing to pay for it. It doesn’t matter what the previous owner paid for it, etc.
It is funny and ironic because you always are saying how you wouldn’t pay for someone else’s mistake (in real estate). The same could be said by a garbage truck driver when talking about an attorney. What great sweet irony!!!
“Yeah it has nothing to do with the citizens he interacts with on his beat and what he sees and deals with on a daily basis. Sure.”
But but i dod agree with you and said it is a factor look above i said this;
“given i wont disagree that the point your going for is not a factor, i know it is.”
“the “mooks” Anon talks about are the loudest and thier pull runs DEEP. too deep. but there are many good ones out thier doing the dirty work.”
Yep. The majority (probably the overwhelming majority) of the force are good peeps, most of whom have good reason not to stand up to the mooks, since that’s who control too much of the department. But it’s the mooks who set the public’s expectation of how cops act, since you never know who is and who isn’t (which the cops *must* understand, as it’s their (correct, as far as it goes) explanation for much of their hassling based on appearance–never know which one wants to lay the beat down on you).
“never know which one wants to lay the beat down on you”
hahaha, i dont blame a good noob with out family or connections trying to make detective not standing up to the “mooks”.
I also can understand a good guy not speaking up either as he doesnt want to get labeled “that guy”. and even if he transfers it wont matter he will still have his label with him even if he transfers again to a burb. mooks can reach pretty far.
“But I thought the upper bracket areas were doing so well? No price declines in cities like Kenilworth, Hinsdale, Oak Brook etc?”
Unfortunately, I wasn’t the one advancing that argument.
I was however advancing the argument that the city is a ripoff as compared to the best suburbs in the region. I use one particular suburb because it is known to be among the most expensive and exclusive historically — if it rates highly on price to value as compared to the city, then presumably more moderately priced suburban locations with excellent school districts and stable residential bases are even better. I do understand it’s not for everyone, or even most people. But, these properties are at the lower end of the housing stock and are screaming bargains versus the crap that is listed (and even sold) in the city. As Groove will attest.
Again, it is a relative value argument. I am also quite certain that the New Trier township public employees pensions will not drive a 50% property tax increase either. It seems the other shoe is on its way down (for Chicago). Good luck to city tax payers when that one hits.
“I know someone right now looking in Beverly because he works in Northern Indiana and his wife works downtown and the commute from Lakeview every day is killing him.”
I know someone who works in Lake Forest, no way they would live in Munster. Glad we agree on this one.
“I was however advancing the argument that the city is a ripoff as compared to the best suburbs in the region.”
For family life, absolutely. Which is why so many condo owners are going to get burned.
People purchased condos in the city thinking they’d flip and move on. Then they discover city living isn’t exactly compatible with a good family environment if you’re a yuppie but not quite rich.
Whats insane is GZ (and the GZ is essentially a post-collegiate meet/meat market) valuations spilled over into ‘hoods and property types that most people that live in the GZ would NEVER consider. These owners are in for a bit of a shock in the coming years if they need/want to sell and believe their neighbor who sold in the last decade got $X so they should be entitled to, say, .8X. Not gonna happen. Try .33x as a baseline.
“But, these properties are at the lower end of the housing stock and are screaming bargains versus the crap that is listed (and even sold) in the city. As Groove will attest.”
I a will attest they are bargains and a good entry to a area that has been unattainable (realistically). but the taxes there are just way to INSANE and will not be going down only up. and averge family can buy a house in keni but will not be able to “live there”. i know you get top schools but other burbs have top schools and less INSANE taxes.
but i shall not agree to the vs. “crap in the city” there are many listings in chicago that are great and great areas to live. the sheeple here at crib chatter dont expand the mind outside the little pockets repeated over and over here.
“but the taxes there are just way to INSANE and will not be going down only up.”
Yes, but not as much as Chicago. Really and truly, Daley is battling a 60% increase legislated by Springfield and sitting on the governor’s desk. This is real stuff guys.
“the sheeple here at crib chatter dont expand the mind outside the little pockets repeated over and over here.”
True and by city I was really referencing green zone. Inhabited by many of the same people who sarcastically ask, “where is Park Ridge?”
“Yes, but not as much as Chicago. Really and truly, Daley is battling a 60% increase legislated by Springfield and sitting on the governor’s desk. This is real stuff guys.”
Dunno why you think the $550m would come all from property tax. Only about 75% of the current contributions come from property taxes.
“Dunno why you think the $550m would come all from property tax. Only about 75% of the current contributions come from property taxes.”
Well, probably because 75% of 550M = 60% increase?
City of Chicago tax extension = $750M
75% of $550M = $412.5M
$412.5M / $750M = 55%
The rest is rounding because 75% isn’t an exact figure.
“The rest is rounding because 75% isn’t an exact figure.”
Fair enough.
But:
1. doubt that that will carry through exactly.
2. City’s levy (2009) is 19.17% of the total tax bill. So it’s a 12% increase in taxes, not 60%.
Yes it will. It is the law, assuming Quinn signs it.
Who said anything about the total tax bill? The discussion was Chicago versus other towns in Cook County. From a tax perspective, living in Chicago is 60% higher versus towns that don’t have a pension increase (or only a de minimis one as most in NT township have stayed on top of funding).
12% is still pretty devastating to a lot of people in any event. And that is before any other tax increases for all the other city services that are under funded. You could see a 20% total tax increase easily once CPS weighs in.
The federal government will bail us out.
Oh by the way, those of us who know something about pension accounting and minimum required funding contributions (sadly for me) know that the reason so many pensions are underfunded is because the discount rates dropped dramatically as part of the QE1/2 process. Unintended consequences galore.
Inflation. Know it. Love it. Paradoxically, it is the answer to a lot of our problems.
So HD, you might actually be right.
JMM in all seriousness, I don’t see pensions growing through inflation, I see them defaulting. As I say, IL has a day of reckoning coming….maybe next year, maybe 2020, but it will stop paying pension or severely curtail them to the detriment of current pensioners.
And nobody is going to feel sorry for them or have the political will to bail them out.
See United Airines earlier this decade.
There is nothing unusual about a plan sponsor freezing accruals. Practically every private sector company with a significant plan has done so. Why should municipal workers get a free pass?
My comment on inflation is to suggest that the manner in which liabilities are calculated is highly (almost solely) influenced by choice of discount rate. The IRS segment rates have tanked, artificially, through QE1/2. This is why these liabilities are all of a sudden so massive (now that the equity markets have largely recovered).
This is all fine and good, but now these Bernanke-driven funny money discount assumptions (not grounded in reality) have real consequences for Chicago taxpayers. Shame on the half wit state reps who passed this garbage legislation.
I meant not carry thru as in the increase won’t be funded exactly the same way as current contributions, but that wasn’t clear.
On the blaming QE2– so you’re saying that the police and fire pensions were 100%+ funded until this fall? And, if not, what was your point then?
On who was talking about total bill, everyone except you, and your parsing is pointless, as plenty of other towns (Evanston, for example) have comparable percentage holes, just not nearly as large of a nominal total.
“as plenty of other towns (Evanston, for example) have comparable percentage holes, just not nearly as large of a nominal total.”
The tribune just did a big story on how many of the suburbs have the same problem as the City of Chicago, including some on the north shore- massively underfunded police/fire pensions. This is NOT a new phenomena. It started a decade ago so it wasn’t caused by the recession, but it was worsened by it. Taxes are going to go up all over Chicagoland, and services down, to try and cover the difference.
“On the blaming QE2– so you’re saying that the police and fire pensions were 100%+ funded until this fall? And, if not, what was your point then?”
Something that was 90% funded last year might now be only 75% funded due solely to a change in discount rate assumptions (IRS segment rates). If you knew how it worked, you’d know what my point was.
“On who was talking about total bill, everyone except you, and your parsing is pointless, as plenty of other towns (Evanston, for example) have comparable percentage holes, just not nearly as large of a nominal total.”
OK, enlighten me. Please provide support for the Evanston point. I am fairly certain they are 60% under funded as a percentage of their tax levy.
“The tribune just did a big story on how many of the suburbs have the same problem as the City of Chicago, including some on the north shore- massively underfunded police/fire pensions. ”
Meant to say not 60% under funded as a percentage of the tax levy.
Also, please support the massive underfunding point above.
“Something that was 90% funded last year might now be only 75% funded due solely to a change in discount rate assumptions (IRS segment rates).”
So the Chicago Police and Fire retirement funds were 90% funded last year? Is that what you’re saying.
“Inflation. Know it. Love it. Paradoxically, it is the answer to a lot of our problems.”
And the Fed can’t induce it as credit and lack of demand is holding it back the velocity of money. So congress does a back door stimulus in the form of a 2% payroll tax reduction next year to try to get inflation kickstarted. We shall see.
JMM and ANON,
both you guys know way to many details that casual reader and closet skeptics never catch. and one knows way to many details in other areas that an average friendly spiderman couldnt remember(or google up).
i do say dear sir(s) that your income to provided with the great hoods you live is 100% earned even if half your productivity is wasted on this play space.
“So the Chicago Police and Fire retirement funds were 90% funded last year? Is that what you’re saying.”
No, actually it was probably around 50%. The comment was illustrative of the difference between A and B and how a single assumed factor, discount rates, impact funding levels. Funding levels trigger legislative knee jerks, like this one. Yet assets have only gone up since last year.
I looked Evanston up. They are in pretty poor shape, but so is the town generally speaking. So perhaps that is a bad exmaple.
“So congress does a back door stimulus in the form of a 2% payroll tax reduction next year to try to get inflation kickstarted. We shall see.”
And worsens the funding status of yet another entitlement.
“I looked Evanston up. They are in pretty poor shape, but so is the town generally speaking. So perhaps that is a bad exmaple. ”
Or a good example, depending on which side of this discussion one is taking.
“Funding levels trigger legislative knee jerks, like this one.”
*This* is beyond dispute.
“And worsens the funding status of yet another entitlement.”
Already was going to need to dip into the general fund. Just takes us that much closer to forcing Congress to deal with it, so it’s not all bad.
By the way, the city levy for most suburbs is much lower than that of Chicago (0.89%). About 40% lower. And the overall levy rates in the surburbs are generally higher than that of Chicago (mid 5% range).
Some examples:
Wilmette = 0.58%
Park Ridge = 0.57%
Northbrook = 0.32%
Glenview = 0.36%
Winnetka = 0.68%
KW = 0.67%
Skokie = 0.50%
What is stopping them from reducing pension benefits? Isn’t that what happened in most private corporations? Are the Unions really that strong? Eventually, the city will go broke in some way or another, and the day of reckoning will arrive.
“What is stopping them from reducing pension benefits? Isn’t that what happened in most private corporations? Are the Unions really that strong? Eventually, the city will go broke in some way or another, and the day of reckoning will arrive.”
(Illinois) Constitutional interpretation. But it’s not as clear cut as Pat Quinn (protecting his personal interests, too) makes it out to be. Can’t take away what has already been earned, but it isn’t clear that you can’t take away anything that would be earned starting tomorrow–effectively terminating the plan.
“What is stopping them from reducing pension benefits?”
Law and political will. You cannot take away a benefit that has been promised unless the sponsoring agency itself is bankrupt or financially distressed. This could happen, but assuming it doesn’t, generally the municipality is on the hook.
You can however curtail certain non-guaranteed benefits and freeze accruals to current members. This is what most of corporate america as done or is doing and it is what municipalities should do.
The difference is corporations have shareholders who generally demand results. Electorates are complicated, are not profit seeking, and yes, I think they are somewhat more influenced by union groups. It is easy to distort a complex message, far harder to distort the bottom line (and sometimes illegal).
As a taxpayer, you haven’t earned the income until it’s in your pocket (cash-basis), so who cares. Let’s terminate all the plans tomorrow.
“effectively terminating the plan”
Really freezing the plan.
Termination relieves the liability completely and puts it to PBGC, which is another option.
Ok, I guess it’s better to freeze the plan. Also, can’t we raise the retirement age to 65?
” Let’s terminate all the plans tomorrow.”
Similar logic to let’s all default on our mortgages tomorrow because the payments are in the future. A pension plan is a promise to pay. Promises like that can generally only be broken in bankruptcy.
Eliminating future benefits however has a profound impact. Look at municipal salary increases and the games that get played near retirement and you can see how much liability could be increased by freezing it all now.
But the day of reckoning must come – accounting tricks and shenanigans cannot continue for ever. Enron was solvent until it wasn’t.
I’ve even heard unfounded rumors that the IL teacher’s pension has been earning income from selling CDS (credit default swaps) to try and make up for stock market losses. I don’t know if that’s true but some blogger was analyzing the fund’s statements and came to the conclusion that the only way it could be achieving it’s current returns was to sell swaps. Amazing if it’s true.
“Really freezing the plan. ”
Yeah. Freeze.
“Termination relieves the liability completely and puts it to PBGC, which is another option.”
Doesn’t apply to state/municipal plans. I’ll eschew the snark.
Ok, puts it to nowhere. Even better, in my view.
Per this Winnetka (and other Ill munis) sets it’s own assumed earnings (aka discount rate) for its pension funds:
http://triblocal.com/winnetka-northfield/2010/12/20/winnetka-lowers-tax-levy-by-cutting-fire-and-police-pension-funding/
So, funding gaps aren’t created by changes in Fed policy.
Was this snatched by a CCer? As of now it’s under contract, looks like it happened on 12/13, only a few days after this post and the last day of heavy activity for comments(albeit unrelated). I’m curious to see how much/if this closes.