Last year, Chicago grew by 82 residents. An amazingly low number when you consider that a city of 2.723 million residents should have produced at least 35,000 babies. That's assuming that Chicago matches the average birth rate in America which stands at 1.3% of the population. By only growing by 82 residents, the city actually lost more than 35,000 people in one year's time.
Steeped in pension debt, Chicago is trying to bail itself out through higher taxes and not through real pension reforms. The more the city taxes its residents, the more they will leave, and those leaving are generally those who can afford to move somewhere else; resulting in a city with an increasing percentage of poor and low income residents. Thus, tax hikes tend to fall short of their projections; leaving the City to find even more things to tax.
This is a death spiral. Chicago, just like now-bankrupt Detroit, saw its peak population in the 1950's. After years of Democratic control, Chicago, like Detroit, gave away generous pension benefits and early retirement to too many of its city workers. Now, there are not enough revenues to cover the mistakes of the past.
Last year, the City slapped a 9% tax on all business and residential telephone services and, all indications are, the projected revenues will fall short. Really? Chicago just lost 35,000+ residents who took their phones and spending elsewhere.
So, now, they have come up with a new tax revenue scheme: the so-called 'Netflix' tax. In actuality, its part of a 9% tax on all amusements which has now been amended to include streaming Internet entertainment video services like Netflix and Vudu, and a higher tax on cable television (which had previously been 3%). In addition, the City's parking tax has been upped from 20% to 22% during the week, and on the weekend, the tax is raised from 18% to 20%. The tax on leased vehicles has also been raised from 8% to 9%. Also, skyboxes at the City's stadiums will be hit with the 9% tax. Some might not find all these new amusement taxes very amusing and just decide to call someplace else home.
It's just a matter of time before Chicago has nothing left to tax and not enough people to collect those taxes from. The pension problem just get bigger as more workers retire and live longer; while the City's tax base gets increasingly smaller. Surely, this is exactly Einstein's definition of insanity: Doing the same thing over and over again and expecting a different result. I smell bankruptcy. Don't you?
Finance Committee approves Emanuel's $62.4 million tax package: http://chicago.suntimes.com/politics/7/71/154153/finance-committee-approves-emanuels-62-4-million-tax-package
Chicago finds new tax stream: Netflix, Spotify, online gambling: http://money.cnn.com/2015/07/02/media/chicago-streaming-tax/
Chicago's Population Grew by Only 82 Residents in One Year: Census: http://www.nbcchicago.com/news/local/Chicagos-Population-Growth-Slows-Dramatically-304555131.html
Chicago and Detroit's Declining Populations: Chart: https://karlheubaum.files.wordpress.com/2013/02/chicago-and-detroit-populations.png?w=625 Source article: http://karlheubaum.com/2013/02/10/chicagos-declining-population/
Five Reasons Chicago Is in Worse Shape Than Detroit: http://www.bloomberg.com/news/articles/2015-05-13/how-chicago-city-of-junk-just-moved-a-little-closer-to-detroit