Rahm to put final budget to bed then confront the 'elephant in the room'

Mayor Rahm Emanuel on Wednesday will put his $10.7 billion feel-good final budget to bed then get ready for a stare down with what the Civic Federation has called the "enormous elephant" in the room.

On Dec. 12 , Emanuel has promised to lay out "options" to slay or, at the very least shrink, the elephant: a looming, $1 billion spike in pension payments.

The solution the mayor seeks is almost certain to include $10 billion in "pension obligation bonds" tailor-made to minimize the need for another punishing round of post-election tax increases.

Never mind that the Wall Street credit rating agency Standard & Poor's has warned pension obligation bonds "in environments of fiscal distress or as a mechanism for short-term budget relief" could threaten Chicago's BBB+ bond rating.

After a five-year ramp to actuarial funding ends, Chicago taxpayers will be on the hook to keep city employee pension funds on the road to 90 percent funding.

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