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Cook County, Illinois Treasurer Warns U.S. Homeowners And Retirees Of Local Debt Hazards

http://www.forbes.com/sites/larrybell/2012/12/18/cook-county-illinois-treasurer-warns-u-s-homeowners-and-retirees-of-local-debt-hazards/Originally appeared in the December 18, 2012 edition of Forbes.com

Maria Pappas has been Cook County Treasurer since 1998. Her office oversees the finances of the 19th largest government in the United States and collects more than $11 billion annually from property taxes on 1.8 million parcels. She served two terms as a Cook County Commissioner before becoming Treasurer.

While much public attention is directed to national, state and large-city debt issues, Treasurer Pappas warns homeowners and taxpayers to pay careful attention to mounting local public debt in their communities. She is in a solid position to know, having conducted studies of alarming debt conditions across her county’s approximately 2,200 taxing districts.

Larry Bell: Maria, over the course of our conversations, you have shared some very sobering realities and informative insights warranting serious consideration in bond issue voting, municipal investments, and retirement planning decisions. To begin, please give us a big picture of circumstances in your Chicagoland region that offer a general reference to local debt.

Maria Pappas: The picture isn’t pretty. Almost everyone’s focus is primarily upon finances of the federal or state governments. Few pay attention to local governments.

In May, 2012, the collective debt reported by the local primary taxing agencies in Cook County was more than $140 billion! To put that in context, the total debt-per-household in the City of Chicago was $87,720, and $35,774 in the suburbs. Since local governments cannot print money, they rely on property taxes as their main revenue source to operate.

Homeowners might be able to give their homes to their children, but that future generation won’t be able to afford to keep them because of the property taxes, which have doubled over a 10-year period.

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