The city of Chicago is facing some tough financial times.
Reem Nasr of CNBC writes that the city has unfunded pension liabilities that will only get worse over the coming years and a public school system that has a $1 billion deficit for the fiscal year 2016.
As Chicago's fiscal crisis becomes more pressing, chatter about the city being "the next Detroit" has gotten louder, CNBC writes on its website.
But CNBC talks to experts who say its premature to use the Detroit comparison.
CNBC reports:
"Detroit offers such a strong example of default and bankruptcy that Chicago ends up being impugned by comparison," said Matt Fabian, a partner at Municipal Market Analytics.
The broader economic and demographic positions of the two cities are vastly different. Chicago is the third-largest city in the country, with a vibrant economy and large, taxable population. Detroit had been suffering from a population exodus for decades, along with a crippled economy after much of the auto industry moved out.
"A property tax increase could solve Chicago's problems tomorrow," Fabian said. "But the city has chosen not to do that, even though it has the potential." Chicago could raise taxes by 50 percent and still have lower taxes than New Jersey, he said.
