#DoTheMath ยท Plain-English Edition

Does Joliet own more than it owes?

It's the same question you'd ask about your own household. Here's Joliet's answer in plain numbers, and why the city's own books already show it owes more than it owns.

Every figure comes from the City of Joliet's own audited annual reports.

The 30-second version

Does Joliet own more than it owes?

−$1.24B
What the city's books already show
On the books (net financial position)−$1.24B
Estimated repair bill (not on the books)−$1.4B
Closer to the real picture≈ −$2.7B

The first number is already printed in the audit. Keep scrolling for how both are built, in plain English.

Start at the kitchen table

Add up your family's finances: everything you have that's basically money (checking, savings, investments) minus everything you owe (cards, car loan, mortgage). What's left tells you whether you're ahead or behind.

What you own
Cash, savings & investments
What you owe
Loans, cards & other debts
=
Where you stand
Ahead, or behind

A city has this exact number too; accountants call it its net financial position. Almost no city advertises it, so we did the math from Joliet's own report, and split it per household, because a billion dollars is impossible to picture but a per-home figure isn't.

What the books show

Joliet is behind, and its own books show it

−$1.24B

Joliet owes about $1.24 billion more than it holds in money-like assets. That figure isn't hidden or estimated; it's taken straight from the city's own audit.

Split across every household in town, that's about −$24,300 owed per household.

But doesn't the audit say net position is only −$25 million?

It does. The official "total net position" is about −$25 million. But it gets there by counting roads, pipes, and buildings (about $1.2 billion) as assets. The city can't sell those to pay pensions or bondholders. Net financial position is the stricter, more honest test: the money the city actually has, against what it owes, and that's −$1.24 billion.

$0 Pensions added Health care added โˆ’$51M 2011 โˆ’$66M 2012 โˆ’$72M 2013 โˆ’$82M 2014 โˆ’$459M 2015 โˆ’$502M 2016 โˆ’$542M 2017 โˆ’$882M 2018 โˆ’$933M 2019 โˆ’$998M 2020 โˆ’$988M 2021 โˆ’$1.07B 2022 โˆ’$1.16B 2023 โˆ’$1.24B 2024
The shortfall, year by year. The two big drops aren't new spending. They're two accounting rules that finally put old promises on the books: pensions in 2015 and retiree health care in 2018. Notice the years before 2015: the books looked almost healthy.

But that is only part of the picture.

What the $1.24 billion is

Mostly promises: to retirees and to lenders

The shortfall isn't a mystery overspend. It's three real obligations the city has taken on, all owed to real people:

Retiree health care the city has promised police, firefighters & staff (OPEB)
~$500M
Pensions for police, firefighters & other staff, not yet funded (net pension liability)
~$390M
Debt: bonds and water & sewer loans (the Lake Michigan program is the big future borrowing)
~$450M

These are promises made over decades, to people who did the work or lent the money. The debt was always on the books; bonds and loans always show up. The striking part is the other two pieces: until a few years ago, the pension and retiree-health promises, together by far the largest, sat nowhere on the city's balance sheet.

We've seen this before: why it appeared so suddenly

In 2015 a new accounting rule forced cities to put their full pension promises on the books. In 2018 another rule added retiree health care. Tens of billions appeared overnight across the country: debts that had always existed, suddenly visible. Before those rules, Joliet's books looked like a healthy city's: assets around four times its liabilities. The money was always owed. The rules just made Joliet show it.

What the books still don't show

One cost the books still leave out

Even after pensions and retiree health care, one real cost is still missing from every statement: what it would take to fix worn-out roads, pipes, and buildings.

Joliet's audit already admits the wear: about 37% of the value of its roads, pipes, and buildings is used up. It just never totals what fixing all that would cost. Run the city's own two numbers through the Strong Towns worksheet and the replacement bill comes to an estimated $1.25 to $1.6 billion.

Show the math
What Joliet's infrastructure cost to build
$1.93B
How much is already worn out (what the audit calls "accumulated depreciation")
$712M
But that's in old dollars. Building costs have roughly doubled in 20 years, so restate it to today's prices…
×~2
Estimated repair bill the books don't show
$1.25B–$1.6B

Per household, that's another $24,000 to $31,000, on top of what's already owed.

This is a back-of-the-envelope range, on purpose. The point isn't the exact figure; it's that the figure is large, and nobody publishes it.

Put them next to each other

Together, about $50,000 per household, hidden behind a headline that looks balanced.

โˆ’$24,300 ALREADY OWED, per household the part the books already show $24Kโ€“$31K DELAYED REPAIRS, per household on no statement, anywhere
Same households. One number the city reports, one it doesn't, and both point the same way.

A typical household is already $24,300 behind, with another ~$28,000 repair bill that no statement shows.

Joliet's official bottom line looks nearly balanced. These two bars are what that headline leaves out, and what residents are left to carry.

This is difficult, but it's a to-do list.

A −$1.24 billion position is a hard starting point, harder than most cities face. But Joliet isn't an outlier: the pension and retiree-health gaps are shared across Illinois, and much of the debt is the essential ~$1.45 billion Lake Michigan water project, replacing an aquifer projected to fall short by 2030. The point isn't blame; it's that a number you can see is a number you can plan around.

Joliet has real assets too: a large economy, a rising tax base, and that water investment. Whether they become a way out or a deeper shortfall depends on the kind of growth the city chooses, the next question. And every new subdivision, road, and pipe is another maintenance promise owed forever. So the city faces two jobs at once: funding what it already owes, and weighing the long-term cost of anything new.

The asks

Ask Joliet for three things: fund the pension and retiree-health promises on a real, published schedule; publish a "state of good repair" number every year (what it would cost to bring what we already own back to good condition); and weigh every new commitment against what's already owed. Federal agencies must publish that repair number. New York City's charter requires it. Joliet can too.

Say it this way

"These figures come from Joliet's own published reports. The city publishes no single estimate of its delayed repair costs. If this picture is wrong, the city should publish the numbers that show it."

The objection worth taking seriously

"Can't we just grow our way out?"

It's the most natural response to these numbers: we're behind, so let's expand the tax base. Attract development, add warehouses and housing, offer incentives for new business. If the city were simply short on income, that instinct would be right.

The short version: growth brings revenue now, but also new roads, pipes, and services to maintain for decades. It can't shrink the pension and retiree-health promises that make up most of the shortfall, and Joliet's incentives often divert the new revenue anyway. It's worth doing, but only the kind that covers its own long-term cost.

Read the full answer

But the shortfall isn't mainly an income problem, and growth isn't free money. It's the one move that brings cash now and bills forever, which is exactly why it has to be done carefully. Three things make "aggressive, subsidized growth" an unreliable fix here.

First, the shortfall is mostly promises growth can't touch. Most of the −$1.24 billion is pensions and retiree health care already owed to people who worked for decades. A new warehouse doesn't shrink that by a dollar. What it adds is new roads, pipes, and pavement to maintain for decades, and if the city staffs up to serve it, new pension and retiree-health promises of its own. Growth can add to the liabilities it's meant to reduce.

Second, incentives divert the revenue they promise. Joliet already runs at least six "tax-increment financing" districts, a common growth incentive, plus similar deals. By design, those capture the new tax growth and spend it inside the district, often for two decades or more. So subsidized development frequently never reaches the city's general budget or the pensions while the incentive runs.

Third, Joliet has already grown a lot. Over the last decade it became one of the country's largest logistics hubs, with a fast-rising property and sales tax base. Even so, the financial position fell over those years, from −$82 million to −$1.24 billion, much of it as pension and retiree-health promises came onto the books. A bigger tax base didn't come close to offsetting a legacy bill that size.

And won't the jobs pay off? Jobs are a real benefit to workers and the regional economy, but the path from jobs to city revenue is looser than it sounds. Property tax tracks the value of buildings, not the number of jobs, and of each tax dollar the city keeps only a minority, with school districts taking the largest share. Illinois cities can't levy a local income tax, so paychecks don't flow to City Hall, and warehouses generate little local sales tax because they aren't retail.

The clearest way jobs lift city revenue is indirect: when workers become residents and add homes to the tax rolls, which also brings more residents to serve. And where an incentive is involved, much of the new property tax is diverted for years anyway. So jobs can be worth pursuing for the community without automatically improving the city's books. It comes back to the same test: what does the city actually keep, after incentives, against what it has to spend?

There's also a particular catch with the kind of growth Joliet attracts. Warehouses and freight yards generate property tax, but they rely heavily on public infrastructure: thousands of trucks a day, and a single loaded truck does road damage many times that of a car. They tend to bring low jobs per acre, high pavement per acre, and a public incentive to land them. It can still pencil out, but only if someone checks.

DOES IT PAY FOR ITSELF? Value it generates / acre Lifetime cost to serve / acre Downtown / Main Street mixed-use โœ“ Pays for itself Neighborhood infill & small business โœ“ Pays for itself Strip mall / big box (auto-oriented) โœ— Needs a subsidy Warehouse / freight (often subsidized) โœ— Needs a subsidy
Illustrative of the pattern, not measured Joliet parcels. Forms that produce high value on little infrastructure tend to pay for themselves; land- and pavement-heavy, often-subsidized forms frequently don't, once you count the roads, pipes, and services the city maintains forever. The fix isn't to rank these by hand, it's to run the math on each project. (Value-per-acre pattern documented by Strong Towns and Urban3.)
This isn't an argument against growth

It's an argument for growth that pays for itself. Incremental, tax-rich-per-acre development, the kind that fills in what the city already maintains, can genuinely help. Subsidized, infrastructure-heavy, low-yield development usually can't. The difference is arithmetic, not ideology.

The test to ask for

"Before we subsidize anything, show the math: over its full life, will this generate more than it costs the city to serve and maintain, and will it help fund what we already owe, or add to it?"

Anyone can start this conversation

You don't need a finance degree. The math is middle-school arithmetic, and every number is public.

A neighbor can raise it at a coffee shop. So can a city council member, a budget director, or a CPA who lives and breathes accounting rules. They'll all recognize the numbers, because the numbers are the city's own. That's the whole point: it's one number, at the kitchen table, that everyone can argue about together.