Rahm Emanuel has an albatross. The ambitious mayor of Chicago might have big plans to revitalize a city that needs infrastructure improvements and education reform, but his most pressing concern is much less alluring: The billions of dollars in debt and unfunded pension liabilities that will soak up Chicago’s revenue.

Chicago owes almost $14 billion in outstanding general obligation bond debt, and the city’s pension funds owe $19.5 billion in unfunded obligations to police, firefighters and municipal employees. Combined, the Chicago Tribune reports the Second City owes more than $33 billion.

(Source: Chicago Tribune)

That’s more than four times the nearly $7 billion the city spends every year. And it doesn’t even count the unfunded pension liabilities Chicago Public Schools and other city-affiliated agencies owe.

Decades of city government spending means that in 2039, Chicago will still be paying off bonds from 1993. Some of those repayments, the Tribune said, will be for debts on public housing developments that were torn down more than a decade ago. Generous pension contracts signed without allocating future money means the police union’s pension fund has just 31 percent of what it will need to pay out future liabilities; the firefighting union has just 25 percent of the money it needs.

Already this year, two ratings agencies have downgraded Chicago debt. In July, Moody’s wrote it was downgrading Chicago’s general obligation and sales tax bonds, a reflection of “Chicago’s very large and growing pension liabilities and accelerating budget pressures associated with those liabilites.”

“The current administration has made efforts to reduce costs and achieve operational efficiencies, but the magnitude of the city’s pension obligations has precluded any meaningful financial improvements,” Moody’s wrote.

Last week, Fitch downgraded Chicago’s debt worthiness after the Illinois legislature couldn’t pass a budget fix. In a statement, Emanuel again called on the legislature to reform the state’s pension rules.

Those ratings have a real-world impact: Lower ratings mean higher interest rates on current and future debt. Already, the city is paying more interest than it is repaying principal on general obligation bond debt. But those extra payments pale in comparison to the money the city has already allocated — and now owes.

“The net result over time, as City Hall deepens its liabilities yet delays retiring them, has been a massive theft of wealth in dollars by the billions: government leaders robbing their children and grandchildren, the putative taxpayers of tomorrow,” the Tribune writes in an editorial today. “If, that is, those young people stay in Chicago.”

Before Emanuel gets to his most ambitious agenda items, he’ll have to deal with the legacy of decades of other politicians’ spending decisions.