Mayor Rahm Emanuel’s $7.3 billion budget — and the $62.4 million in tax increases needed to pay for it — sailed through the City Council Wednesday, setting the stage for a post-election property tax increase.
The vote was 46 to 4. No votes were cast by mayoral challenger Bob Fioretti (2nd) and three of his Progressive Caucus colleagues: Aldermen Toni Foulkes (15th), Scott Waguespack (32nd) and John Arena (45th).
“Are we trying to bring Chicago together or are we trying to further divide the haves and have-nots?” Fioretti said Wednesday in an attempt to saddle Emanuel with the “Mayor 1 Percent” label he is trying desperately to overcome by championing affordable housing and a Chicago-only increase in the minimum wage.
Decrying the mayor’s decision to substitute runaway police overtime for additional hiring, Fioretti said, “This budget does not do enough to make our streets safe and our neighborhoods strong and does not bring Chicago together. This budget does not give us a roadmap to long-term financial security. It continues to use long-term bonds to fund operations and pushes the burden of payments on our children.”
Foulkes argued that there is a “huge population that needs help” and is not getting it under Emanuel, including city retirees who face sharply higher health insurance premiums.
For all the talk of holding the line on property, sales and gasoline taxes, Arena argued that Emanuel has still decided to “reach into the pockets of taxpayers even deeper with fees, fines and taxes” — to the tune of $62.4 million in 2015 alone. That’s on top of three straight years of the same.
During a debate that dragged on for nearly two hours, mayoral allies rose to refute the “Chicken Little, sky-is-falling” critics who, for the first time in four years, did not bother to introduce a single budget amendment.
“A rubber stamp ‘no’ vote is just as bad as a rubber stamp ‘yes’ vote,” said former independent Ald. Joe Moore (49th), now one of Emanuel’s staunchest City Council allies.
Sounding at times like they were reading from scripts orchestrated by the mayor’s office, Emanuel’s allies touted investments in early childhood, after-school and summer jobs programs and boasted of infrastructure projects going on in every one of the city’s 50 wards.
They talked about the mayor’s added commitment to tree-trimming, tree planting, graffiti removal and pothole-patching services Chicagoans hold dear and about the decision to use $100 million in annual police overtime instead of saddling the city with fixed costs it cannot afford.
“Adding police officers would be a wonderful thing, but it is a luxury we cannot afford,” said Ald. Pat O’Connor (40th), the mayor’s City Council floor leader.
After the vote, Emanuel rose from the rostrum to tout what he called the financial turnaround he has engineered.
“This is a different day than where we were when we all got elected. We’re not where we need to be. But we’re definitely not continuing the past practices that got us into the problem. We have reformed ‘em. We didn’t do it in a way others have suggested — by slashing the budget indiscriminately or raising taxes across the board on everybody,” he said.
“This is a tough budget. We didn’t defer. We didn’t delay. We didn’t deny. We were honest with people. And our work is not done.”
On that point, Emanuel is in agreement with another mayoral challenger, County Commissioner Jesus “Chuy” Garcia. Garcia accused Emanuel of crafting a budget that will get Chicago “past the spring,” but no longer than that.
“This was the most creative budget that could be created to make it look like there’s a sense of stability. Do I buy that? No. There’s gonna be a lot of bad news next year. We’re gonna have to make some really tough decisions,” he said.
By December 2015, the City Council must decide whether to raise property taxes — or find other new revenues — to fund a state-mandated, $550 million payment to shore up police and fire pension funds.
For now at least, Emanuel will campaign for re-election on a budget that raises taxes on everything from parking and vehicle leasing to cable television and stadium skyboxes.
The targeted tax hikes would have been greater if aldermen hadn’t already done the heavy lifting — before gearing up for re-election.
In late July, aldermen approved a 56-percent increase in the monthly surcharge tacked on to telephone bills to meet the city’s increased obligations to the Municipal Employees and Laborers pension funds.
That allowed the mayor to cancel his plan to raise property taxes by $250 million over five years and honor a promise made to Gov. Pat Quinn in exchange for the governor’s signature on the Chicago pension reform bill.
On Wednesday, Emanuel once again refused to say how the city would meet those rising obligations going forward, when the telephone surcharge will fall short, or how he will meet the city’s crushing obligation to police and fire pensions.
Civic Federation President Laurence Msall said the amount of pain that Chicago taxpayers face after the election will depend on decisions made in the coming months by Gov.-elect Bruce Rauner and the Democratic-controlled Illinois General Assembly.
“The newly elected governor has to decide whether he’s going to save any portion of the local government share of the state income tax that remains in effect or if he will assist in saving Chicago’s police and fire pension funds in a manner that does not overwhelm the city’s precarious financial condition,” Msall said.
He added, “This budget is a short-term answer to the city’s immediate financial situation, but it does not provide long-term stability without further action in Springfield on pensions and identifying additional revenue or taxes that will be needed to stabilize this government.”
Msall said there is the potential for significant savings by consolidating Chicago’s police and fire pension funds into the state’s pension system. He noted that the state created “more generous pension benefits” for suburban and downstate police officers and firefighters than it did for their counterparts in Chicago.
But new revenue will be needed even if the pension funds are consolidated, he said.
“Future revenue could come from either the state by returning to sharing with local governments the historic proportion of any new tax increases, or it will have to come from local governments, primarily through property taxes,” Msall said.
“It is hard to see how you’re going to be able to reform and stabilize police and fire pension funds without reform and additional revenue from either the city or the state of Illinois” or both.
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