Emanuel waiting for Springfield session to end before seeking new revenues

Mayor Rahm Emanuel said Wednesday he wants to see how the frenzied final days of the Illinois General Assembly’s spring session play out before asking the new City Council to begin the search for new revenue to solve the $30 billion pension crisis that has dropped Chicago’s bond rating to junk status.

“We’re in active discussions on a casino as a funding source to shore up” police and fire pensions, the mayor told reporters after a City Council meeting.

“Back in the spring of 2010, the Legislature . . . mandated a $550 million to $600 million property tax increase. Everything I’m doing is to limit the exposure of the public in that way. I want those things to play out to see where we are and make sure we’re in the best position.”

Emanuel described “good” behind-the-scenes negotiations on the casino that has eluded Chicago mayors for a generation. There are also “active conversations” on the state budget and new revenue, he said.

Under questioning, the mayor acknowledged that Gov. Bruce Rauner has established “working groups” of lawmakers and that it “can be frustrating” to reporters that the groups have been sworn to secrecy.

But Emanuel said he remains hopeful on what he once described as a “mega, mega-deal” that may include a sales tax on services, partial restoration of the expired increase in the state income tax, a Chicago casino and pension relief for police and fire and Chicago teachers.

“We’re now in the final two weeks before the end of the session. And as you know, this is usually the time — not just in Springfield, but with legislative bodies [everywhere] — when days are weeks and weeks are like months,” he said.

“There will be a lot of activity. I’m gonna be out there pressing the issues that are related to Chicago and its future [to make certain] Springfield does not make decisions at the expense of Chicago because there’s not a healthy Illinois without a healthy Chicago,” Emanuel said.

The Illinois Supreme Court’s May 8 decision to overturn state pension reforms placed Emanuel’s plan to reform two of four city employee pension funds in similar jeopardy.

That triggered a downward spiral that saw Moody’s Investors Service double-drop Chicago’s bond rating to junk status and do the same to the Chicago Public Schools and Chicago Park District. Two other Wall Street rating agencies ordered lesser drops.

Unless the General Assembly lifts the hammer, the City Council will have to decide by December how to make a state-mandated, $550 million payment to shore up police and fire pension funds. All told, the city’s deficit is approaching $1 billion.

Earlier this week, a municipal finance expert warned that Chicago and Illinois have a “revenue problem” and have not taxed to the levels that other municipalities have. The “revenue problem” can only be solved with a modest property tax increase — and a whole lot more.

The daunting task has some aldermen entertaining ideas they previously dismissed — like video poker, raising the city’s share of the sales tax and legalizing and taxing recreational marijuana.

In a pre-inauguration interview with the Chicago Sun-Times, Emanuel said he remains opposed to legalizing either marijuana or video poker.

He said he would much rather see a Chicago casino close to a convention and entertainment area, which people could avoid if they’re against gambling, than to see a video poker machine in scores of bars across Chicago.