Emanuel’s $8.2B budget, $50M revenue package clear first hurdles

SHARE Emanuel’s $8.2B budget, $50M revenue package clear first hurdles

The Chicago City Council | File photo

Mayor Rahm Emanuel’s $8.2 billion 2017 budget sailed through a City Council committee on Monday along with the $50 million revenue package needed to help pay for it and the mayor’s promised police hiring surge.

Hours after the Finance Committee approved the revenue package by an 18 to 3 vote, the Budget Committee signed off on the spending plan, too.

Aldermen then passed a sweeping management ordinance that includes a first-ever licensing requirement for pharmaceutical representatives to prevent the over-prescription of opioids. Despite a delayed effective date of July 1, 2017, Big Pharma strongly opposes that measure, calling it an “onerous” licensing requirement that would do “very little” to stop the epidemic of opioid abuse.

The management ordinance also includes a four-year extension of a controversial digital billboard agreement that, critics contend, shorts Chicago taxpayers.

Chicago aldermen have already walked the plank three times to help solve the city’s $30 billion pension crisis. Thanks to that $1.2 billion avalanche of tax increases already imposed, the 2017 budget is a political cakewalk.

In fact, the biggest question surrounding the annual spending plan is whether the mayor can deliver on his ambitious promise to hire 970 additional police officers over the next two years. But, that’s a question for another day.

The new bite out of taxpayers’ wallets is so comparatively small, there was no debate about any of the new taxes and fees. Instead, aldermen spent hours discussing Emanuel’s plan to create a $100 million “Catalyst Fund” to bridge the funding gap outside Chicago’s thriving downtown area.

“We’re creating a new entity for city money to be invested in a unique way,” said Ald. John Arena (45th), who cast one of the three “no” Budget Committee votes. “But, we need to make sure that, when we’re being creative with public dollars that we also have a commensurate level of oversight so we can make sure we can pull back from the brink if we’re going into investments that are unsound or it’s getting off track.”

Ald. Scott Waguespack (32nd) said he voted “no” because the Catalyst Fund has “no direct oversight” by the inspector general, the fund is “not subject” to Freedom of Information laws and its meetings are exempt from the Open Meetings Act.

The cornerstone of the $50 million revenue package is a 7-cents-a-bag tax on paper and plastic bags. It’s likely to leave consumers feeling nickeled-and-dimed because they will pay it every time they go to the grocery or any other Chicago store without reusable bags.

In addition to the bag tax, the revenue package would:

• Start charging drivers $14-an-hour to park in loading zones in three congested wards in or near the downtown area to raise $13.8 million.

• Double parking meter rates — from $2-an-hour to $4 — at 820 spaces around Wrigley Field. The new rate will begin two hours prior to the start of a game, concert or special events at those stadiums and extend for seven hours. The mayor’s plan to test the same “surge pricing” at 620 spaces around Soldier Field has been put off at the request of local Ald. Pat Dowell (3rd), who wants to see how it goes at Wrigley first.

• Install 752 new paid spaces: 374 of them in the Central Business District; 153 in the Loop; and 225 metered spaces in surrounding neighborhoods.

• Substantially increase parking rates at O’Hare and Midway Airports to generate $4.3 million in parking tax revenue for the city and $15 million more for the fund used to operate both airports.

• Get tough on suburban taxicab, limousine and bus companies that make frequent trips to O’Hare and Midway Airports without paying Chicago’s ground transportation tax. From now on, they’ll be required to pay a daily ground transportation tax of $3.50 on their first trip of the day to either airport.

• Require high rollers willing to cough up big bucks for tickets to sporting events and hit shows like “Hamilton” to pay a 3.5 percent amusement tax on the full value of the tickets, instead of a five or nine percent tax only on the mark-up of the ticket price.

• Apply the 9 percent amusement tax to tour boat operators.

• Authorize a lease-tax exemption for those who purchase annual memberships to the Divvy bike-sharing service.

For the second time in five years, the Finance Committee also authorized Emanuel to try again to lighten the load of a $91 million financial albatross: by refinancing debt tied to the city’s purchase of the old Michael Reese Hospital site to build an Olympic Village before Chicago’s first-round flame-out in the 2016 Olympics sweepstakes.

The promissory note with property owner Medline Industries still has $72.8 million in principal remaining.

Shortly after taking office, Emanuel refinanced the Michael Reese debt to save $14.5 million. A fixed interest rate of 7.5 percent was reduced to 5.95 percent.

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