Ducking financial reality in mayoral race

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The power of denial was on full display across Chicago on Friday.


Over at Cook County Circuit Court, four unions fought to block a new law that lowers costs on two of the city’s four grossly underfunded pension systems. If successful, the suit could drive a city already facing monstrous pension bills beginning this year over the financial cliff.

And over at the Sun-Times, we heard from the five mayoral candidates on the very same topic. Just how, the editorial board asked, would each candidate find the $20 billion needed to fully fund the city’s four retirement funds, a debt so large that all four funds risk going belly up within a decade or two?

A first massive down payment on that debt — a $1.1 billion bill for police and firefighters, on top of a projected $300 million city budget deficit — is due in just a few short months. This requires budget cuts and efficiencies of course, but also new revenue.

If anyone at that meeting Friday had a revenue solution that didn’t include raising property taxes or cutting benefits for the two untouched pension systems for police and firefighters, we were all ears.

We didn’t hear it.

In fact, we didn’t hear much of anything that was particularly useful.

Mayor Rahm Emanuel and William “Dock” Walls came closest. After much prodding and parsing, Emanuel acknowledged he has not closed the door on a property tax hike to pay down part of this year’s pension debt, though he said he would not raise property taxes to fund the city’s operating budget. He also supports expanding the sales tax base to include more services.

As for cutting benefits, it’s important to note that Emanuel was the architect, in collaboration with the majority of the unions in the city’s Municipal and Laborers retirement systems, of the law being challenged in court that cuts benefits for workers in those systems and commits the city to kick in substantially more money.

That law may very well be ruled unconstitutional, which will send the city back to square one. But Emanuel at least stuck his neck out to try to find a solution.

Activist and small business owner William “Doc” Walls also is open to a property tax increase as a last resort. He supports benefits cuts, even moving to a 401(k)-style pension for new hires, and supports expanding the sales tax base.

Cook County Commissioner Jesus Garcia says benefits can’t be cut for current workers, though he’s open to reduced benefits for new workers, and rejected nearly every proposal to increase revenue that’s been bandied about, including raising property taxes. He supports using tax-increment financing dollars, though he acknowledged it’s not a “panacea,” and possibly supports a Chicago casino. When asked what leverage the city might have to convince police and firefighters to make concessions on promised benefits, he said, “the leverage of reality. They also live in the city of Chicago … would they want to live with the implications of the huge budget cut that making the entire  [pension] payment at one time would have on neighborhoods? I don’t think so.”

Gee whiz, let’s hope so.

Ald. Bob Fioretti opposes any property tax increase and rejects any benefits cuts for police and firefighters. He says “we have proposed common sense proposals over and over again.” He supports raiding TIF funds, a commuter tax and a “LaSalle Street” financial tax, even though we have to yet to see any credible evidence that these solutions will generate substantial revenue.

Businessman Willie Wilson was vague on details but generally opposes cuts to promised benefits and wants to lower taxes. He opposes a property tax increases and supports a Chicago casino and a LaSalle Street tax.

Like it or not, ready or not, Chicago’s next mayor, along with the new City Council, must immediately deal with the city’s financial crisis. Until that is resolved, or at least set on a path toward resolution, Chicago can forget about hiring new police officers, expanding preschool programs, filling every last pothole or anything else that takes serious money to do right.

Tomorrow has arrived.

Check out to learn more about the candidates’ positions.

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