Editorial: How to put out another Chicago Fire

Jesus “Chuy” Garcia, the man who would be mayor, says Chicago’s financial mess is the city’s “greatest crisis since the Great Chicago Fire.”

We never quite thought about it that way before, so colorfully and dramatically. But, you know, Garcia is probably right. We can’t think of another crisis since the Great Fire that so threatens to take our city down.

Continuing the comparison, then, Chicagoans should be looking for a mayor prepared to tackle today’s crisis in the same pragmatic and immediate way that leading Chicagoans of 1871 rebuilt our city — fast and smart.

Cook County Commissioner Garcia’s plan to solve the city’s financial problems, unfortunately, is no plan at all, not if you’re looking for fast and smart. Mayor Rahm Emanuel’s plan, on the other hand, is fairly straight-up and realistic, premised on the notion of shared sacrifice by both public employees and taxpayers. Beware of commentators who claim a false equivalency, saying both plans are disappointingly vague. That is not true. Only one plan, Garcia’s, largely ducks the hard choices that must be made.

In an 18-page blueprint released on Friday, and in an op-ed in the Sun-Times on Sunday, Garcia dares to take only the most timid stand for public pension reform — he might be open to restructuring benefits for future employees — and relies almost entirely on long-range and highly speculative measures to cut the costs of government.

What are we to make, for example, of Garcia’s big idea that the city and three other local governments — the Chicago Public Schools, City Colleges and Park District — should collaborate more closely, sharing costs, conceivably saving the city as much as $300 million a year?

Great, right? Let’s give it a try. But the savings is frightfully speculative. And Chicago has enormous bills to pay right now.

Or how about Garcia’s plan for the city and county to collaborate more closely, as well, saving an estimated $70 million, half of which would go to the city?

Again, terrific. Give it a shot. But a city can’t budget wishes.

Garcia also says pension investment fees can be reduced for each or the city’s pension systems, saving another $50 million.

This, actually, is a promising idea, proposed by City Treasurer Kurt Summers well before Garcia caught on to it. But it is also small potatoes. Chicago needs a whole potato farm.

Let’s understand the size of the Goliath in need of slaying:

Chicago’s four public employee retirement funds are short nearly $20 billion. Each fund has just a fraction of the money it needs to pay promised benefits. The firefighters’ pension system — worst of the bunch — is only 24 percent funded.

We can complain until the cows come home that City Hall is to blame for this woeful underfunding, failing to make adequate payments into the retirement systems year after year — long before Emanuel was elected — and this is true. But it doesn’t fix a thing. Higher taxes alone will no longer solve the problem. The pensions themselves must be restructured, with benefits somewhat reduced.

Chicago faces three big bills immediately. It must, by law, determine this year how it will pay $550 million more into the police and firefighter funds next year. It faces a budget deficit of at least $300 million for 2016. And the city must budget at least $50 million for the Municipal Employees and Laborers funds this year.

Rahm Emanuel’s solution, as laid out in an op-ed in the Sun-Times on Sunday, gets right to the necessary but unpopular point. He would do his best to pass legislation to restructure the pensions of police officers, firefighters and teachers, following the “roadmap” of how he reworked pensions for municipal workers and laborers. Cost-of-living increases would be reduced, except for retirees with lower pension income, and employees gradually would make higher contributions. The age of retirement would not be changed.

Emanuel may not be able to force these reforms on the unions, especially if a looming Illinois Supreme Court decision on the inviolability of pension commitments goes the wrong way. But the mayor knows what he wants.

As for the revenue side of the equation, Emanuel writes, property tax hikes would be a last resort, with exemptions created for “low- and middle-income families,” and only after looking at a “broad mix of potential revenue sources.” During a televised debate Monday hosted by Carol Marin, he said, “Everything I’m doing is to avoid a property tax.”

We’re not sure what that “broad mix” is. This is where Emanuel himself grows vague, and where Garcia’s potential long-term partial fixes start looking better. The mayor should be more open to the various smaller revenue ideas kicked around in this election cycle, such as a modest La Salle Street traders tax.

But Emanuel has found ways to avoid a property tax hike for four years, instead panning for the last gold nuggets in played-out streams. He has demonstrated a reluctance to hit up the average Chicago homeowner any sooner — and for any more — than he must.