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Emanuel intensifies lobbying effort for water and sewer tax

Toni Preckwinkle, a former alderman, and Lori Lightfoot, her opponent in the April 2 mayoral runoff, have different ideas about how they will deal with the City Council. | File photo

Mayor Rahm Emanuel on Thursday intensified his efforts to round up the 26 City Council votes needed to slap a 29.5 percent tax on water and sewer bills to save the largest of four city employee pension funds.

One day after beleaguered Chicago homeowners got hit with a $250 million property tax increase for teacher pensions, top mayoral aides asked aldermen during closed-door briefings to lower the boom on their constituents once again to save the Municipal Employees pension fund.

That’s a tall order, considering the $588 million property tax increase for police and fire pensions and school construction approved by aldermen less than a year ago along with a first-ever garbage collection fee of $9.50-a-month.

So the mayor’s lobbyists came prepared.

Each alderman was handed a summary sheet that shows how the utility tax would impact his or her constituents over a four-year phase-in period, how many would qualify for the promised 50 percent senior discount and how favorably Chicago water and sewer bills would compare to the suburbs and other major cities, even with the tax increase.

The schedule calls for Chicagoans to pay a 7.7 percent tax on their combined water and sewer bill next year; the rate increases to 16.1 percent in 2018; 24.3 percent in 2019; and finally reaches 29.5 percent in 2020.

In the Southwest Side’s 23rd Ward, that would cost the average owner of a single family home $5 more-a-month and $60 a year in 2017. In the fourth year, the added annual burden would be $252.

Aldermen were also handed results of a new poll conducted for the Illinois Economic Policy Institute that could ease their concerns about walking the political plank — again.

It shows that: 61 percent of the 600 Chicago voters surveyed support the mayor’s plan to save the Municipal Employees pension fund; voters are more concerned about education (35 percent) and crime and police issues (34 percent) than they are about taxes (15 percent); and that twice as many people would rather see the city “raise property taxes and other fees” to solve the city’s pension crisis than cut services like schools and police officers.

Top mayoral aides have not yet responded to a Progressive Caucus demand for “actuarial” proof that the utility tax will generate enough money to achieve a 90 percent funding ratio by 2057 for a Municipal Employees pension fund with $18.6 billion in unfunded liabilities that’s due to run out of money in 2025.

Even so, most aldermen emerged from their second set of briefings resigned to the difficult vote they will be asked to cast on Sept. 14.

Doing nothing is not an option. It would allow the city’s largest pension fund to go bankrupt and require paying retirees on a pay-as-you go basis. That would cost up to $1 billion a year.

“Any other reliable alternative seems to depend on Springfield and right now, Springfield is in a quagmire,” said Ald. Walter Burnett (27th).

“We’re between a rock and a hard spot. [If aldermen do nothing], we’re gonna go down. … We won’t be able to borrow money. We’re gonna keep paying more interest. We’re gonna go deeper and deeper into the hole.”

Ald. Danny Solis (25th) said top mayoral aides “made a compelling case” for “why we don’t have any other options.” But, he’s concerned the crushing tax burden will lead to a huge turnover in the City Council.

Ald. Mike Zalewski (23rd) said he’s “open” to supporting the mayor’s plan, but he’s “not there yet.”

“We were just told the governor is still committed to gaming. But, we still haven’t talked about where we’re at with a casino. There are some things I still think need to be discussed. This is what is being presented to the aldermen. And it’s gotta be done soon. That’s the problem,” Zalewski said.

Apparently referring to former Mayor Richard M. Daley’s decision to punt the pension crisis to Emanuel, Zalewski said, “It’s not easy when you’re doing it all in one term. … It’s gonna be an interesting cycle in 2019 — for not only the aldermen. For other offices, too. Starting on five [the mayor’s office].”

Rookie Ald. Michael Scott Jr. (24th) said he remains concerned about the regressive nature of the mayor’s plan.

“When you continue to add taxes like the water tax that’s flat across the board and the garbage fee, which is essentially a tax, you continue to hit the people who need it the most greatly. That is my community. I need to protect them,” Scott said.

Ald. Ameya Pawar (47th) is in the second term of a self-imposed, two-term limit. He has talked about running for mayor in 2019 if Emanuel doesn’t.

“No one is happy about the fact that this has built up over 30 years. But, it’s time for all of us to stop buying into the narrative that any increase in taxes is somehow the end of your career. That’s how we keep getting into the same situation where we kick the can only to look at a catastrophic increase,” he said. “It’s time to do the right thing. … I understand people are going to be upset. I understand this is not an easy vote. But it’s one we were elected to take.”

Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, was asked to assess the chance he can round up the 26 votes needed to approve the mayor’s tax plan.

“I don’t know, to be honest with you. We haven’t begun to do vote totals,” he said.

“But, whether it’s this or something else, we’re gonna have to do something. They were very clear and very open that, if there is something else out there, that’s viable to be a committed, stable revenue source, we’re all ears. There were no takers with an idea that’s actually doable.”