Emanuel and Rauner continue squabbling over phone-tax increase

Mayor Rahm Emanuel on Friday decried Gov. Bruce Rauner’s opposition to a 28.2 percent telephone tax hike that would free up money the city hopes to use to shore up the Laborers Pension Fund “well into the next decade.”

The mayor noted that the tax was tucked into a statewide 911 telecommunications bill that got bi-partisan support: 51 votes in the Illinois Senate and 81 votes in the House.

“It affects downstate communities [and] the whole state. That’s why it received overwhelming, bi-partisan votes across urban, suburban [and] rural areas,” the mayor said. “Even when something that is essential for downstate, for every community as it relates to public safety and an overwhelming bi-partisan vote, he’s gonna veto it.”

Even as they feuded over the telephone tax, the mayor and governor did reach a rare detente on the matter of gun violence in the Chicago, as Rauner signed a bill to increase penalties for repeat gun offenders.

The telephone tax hike — from $3.90-a-month to $5 on all cell phones and land lines in Chicago, subject to the City Council signing off on it should the bill pass — was quietly approved in the waning hours of the spring session. Outside Chicago, the monthly 911 surcharge would rise from 85 cents to $1.50, subject to approval from local governments.

Rauner views the increase as “unacceptable,” in part, because Chicago “has already received two significant” telephone tax hikes in the last four years.

He wants lawmakers to send him a new version without the surcharges.

Earlier this month, a top mayoral aide told the Chicago Sun-Times that Emanuel would use the increase to help shore up the Laborers Pension Fund “well into the next decade.”

The following day, the mayor tried to sell the increase as essential to maintaining Chicago’s 911 emergency system. Never mind that the $27 million in annual revenue generated by the tax hike and used for 911 center improvements would free up that same amount in the city’s corporate fund for future pension payments.

“911 was always supposed to be independently funded and separate and not a drain as it relates to the city and property taxpayers,” the mayor said then.

City Hall’s position on the matter prompted Matthew R. Rentschler — chief legal counsel for the Illinois State Police, which distributes 911 funds — to send a warning letter on Thursday to city Corporation Counsel Ed Siskel.

“It has been brought to the attention of the Illinois State Police . . . that the city of Chicago intends to use the funds it receives from the 911 tax to pay towards pension obligations and not for purposes specifically spelled out and allowed for in the 911 statute,” Rentschler wrote.

“It is our position that there is no authority given to the city in either the current law or the proposed renewal to use such funds to pay towards city pension obligations. We request that the city provide to us by the close of business on Monday . . . the authority it believes it has to use such funds to make payment on its pension obligations.”

Emanuel noted that the latest veto threat came just hours after he went public with his failed attempt to broker an end to a key part of the marathon state budget stalemate.

The mayor said he’d drop his objections to Rauner’s $300 million plan to sell the Thompson Center if Rauner would sign off on Emanuel’s plan to save two of four city employee pension funds as a show of good faith.

Rauner turned down the deal, prompting Emanuel to declare his old friend and former business associate “congenitally incapable” of compromise.

“He’s gonna get 90 percent of what he wants on education. He’s gonna veto it. He’s gonna get his Thompson Center [sale] with all the bells and whistles he wants. He’s opposed to it,” the mayor said.