Property tax hike for pensions? Voters echo Quinn's 'No can do.'

Chicago aldermen have been searching under every rock for alternatives to Mayor Rahm Emanuel’s plan to raise property taxes by $250 million to save two of four city employee pension funds.

They had better dig harder, according to a new poll conducted for Early & Often, the Chicago Sun-Times’ political portal.

Offered four choices on ways Chicago could solve its $20 billion pension crisis, raising property taxes ranked dead-last, chosen by only one percent of the Chicago voters surveyed.

The favorite remedies on the list — both at 25 percent — were a “commuter tax” on suburbanites who work in Chicago and the transaction tax on LaSalle Street exchanges championed by the Chicago Teachers Union.

Running close behind — at 21 percent — was a city income tax. That’s somewhat surprising, since a city income tax would have to be paid by many of those polled.

Emanuel’s proposal to raise property tax collections by $750 million over five years for pensions wasn’t the only polling question that showed the mayor’s priorities out of touch with Chicagoans.

Only 23 percent of those surveyed support the mayor’s controversial plan to use $60 million in tax-increment-financing (TIF) money to build a new selective enrollment high school on the North Side named after President Barack Obama.

Fully 70 percent of those surveyed said the TIF money should be spent on something else.

The plan has stirred controversy because it follows Emanuel’s decision to close 50 public schools in predominantly African-American neighborhoods on the South and West Side.

Exacerbating the problem is the fact that Chicago’s 11th selective enrollment high school would be located on the North Side near Walter Payton College Prep, which is in line for a $14 million, TIF-funded expansion.

Chicago has long been a tale of two cities when it comes to both public education and crime. The poll underscored that racial divide, most recently on display in the CNN series, “Chicagoland,” which the mayor’s office helped to orchestrate.

Asked whether they felt safe in Chicago, 51 percent of voters said yes.

But the answer varied widely based on race.

Fully 68 percent of African-Americans surveyed said they did not feel safe. The result among whites was almost a mirror opposite, with 71 percent of those polled saying they did feel safe. Hispanics landed in the middle, with 52 percent saying they did not feel safe.

Pollster Michael McKeon said he’s not surprised that the property tax was shunned by 99 percent of voters surveyed. There’s a reason they call it the “third-rail of Chicago politics,” he said.

“If you touch property taxes, it’s poison. Every poll we’ve done shows same thing,” McKeon said.

“If he persists with the $250 million increase, it isn’t going to go over” with Chicago voters.

Emanuel’s City Council floor leader has warned that the mayor’s plan faces an uphill climb among Chicago aldermen because of three political realities: The aldermanic election is nine months away; union leaders are either sitting on the sidelines or adamantly opposed, and City Council votes to raise property taxes are a rarity.

Former Mayor Richard M. Daley had a political phobia about raising property taxes — and steered clear of doing so during 15 of his 22 years in office. Emanuel did the same during his first three budgets — knowing full well he would need a massive increase to solve the city’s pension crisis.

Further complicating the situation is the fact that yet another property tax increase — or some other form of new revenue —will be needed to shore up police and fire pension funds that are even closer to going belly up than the funds Emanuel is trying to save.

Next year, Chicago is required by state law to make a $600 million contribution to stabilize police and fire pension funds that now have assets to cover just 30.5 percent and 25 percent of their respective liabilities.

Earlier this week, Emanuel shot down the transaction tax idea. He warned that it would be tough to get approval from both Springfield and Washington and that the tax could turn LaSalle Street into a ghost town even if it did clear those legislative hurdles.

“Years ago, people referred to LaSalle Street because it was a financial center. Chicago had a lot of banks that were Chicago-based. There’s only one left. They’re all gone,” the mayor said.

“As it relates to the futures and options industry, that’s a place where Chicago is still economically a dominant player — and there’s more competition,” particularly if a first-in-the-nation transaction tax is tacked on.

Emanuel is still waiting for Gov. Pat Quinn to sign a bill that sets the stage for a $250 million property tax increase to save the Municipal Employees and Laborers pension funds by increasing employee contributions by 29 percent and reducing employee benefits.

Although Quinn said “no can do” to the property tax, Emanuel has said he’s standing pat with his “balanced, measured and responsible” plan because the Wall Street rating agency that has dropped Chicago’s bond rating four notches in eight months is demanding a “reliable” source of revenue.

The mayor has said he’s “always open to ideas” to reduce the massive property tax increase.

But, he has proceeded to shoot down nearly every one of the alternatives suggested by politically gun-shy aldermen.

They include a proposal by downtown Ald. Brendan Reilly (42nd) to dedicate up to 50 percent of all existing and future TIF funds toward pension liabilities and borrow up to $2 billion against future proceeds of TIF districts.

“Would you like me to borrow [from] the TIF for the pension or the school? We have TIF dollars that built the Back-of-the-Yards school. We still have to pay that off … You have Coonley being built. You have a list of schools across the city of Chicago that use TIF dollars that are going to our future,” the mayor said on the day he unveiled his plan to use $60 million in TIF money to build Obama College Prep.

The mayor has also nixed the idea of using the jackpot of revenue from a Chicago casino to solve the pension crisis.

“I don’t think you should go to the roulette table with somebody’s retirement check. I’m not gonna do that,” the mayor said last month.

“I would like to remind everybody we have police and fire pensions we have to still deal with. We have a lot of other challenges ahead of us. This was the most responsible way to do it. If people have ideas, bring `em forward. But, they have to be sustainable and consistent.”

Sun-Times McKeon Poll Summary

Sun-Times McKeon Cross Tabs