Police union chief proposes temporary property tax hike until casino revenues come in

Fraternal Order of Police President Dean Angelo on Monday urged Mayor Rahm Emanuel to impose a temporary property tax increase to shore up police and fire pensions that could be rolled back when the jackpot of revenue from a city-owned Chicago casino comes rolling in.

Before the Illinois Supreme Court unanimously overturned state pension reforms, placing Emanuel’s plan to save two of four city employee pension funds in similar jeopardy, City Hall was negotiating with police and fire unions and making decent progress.

But Friday’s ruling shifted the talks more toward raising revenue than cutting benefits and increasing employee contributions. It also emboldened the police union president to publicly draw a line in the sand.

On Monday, Angelo said he would oppose Emanuel’s attempt to persuade the Illinois General Assembly to lift the hammer hanging over Chicago taxpayers — a state-mandated, $550 million payment due in December to shore up police and fire pensions — and give taxpayers more time to “ramp up” to that balloon payment.

“I’m not ready to agree to anything as far as an adjustment is concerned until that [$550 million] deposit is made. We’re expecting that deposit. Once that deposit it made, at that point, there can be discussion,” Angelo said.

“It shouldn’t continually fall on the shoulders of police officers and firefighters who don’t get Social Security, have no compounded COLA [cost-of-living adjustment] and have a completely different pension system than anyone else in the state.”

Instead, Angelo urged the mayor to forge ahead with his quest for a city-owned Chicago casino with 4,000 gambling positions and the potential to generate $457 million in annual revenue and $230 million in profits.

Noting that a Chicago casino would take “five or six years” to build and that a temporary casino would not generate “big money,” Angelo suggested an alternative.

“They’re gonna have to figure out where the least devastating impact is. Is a property tax gonna chase people out of the city? What if they look at a temporary property tax increase and, when the casino starts generating hundreds of millions of dollars, you roll it back. You put a shelf life on it, just like they did in Springfield. It becomes temporary and a shared solution to the problem,” he said.

Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, reacted coolly to the idea of a temporary property tax hike.

“Most things that are temporary become permanent. That’s always the fear. We need to be honest with people. If a casino were in the offing, who’s to say we’d be able to repeal the tax given the constraints we’re in,” O’Connor said.

O’Connor said he’s not surprised that the high court’s decision has Angelo ruling out a ramp-up to the balloon payment for police and fire pensions.

“Do you think they could possibly say to their membership, `We’ll forego this’? They’re keeping people’s feet to the fire. If they relax the situation, where is the political will to get this done?” the alderman said.

Still, O’Connor acknowledged there is a “growing sense of urgency” for Emanuel and the new City Council to get to work on a cost-cutting and revenue-raising plan to fund pensions without jeopardizing essential services that can satisfy Wall Street rating agencies.

The combined $30 billion pension crisis at the city and public schools has already dropped the city’s bond rating to just two levels above junk status.

“We need to get the new City Council in place, then begin to figure out what ideas everybody has and see what appetite they have for a different course of action,” he said.

“We obviously need to begin to move. So do our counterparts in Springfield. I know there’s a lot we could do alone. But it’s better for all of us to have an understanding of what each party is prepared to do, then begin to cobble this together.”

Tom Ryan, president of the Chicago Firefighters Union Local 2, said the state Supreme Court’s decision declaring pension benefits a constitutional promise to government employees means “we’re basically starting over again” in negotiations with City Hall.

“There’s plenty of ideas that have been floated. It’s just a matter of which one will work. The casino idea is certainly one both sides can get their arms around. But there’s other ideas. A financial transaction tax. Re-amortizing debt,” Ryan said.

“We have to look at all the angles, all the revenues and see what we can come up with. We don’t want to put too much of a burden on taxpayers. We have a responsibility to our members as well, who’ve paid faithfully. We know there needs to be a solution, and we’re gonna do the best we can to try to come to one.”