Chicago aldermen on Monday pushed back hard against the idea of giving the CTA a “blank check” — by raising ride-hailing fees to bankroll $180 million in CTA improvements — without more control over CTA finances.
Mayor Rahm Emanuel’s $64.7 million package of tax increases and fee hikes survived an early test vote with two abstentions.
But Monday’s Finance Committee vote gave aldermen a chance to vent their anger about the mayor’s plan to raise ride-hailing fees by 15 cents a ride next year and by another nickel in 2019 and ship the $16 million and $21 million in annual revenues during each of those years to the CTA.
Downtown Ald. Brendan Reilly (42nd) noted that the city is facing massive pension liabilities just a few years down the road, and is in no position to fork over a “new perpetual funding stream to a sister agency that isn’t accountable to the Chicago City Council.”
“Once the money goes out the door, the City Council really doesn’t control how that money is going to be spent,” he said.
Reilly also joined Ald. Patrick Daley Thompson (11th) in branding as “a bit backwards” the decision to approve the subsidy before the CTA has released its own budget and determined whether it would raise fares for the first time since 2009, cut service for the first time since 2012 or a combination of the two.
Both measures are “on the table” to erase a $33 million shortfall, CTA chief of staff Sylvia Garcia told aldermen.
“We’d have a better sense of how this money is spent and why you need this much, vs. a lesser amount if you’re able to find some efficiencies and some dollars in those cushions” if the CTA budget was unveiled first, Reilly said.
Several aldermen questioned what would happen if the Illinois General Assembly approves a state capital program for the first time in eight years.
Although the intergovernmental agreement doesn’t require it, Budget Director Samantha Fields said there would be nothing stopping the city from amending its intergovernmental agreement with the CTA if the need is reduced by an influx of state funding.
Ald. John Arena (45th) denounced the per-ride fee as a “straight pass-through to the consumer” that will hit hardest at working people who rely on Uber, Lyft and Via for the last leg of their daily commute.
“We need to get more aggressive in saying, `You’re abusing our infrastructure to benefit your bottom line,” Arena said of Uber, whose investors include Emanuel’s brother.
Even Ald. Joe Moore (49th), who called the ride-hailing fee an “innovative idea” and a “no-brainer,” agreed that aldermen need more in return for their support than an annual report after-the-fact on how the money was spent.
The 28.2 percent increase in the monthly tax tacked on to Chicago telephone bills — both cellphones and landlines — also generated political pushback because of the pain it will cause.
It will cost a family of four with four cellphones and a landline an extra $66 a year and an extra $150 annually, when coupled with the 56 percent telephone tax hike approved by the City Council just three years ago.
Ald. Pat Dowell (3rd) asked again whether there was any way to exempt landlines.
“The purpose of this was to allow 911 to accept text messaging, pictures and video, which you can’t do on a landline,” Dowell said.
Deputy Corporation Counsel Wes Hanscom responded that rates for landlines and cellphones have been authorized by the state “at the same maximum” and that both types of phones “can reach 911.”
“We’d be putting a lot of money at risk of a challenge if we deviated from that,” Hanscom said.
The amusement tax restructuring, expected to boost annual revenues by $15.8 million, has raised the ire of Chicago sports moguls and Ald. Walter Burnett (27th), whose ward includes the United Center.
They fear big-name artists will skip their venues to avoid Emanuel’s plan to bankroll an amusement tax waiver for neighborhood theaters and music venues with fewer than 1,500 seats by raising the amusement tax on major concerts from 5 percent to 9 percent.
On Monday, Burnett said he “felt guilty” standing with Blackhawks owner Rocky Wirtz last week at the opening of a new Hawks practice facility that will double as a community center when, “We were getting ready to sack ’em again” with a higher amusement tax.
The revenue package also includes higher fines for environmental and building code violations and increased fees for restaurant licenses to bankroll the hiring of 22 additional food inspectors over the next two years to address a glaring shortage identified by Inspector General Joe Ferguson.
The 2018 budget is Emanuel’s seventh since taking office, but it has also been his most tranquil.
That’s because the heavy lifting of identifying dedicated revenue sources for all four city employee pension funds has already been done.
It locked in a $63 million property tax increase for police and fire pensions in 2018 and a second year of a previously approved 29.5 percent surcharge on water and sewer rates that will cost homeowners and businesses an extra $1.28 for every 1,000 gallons used.
The $1.4 billion property levy approved Monday includes $900 million for pensions, $415 million for debt service and $95.4 million for Chicago Public Libraries.
It also captures $26 million from new property, discontinued property tax incentives and “recovered increment” from expiring tax-increment financing districts.