Mayoral candidate Vallas outlines his 5-year financial plan

A hyper-animated mayoral candidate Paul Vallas on Monday laid out his five-year plan to confront a $28 billion pension crisis that Mayor Rahm Emanuel — even after an avalanche of tax increase — has only begun to solve.

Almost screaming from the podium at a City Club of Chicago luncheon, Vallas called for creating a “third-tier pension program” requiring a third of all city employees — those earning more than $100,000 a year — to contribute more toward their pensions and health insurance.

Vallas would further squeeze the city’s unionized employees by negotiating “revenue-based labor contracts” that tie future pay raises to available city revenue.

“I’m not begrudging people a fair wage. But we’ve got … to look at those individuals making those higher salaries and we’ve got to ask them to pay more. We’ve got to control those salary increases, but we’ve also got to require that they make a larger contribution,” Vallas said.

“You’ve got to let your employees know that these are the sacrifices … so that we can solve this problem once and for all. … People will make sacrifices when they know what the destination of that journey is. They won’t make sacrifices when there is no plan. Then, they close ranks and protect what little they have.”

Jeff Johnson, a trustee of the Municipal Employees pension fund, said Vallas’ proposal to increase contributions for high earners beyond the 8.75 percent they pay now stands little chance of passing legal muster.

Tying future wage hikes to available revenues may resemble the way it’s done in the private sector, but it’s “not the government model for how you negotiate a union contract,” Johnson said.

Without offering specifics, Vallas also talked about building on Emanuel’s impressive record of driving down city health care costs, implementing worker’s compensation reforms and “de-privatizing city services where appropriate” so more people are contributing to city pension funds.

He also vowed to end tax-increment-financing districts that, he claimed, have become a “political tool” that resembles a “game show giveaway.” He would, he said, use the money to rebuild inner-city neighborhoods suffering from “Depression-like” conditions.

“What if we took a billion dollars in TIF money and a billion dollars in investor money? That’s 20 percent. You could raise $10 billion for the West Side and the South Side. You could give those communities hope without raising taxes,” Vallas said.

“Yes, it’s a Trump initiative. Me? I don’t care if the cat is white or black. Does the cat catch mice? I remember Mayor Daley — the first Mayor Daley — going to O’Hare Airport to visit Nixon on the eve of his impeachment because he always put the city first.”

Vallas’ plan includes an aggressive Springfield agenda that calls for demanding half the tax revenue when and if the Illinois General Assembly legalizes recreational marijuana and sports betting.

It also calls for ending Chicago’s decades-long, elusive quest for a casino and taking advantage immediately of the windfall, perhaps, by turning McCormick Place East into a temporary casino.

Noting that Illinois may well have a Democratic governor and a veto-proof majority in both houses, Vallas further set his sights on: ending the “illegal diversion of corporate personal property tax replacement dollars”; demanding “full state equity for the Chicago teachers retirement system” and preserving the local share of new incomes tax revenues through the distributive share fund.

With all of those initiatives and more, Vallas firmly believes that he can generate as much as $1.8 billion. That would be enough to cap local property taxes at five percent, remove red-light cameras expected to generate $56 million in revenues this year and eliminate “punishing” city fines and fees.

Later this week, Emanuel will take a bow for the financial progress Chicago has made on his watch when he delivers his final budget address to the City Council.

On Monday, Vallas painted a dramatically different picture.

He portrayed Chicago as a city “in decline,” and with a financial condition that has “actually worsened” over the last decade “despite an increase in the stock market of over 300 percent.”

He added: “The unfunded pension liability is $28 billion, which may actually be closer to $70 billion if you don’t kind of adjust that projected investment earnings thing.”

Arguing that at least 40 of Chicago’s 50 wards are “either stagnant” or in “serious decline,” Vallas said: “I’ve seen more economic activity in Port-au-Prince, Haiti. And I’ve been there 40 times. These areas are economic dead zones. And I’m sorry, but Whole Foods subsidized with up to $10 million in TIF money is not economic development.”

That was a reference to a Whole Foods store that, with city backing, opened in Englewood in 2016.