Mayor Rahm Emanuel today unveiled a nearly $7 billion budget for 2014, but also focused on a year from now and warned what will happen if the city doesn't fix its pension system by then.
“Should Springfield fail to pass pension reform for Chicago soon, we will be right back here in council early next year to start work on the city’s 2015 budget — a budget that will either double city property taxes or eliminate the vital services that people rely on.”
The mayor wasn't talking specifics today, but a plan put forward by his chief Springfield ally, Senate President John Cullerton, D-Chicago, could provide an outline.
As the Tribune reported last month, The measure would require a series of small city property tax increases starting in 2018 -- three years into what would be Emanuel's second term as mayor. It also would delay the need for big increases in city pension payments to 2022, three years into what would be Emanuel's third term, if he decided to serve that long and was able to win re-election.
Emanuel also alluded to Cullerton's recent remarks that state government's pension shortfall isn't a "crisis," though Cullerton did acknowledge the city's pension problem is.
“The pension crisis in Illinois is not solved until relief is brought to Chicago and all of the other local governments across our state that stand on the brink of a fiscal cliff because of our pension liabilities," Emanuel said.
“I believe I can speak for the members of this council when I say that we will not preside over a city in which garbage is not picked up, graffiti is not removed and libraries and other vital services that our residents rely on must be shut down.”
Overall, Emanuel plans to balance next year's budget by asking smokers and cable TV customers to pay more, cutting spending and hoping that a rosier economy will fill city coffers with more tax dollars.
"They've got a bunch of savings reductions," said Ald. Patrick O'Connor, 40th, the mayor's City Council floor leader, on Tuesday. "They've got some improved financial management. They've got a whole boatload of ways they are closing the budget gap."
Day-to-day spending on city operations would go up by $127.4 million, which is an increase of 4 percent. The mayor said he is asking for no increase in property, sales or fuel taxes.
The Emanuel administration expects to collect $101 million more from speed camera fines and sales, real estate transfer, hotel and other taxes than it predicted it would just three months ago when the mayor's financial aides first declared that the overall 2014 budget shortfall would be $339 million. The more optimistic revenue estimates allowed the mayor to fill nearly 30 percent of his budget hole in one fell swoop.
Emanuel plans to spend $66 million less than predicted in July by weaning city retirees off health insurance subsidies, ending office leases, eliminating antiquated pager contracts, cutting off unused telephone lines at City Hall, leaving about 80 vacant jobs unfilled and taking other measures.
He's also counting on $53 million to be left at the end of this year, a figure that could change by the time Dec. 31 rolls around. In addition, he wants to tap money from unused accounts, sometimes referred to in government parlance as "zombie funds."
The mayor also managed to find money hanging around in 154 controversial special taxing bodies, known as tax increment financing districts, where a portion of property taxes are dedicated to special projects.
By keeping the overall property tax levy steady in three TIF districts that are expiring or being killed off, he would bring in more than $20 million, while also delivering more than twice that amount to Chicago Public Schools. The mayor also is taking unused surplus money from TIF districts. That step will pump about $8.7 million into city coffers — and about $24 million into the school district.
The mayor's office has been dribbling out budget details since last week in the hope that the $34.2 million in tax, fee and fine increases would be old news by the time Emanuel delivers his speech, freeing up the public to focus on his new policy initiatives.
A 75-cent-per-pack increase in the city's cigarette tax is projected to bring in about $10 million. Some aldermen questioned that figure, however, saying the higher tax would result in more black-market and across-the-border sales.
A 50 percent increase in the amusement tax rate on cable TV is expected to bring in about $9 million, barring any flight to satellite TV, which under federal law cannot be taxed as an amusement.
Increased zoning permit fees for large construction projects, as well as hefty additional fees for filing on paper in person instead of electronically, are expected to generate $4 million in additional city revenue.
Another $11.2 million would come from increasing certain parking fines and doubling the initial daily storage fees for vehicles impounded for any of a slew of offenses. One increase, to $75 from $25, for parking a recreational vehicle, truck, taxi or bus on a residential street, is meeting some resistance from aldermen.
The mayor also touched broadly on prioritizing children and emphasizing public safety, common themes in his speeches.
“We share a common goal to end the tale of two cities when it comes to public safety,” said Emanuel, whose administration has struggled to get gun violence under control even as homicides drop in many other cities.
“We will graduate this year 741 police officers from the Police Academy this year and put them on foot patrols in neighborhoods that most need them.
Emanuel reiterated his support for minimum prison terms for some illegal gun possession. The bill the mayor wants is being negotiated in Springfield with pro-gun advocates.
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