PI Original Ellyn Fortino Thursday October 24th, 2013, 6:48pm

Breaking Down Emanuel's 2014 Chicago Budget

Although Chicago Mayor Rahm Emanuel's proposed 2014 budget unveiled Wednesday includes no increases on property, sales and gas taxes, some aldermen say the plan relies too heavily on hiking other fees and fines to help reduce the city's $339 million deficit. Progress Illinois provides an overview of the mayor's budget plan.

Although Chicago Mayor Rahm Emanuel's proposed 2014 budget unveiled Wednesday includes no increases on property, sales and gas taxes, some aldermen say the plan relies too heavily on hiking other fees and fines to help reduce the city's $339 million deficit.

The mayor's $8.7 billion spending plan is counting on $10 million in revenue from higher parking fines and impounded vehicle fees, $9 million from a cable TV tax, about $120 million from red-light and speed cameras and $4 million from increased fees for zoning applications and for those who file such documents in person rather than electronically.

Additionally, Emanuel has called for a 75 cent tax  per pack on cigarette sales, estimated to bring in $10 million in new revenue. If this cigarette tax is approved, Chicago would have the highest-taxed smokes in the country. The mayor says the tax would be used to enroll Chicago Public School students who lack basic health care in Medicaid.

Ald. Jason Ervin (28th), however, says he opposes Emanuel's cigarette tax proposal.

"I don't want people to smoke, it is not healthy, but it is legal," the alderman said in an email. "The cigarette tax will not stop people from smoking; it will only drive people, who can afford to leave the city, to Indiana and other states to purchase their cigarettes. Those are tax dollars the city is giving away. This tax is being paid by people who cannot afford to leave the city and it will increase the number of loose cigarettes sold on corners and outside of gas stations and corner stores. One of the most pressing concerns will be the illegal cigarettes from overseas flooding Chicago's streets."

The mayor has also suggested bumping fines for illegally parking on street-cleaning days and during rush hour as well as parking 15-feet from fire hydrants. The budget also includes increasing the violation for parking in a handicap spot from $200 to $250, which Ervin said he supports.

"There are many seniors and people with disabilities who need and use these parking spaces and it is not right for someone able-bodied to misuse these spaces," he said. "These types of violations are options; no one has to park illegally." 

Ald. Pat Dowell (3rd) said she is critical of raising the taxes on cable TV providers from 4 percent to 6 percent, saying customers would likely end up shouldering the costs which could be financially burdensome for residents on a tight budget.

"I think that there are many people on fixed incomes who don't spend their money on fancy restaurants and movie theaters, going out to see a play, who use cable as their form of entertainment," Dowell said. "So I want to know the impact of that on their bills, and I don't have the answer to that yet."

Instead of the cable TV tax, Dowell said she wants to see a $25 bicycle registration fee as well as a mandatory one-hour safety course included in the budget.

The eight members of the city council's Progressive Reform Caucus also say they are also dubious of the various proposed revenue generators, writing in a statement that, “This budget treads over the same ground as past budgets by calling for an increase in fee and fines."

"This puts the weight squarely on the backs of those that have carried us through the recession," the aldermen continued. "They have been steady as services lagged and their quality of life suffered. But this budget continues to ask more of them."

The mayor on Wednesday, however, made a point to stress that the 2015 budget could be even more painful if state lawmakers do not pass pension reform legislation. The city has to make a $600 million contribution in 2015 to its underfunded police and firefighter pension funds, bringing the city's total pension obligation to $1 billion.

“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 need,” Emanuel said in a statement. “Without reform, we cannot make the critical investments in our future, and the future of our children. Without reform, we cannot be the city that we want to be.”

To help balance the budget, Emanuel is also anticipating an additional $100 million in better-than-expected revenues from hotel, sales and real estate transfer taxes. The budget gap will also be closed through "improved fiscal management," such as $53.4 million from the 2013 budget surplus and $35 million from "sweeping aging revenue accounts and grant funds."

Additionally, the city is banking on $26 million in healthcare savings, some of that coming from the mayor's plan to phaseout the city's 55 percent health care subsidy for 30,000 retired city of Chicago employees and their dependents starting January 2014. 

The city is expected to haul in $65 million to $70 million in revenue from the controversial new speed cameras in safety zones near parks and schools, with the money largely designated to help pay for a new "Children's Fund."

According to the mayor's office, the city has lost more than $11 million in federal funds over the past three years for after school and summer programs. The Head Start program was also slashed by $7 million due to the sequester.

With speed camera revenue coming into the new fund, children’s programs will continue to be funded at their current levels, the mayor said, and more invests will be made in early childhood education and after school and summer job opportunities for the city's youth.

Specifically, the budget calls for $13 million in after school programs for nearly 16,000 kids, $14.5 million in summer jobs for more than 12,000 youth and $11 million in early education opportunities.

The budget also continues to improve public saftey and promote job growth, including expanding the microlending initiative in partnership with the city treasurer’s office to help support 300 businesses by 2016, the mayor said.

Emanuel plans to set aside $71 million for police overtime pay, up from $32 million the mayor budgeted last year, reports the Chicago Tribune. In all, Emanuel's proposed Chicago Police Department budget for next year is $1.29 billion, more than the department's $1.25 billion budget in 2013. The 2014 budget includes funds needed to graduate 741 officers from the Police Academy who will be tasked with foot patrolling Chicago's streets. The new police officers will help to keep pace with attrition. The administration argues that hiring new officers is more expensive than paying current employees overtime.

But Ervin said boosting police overtime is not the best approach to combating cime.

"When I read the reports of violence on the streets and work with the police to stem the tide of this violence is it with a heavy heart," Ervin said. "I speak with the families in my community who are victims of violent crimes, I attend the funerals, and I see the pain in their eyes. Increasing overtime pay for officers is not a comprehensiveness plan to reduce crime and allow people to feel safe in their neighborhoods." 

The Progress Reform Caucus maintains that $50 million would be enough to hire 1,000 additional officers, and the aldermen called for those funds to be set aside in the budget for CPD hiring.

"This will allow the CPD to bring its force up to the size needed to combat violence that has taken precious lives and destroyed families," wrote the aldermen, including Alds. Bob Fioretti (2nd), Leslie Hairston (5th), Roderick Sawyer (6th), Toni Foulkes (15th), Ricardo Munoz (22nd), Scott Waguespack (32nd), Nicholas Sposato (36th) and John Arena (45th).

The aldermen also made the following requests in their statement released Wednesday:

We call for an audit and sweep of the TIF funds that have diverted millions of dollars from our school system. Today’s budget includes an $8.7 million surplus. That’s not enough to prevent further cuts to our educational system.

We call on the Emanuel Administration to join international cities in creating more equitable sources of revenue that ensure that corporate citizens contribute their fair share to the tax base.

We call for the full restoration of $2.2 million in funds for the reopening of the six public mental health clinics that were shuttered in 2012. It has become clear that the available services have not met the promised standards since the closing of these clinics. Supporting those most in need in our city is not only the right thing to do, it is a public safety issues for all of our communities.

Ald. Sawyer told the Ward Room Wednesday that he and his caucus colleagues are also discussing more equitable ways to generate revenue in the city.

“We’re looking for corporations and high income earners to pay their fair share to righting this city [financially],” he said. “The mayor did talk about things he’s alleviated for businesses — elimination of the head tax, certain incentives for businesses to come here — and that’s good. But we are constantly taxing and pricing regular citizens out of the market, out of the city of Chicago, and we have to change that.”

Citywide Participatory Budgeting Effort

The mayor's proposed budget also calls for the creation of a Manager of Participatory Budgeting position in the Office of Budget and Management. The new participatory budgeting manager would assist aldermen with technical support if they choose to use the community-based budgeting system, which lets ward residents decide how to spend their alderman's $1.3 million in "menu money" each year on public infrastructure improvements. Residents brainstorm infrastructure improvements they want to see in their community, like new street lights and sidewalks or a dog park, and later vote on the various proposals.

Ald. Joe Moore (49th) was the first Chicago alderman to use the budgeting system in his ward back in 2009. Moore has used participatory budgeting in his ward each year since then. Three other aldermen, including Arena, Hairston and Munoz, have also adopted the process this year.

The mayor says the goal is to provide every alderman with access to the innovative budgetary tool spearheaded by Moore.

“Alderman Moore’s participatory budgeting process has proven to be a success and is now a national model for engaging citizens in the budgeting and capital planning process,” Emanuel said. “I am pleased that we can take his model and make it a permanent part of city government so that other aldermen who choose to implement this program have a resource at their disposal."

In a statement, Moore said he was "pleased and proud" that the mayor plans to create the new position, paving the way for more aldermen to take part in participatory budgeting.

"This move will further the hard work of the residents of the 49th Ward and communities across Chicago. Participatory budgeting allows residents the opportunity to be more than observers of their local government; they become active participants in governing," Moore wrote. "Empowering people to make real decisions openly and transparently is the first step toward strong communities and effective local governance. I commend the Mayor for undertaking this important step in democratic decision-making."

Moore noted that other aldermen are interested in the effort but are concerned about the amount of time and energy that goes into the process.

"Hopefully, this new position will give them the added resources they need to take the next step," Moore said.

Residents in the 49th Ward just recently wrapped up their first participatory budgeting phase for Moore's 2014 infrastructure budget. Check out Progress Illinois' coverage of their first meeting earlier this month here.

The full Chicago City Council still has to sign off on the mayor's proposed budget.

Ervin stressed that the budget is not set in stone.

"People are hurting financially and in communities I represent, they are going to feel the pain of the Mayor's proposed budget," Ervin said. "My job, as alderman, is represent their interest. The Mayor has proposed his budget and now the city council will take the time to negotiate the numbers."

Budget hearings at City Hall are set to begin Monday, running through early November.

The Progressive Reform Caucus is holding a budget town hall meeting for the public on October 30 at 7 p.m. at the United Electrical Workers Hall, 37 S. Ashland Ave. Ald. James Cappleman (46th) is also hosting a budget town hall on November 4 at 7 p.m. at Weiss Memorial Hospital, 4646 N. Marine Dr.

Check back with Progress Illinois for our coverage of the upcoming town hall meetings.

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