Progress Illinois takes a look at Chicago Mayor Rahm Emanuel's proposed 2015 budget, which was unveiled on Wednesday.
During his 2015 budget address at Wednesday's city council meeting, Chicago Mayor Rahm Emanuel talked up city reforms and improvements made over the last three years, but provided few specifics on how he plans to balance the city's finances without proposing new property, sales or fuel taxes.
"Our 2015 budget will help Chicago confront and overcome the greatest challenges to our future: the threat of crime; the quality of our education; and the need for economic growth and good jobs throughout the city," Emanuel said in his nearly 40-minute speech. "It will do so by continuing the practice of reforming city government, respecting our hardworking taxpayers and, most importantly, by continuing to confront the challenges facing our city -- and facing them head on."
During his speech, Emanuel touted new investments included in his 2015 fiscal plan, which was also unveiled today, including more summer job opportunities for the city's youth, increased pothole-filling and graffiti-removal efforts, an additional $1 million for After School Matters, and double the number of bike police officers in neighborhoods.
"In this budget, we will provide a record 24,000 summer jobs to our youth -- a growth of 70 percent since 2011," the mayor said.
After the speech, progressive Ald. John Arena (45th) said he wasn't surprised by Emanuel's lack of detail on how he proposes to close next year's projected $297.3 million budget gap.
"A budget address is never going to tell you the details. It's going to tell you the top line and what's good about it," the alderman said. "Our job is to go into it and find out how we can make it better, or where we need to redirect priorities."
Emanuel's proposed 2015 budget holds the line on property, sales and fuel taxes and does not include the $550 million contribution the city has to make to its woefully underfunded police and fire pension funds.
City officials say that increased pension contribution does not need to be made until 2016, allowing additional time for the mayor and aldermen to come up with revenue options and wait for pension reform from Springfield. The city also has until December 2015 to determine whether the property tax levy will be tweaked under state law.
This all essentially means that city council members and the mayor can put off tackling the city's pension problems and possible solutions, like a property tax hike, until after the upcoming February municipal election.
The city has a $20 billion pension crisis.
In his speech, Emanuel said the 2015 budget "starts our journey to properly fund our pensions so our workers can have the retirement security they deserve and have earned."
"For the last three years, we have talked about the dangers of our looming pension crisis," the mayor added. "Finally, we are doing something about it. Working with our partners in organized labor, we passed reforms that will shore up the pension plans serving half of our city's workforce -- making sure that both retirees and taxpayers are respected."
Meanwhile, Emanuel wants to address next year's budget shortfall in part by increasing the tax for parking in public garages and eliminating amusement tax exemptions on cable TV and luxury Chicago stadium skyboxes.
Under the proposed fiscal plan, the parking tax would increase 2 percentage points, to 22 percent on weekdays and 20 percent on weekends. The proposal is expected to generate $10 million in 2015, which would be used to ramp up pothole-filling efforts.
"This budget will double the size of our pothole crews and go from having them for half a year to year-round, also setting a new standard going forward," Emanuel said in his budget remarks. "Nearly all the funding for this critical expansion will come from those who park in downtown garages or at our airports, including suburbanites and visitors."
Under Emanuel's plan, the amusement tax on cable TV, which consumers usually end up shouldering, would increase from 6 percent to 9 percent. Ending the exemption in the cable TV amusement tax would bring in $12 million next year, according to the budget.
The mayor also wants to bump up the "personal property lease tax" from 8 percent to 9 percent on leased automobiles and office machines, which would generate about $17 million. Emanuel is looking to include that tax increase on car sharing rentals such as Zipcar.
Another $26 million is projected to be generated through "increased city sticker enforcement" and "improved collection from scofflaws." More savings, to the tune of $17 million, are expected to come from closing a loophole in the "use tax" to crack down on local firms that make purchases in other municipalities to dodge city taxes.
The budget also outlines $81 million in spending cuts and government reforms. Some $27 million in savings will come from the administration's plan to increase health insurance premiums for retired city workers next year by 30 percent to 79 percent.
The Emanuel administration's other cost-savings measures involve vacancy eliminations, reducing city department non-personnel accounts to zero and selling "excess city-owned land." Lease, energy and technology savings are also included in the budget.
Additionally, the administration expects to generate $60.5 million through "improved fiscal management," which includes sweeps of aging revenue accounts, TIF reform and "proper allocation of costs to citywide programs."
Mayoral candidate and 2nd Ward Ald. Bob Fioretti called Emanuel's fiscal plan a "top-down budget" that "doesn't solve the problems."
"What we heard today is more of the same and not a serious proposal: Election year fluff regarding potholes and graffiti removal while kicking the real costs down the road. No solutions to our long term debt. No TIF reform. And sticking the bill to our retirees," he told reporters after Emanuel's address.
"This mayor and this budget shortchanges Chicago's long-term future. Are we going to continue to nickel and dime our residents and our people with cable TV and car sharing fees? Or are we going to get everyone to pay its fair share so we can can solve our budget problems, create confidence in our city and Chicago's economy and make our streets safe and neighborhoods great? ... The conversation should be about what Chicago wants and Chicago needs."
Fioretti is a member of the council's Progressive Reform Caucus, which released the following statement after Emanuel's budget address:
In recent years, we in the Progressive Caucus have encouraged Mayor Emanuel to prioritize human need and fulfilling the promise of improvements in our neighborhoods in the City budget. We have called upon the Administration to deal seriously with issues like pension funding and tax increment financing reform. And, above all, we have urged the Administration to address our city's need for new revenue sources, including asking the wealthiest among us and the big corporations to pay their fair share.
Today, we make those calls again.
It's no secret that we need to make some changes in our city's finances if we're going to be able to fully fund our commitments to our public workers and their pensions. We should start with a fair approach to revenue. Last spring, our legislators in Springfield had the opportunity to pass a progressive, fair income tax that would have benefited the city budget enormously and would have lightened the burden on everyday Chicagoans. That proposal could still move forward in Springfield and we hope the Mayor will use the power of his office to demand its passage.
Here in the city, we need to implement progressive revenue options like a LaSalle Street Tax, which would place a small tax on financial transactions, or a commuter tax, which would ask those who live in the suburbs but work in the city to contribute a small amount to help to pay for the services they, too, benefit from every day.
As in past years, we urged the Mayor to reinstate the $2 million annually into the budget to fully fund mental health care services. The cuts in that area have been devastating, but it's not too late to start to make the changes necessary to repair the lives of many of the Chicagoans who have been harmed in the process.
We also reiterate our call for the allocation of funds for the Chicago Police Department to hire 500 new officers. This will allow the CPD to bring its force up to the size needed, and to reduce our over-reliance on police overtime.
We appreciate that the Mayor called in his budget address for an increase in minimum wage. Research demonstrates that our proposed $15 wage is the minimum amount required to allow Chicagoans to get off public assistance and create healthy economic development in our city. We know that through a collaborative process, we can ensure that as many Chicagoans as possible are able to rise out of poverty, including home healthcare workers and tipped workers.
We look forward to working with Mayor Emanuel to create a budget that matches a vision for our city that works for all Chicagoans.
Budget talks come ahead of the municipal election, but that doesn't mean the city council should "set aside the issues," stressed Progressive Caucus member Ald. Scott Waguespack (32nd).
"We still got to forge ahead and get these things done," he told reporters today. "We haven't talked about our pension issues. We haven't talked about the major financial issues. What we were given yesterday in briefings was kind of a gloss over. So, like most citizens out there, we don't know much."
The council's Progressive Reform Caucus will be working with a budget analyst to comb through the massive fiscal document, aldermen said.
The Chicago Teachers Union, meanwhile, said Emanuel's fiscal proposal lacks innovative revenue ideas and uses, in part, "accounting trickery" to balance the city's budget. CTU Vice President Jesse Sharkey issued the following statement after the mayor's budget address:
At the end of today's city budget address, Mayor Rahm Emanuel closed with a comment touting downtown business growth. His perspective is particularly apropos: in a city where the top 5 percent of earners make 25 percent of the income and unemployment in some parts of the south and west sides nears 50 percent, three-quarters of those downtown jobs have gone to people outside of the city.
A budget for everyone would address these realities, but this budget continues a top-down imposition of two distinct cities, one for the privileged and one for everyone else. Similar to other Emanuel budgets, 'balance' comes through savage cuts to public service and accounting trickery, as there is only minimal revenue generation in this budget, and what is included, like taxes on car leases and increased cell phone taxes, are incredibly regressive. The mayor's proposals on crime, education, and the minimum wage make this two-tiered system clear.
The CTU remains committed to policies that have real impact, including revenue-generating plans like the LaSalle Street Tax and TIF reforms that create real, fair investment streams rather than more of the same warmed-over conventional wisdom. We support the $15 minimum wage, the privatization, transparency and accountability ordinance, restoration of cuts to social services, and real funding for retirement security. These proposals are possible when we survey the entire city, not just those who can be seen from the fifth floor.
The city council is expected to take up the 2015 fiscal blueprint on November 19 after budget hearings are held.
Image: AP Photo/M. Spencer Green