Details on Chicago Mayor Rahm Emanuel’s proposed water and sewer tax have been released.
The water and sewer tax would be phased in over four years and generate $239 million annually when fully implemented. The revenue would go toward fixing the city’s underfunded municipal pension fund, according to the mayor’s office.
The city already charges $3.81 per 1,000 gallons of water used.
Under Emanuel’s plan, the tax rate per 1,000 gallons of water would increase by 59 cents starting in 2017 and gradually go up to $2.51 by 2020.
The proposal, which could be considered by aldermen in September, also seeks to charge a 25-cent fee per month on bills not paid within 24 days.
“This agreement represents an incredible milestone on the road to financial recovery; for the first time in a very long time, every single one of our pension funds is on a path to financial security,” reads a statement from the mayor. “No longer will Chicago sit in the pension penalty box — where our economy is dogged by the decisions of the past and our neighborhood investments live in limbo.”
The Chicago City Council’s Progressive Reform Caucus has concerns about the proposed tax hike. The caucus is seeking, among other information, the “actuarial basis of the accounting used to come up with the proposal to fund the pension deficit by” hiking water bills.
“We are deeply committed to fully funding our pension obligations and ensuring Chicago workers are paid what they were promised in their contracts,” Ald. Leslie Hairston (5th) said in a statement. “But we are concerned that this plan unduly burdens Chicago homeowners already struggling with other tax increases, and that this plan won’t actually raise the funds needed to address the liability.”