From a new water and sewer tax to O’Hare bonds and TIFs, Progress Illinois rounds up highlights from Wednesday’s Chicago City Council meeting.
Without debate at Wednesday’s Chicago City Council meeting, aldermen authorized a new water and sewer tax to shore up the city’s financially ailing municipal pension fund.
The water and sewer tax of nearly 30 percent will be phased in over four years and generate $239 million annually when fully implemented.
After the phase-in period is complete in 2020, the tax will cost the average homeowner an extra $226 annually.
The 10 “no” votes came from: Alds. Leslie Hairston (5th), Susan Sadlowski Garza (10th), Patrick Thompson (11th), Toni Foulkes (16th), David Moore (17th), Chris Taliaferro (29th), Scott Waguespack (32nd), Gilbert Villegas (36th), Anthony Napolitano (41st) and John Arena (45th).
Aldermen OK’d the new tax after recently approving various tax hikes — including a record property tax increase last year — to address the unfunded liabilities in the city’s police, firefighters and laborers pensions funds.
“We simply cannot saddle Chicago residents with another property tax increase,” Ald. Ed Burke (14th) said today before the roll call vote.
“A graduated utility tax increase on water over the next several years is the alternative that makes the most sense and is in the best interest of the city and its pension fund members,” he added. “This gradual phase in of the water tax, while not the hoped for panacea to cure the pension deficit, will nevertheless go a long way toward achieving financial stability and head off a potential disaster, which is only, only nine years down the road.”
Speaking to reporters after the meeting, Emanuel said the city of Chicago now has all four of its pension funds “on a path of solvency rather than insolvency.”
“Our financial picture is not where it was not only when I came into the office, it’s dramatically different than where it’s been over decades,” Emanuel said. “It’s in a better position financially because we’ve done the necessary things to fix it.”
“Each of the funds,” Emanuel added, “have a revenue stream that gets ’em through the ramp to the arc, and there will be additional revenue. Nobody ever said that’s not the case. It’s not a one-time, but now they have individual revenue sources to fund the obligations for retirees.”
Hairston was among the “no” votes. She said she could not support the tax increase, in part, because it alone will not fix the pension fund, which has $18.6 billion in unfunded liabilities. The city will reportedly need more revenue after the tax hike is fully phased in order to get the pension fund 90 percent funded over the next 40 years.
“We’re still gonna have a $300 million deficit,” Hairston told Progress Illinois. “They could have put language in there to make it dedicated only for pensions. I see they have something for capital investment, which is what we’ve seen for years now: They say one thing and then they use the money for something else. And I wanted to make sure that it’s used for the pensions. If we’re going to take a vote and increase the fees, whether you call it a property tax, whether you call it a water tax, it’s still the same person, and we keep going to the same well for water. And at some point in time we have to find good revenue streams and start looking at ways to make other people pay their fair share.”
O’Hare Bond Deal Gets Approved, Black Caucus Members Vote ‘No’
By a close 26-21 vote, aldermen approved $3.5 billion in bonds for O’Hare International Airport.
Most of the “no” votes came from Black Caucus members, who have been raising concerns over minority representation in contracting and hiring at the airport.
“We talked about the numbers historically, the lack of people of color particularly African Americans, in this department in the contracting for more than a decade,” Hairston said in an interview. “Enough is enough. And the numbers keep getting worse instead of getting better.”
Ald. Pat Dowell (3rd), another “no” vote, added in a statement: “We remain outraged at the gross inequity in contracting by the Department of Aviation, and in the hiring practices at the law firms that stand to make millions off this deal. The Black Caucus again demands that the Department of Aviation demonstrate clearly that it is taking immediate steps to address these concerns.”
Emanuel addressed the issue in remarks after the meeting.
“I take the voice, if you look at the vote, of the members who voted, I take their issues very seriously,” he said, adding that he spoke with Chicago Aviation Department Commissioner Ginger Evans over the weekend.
Emanuel told Evans “she had some work to do, because I respect the principle of what the aldermen were saying, and see that principle and that value.”
“The aviation commissioner has some work,” he added, “but that doesn’t mean our earnestness of improving both the work that minority- and women-owned businesses do, but also the overall effort, not just at aviation, throughout the city of Chicago.”
Alds. Sadlowski Garza, Waguespack, Milly Santiago (31st) and Deb Mell (33rd) joined Black Caucus members in voting against the O’Hare bond deal.
Black, Latino, Progressive Aldermen Push For Financial Transaction Tax
Chairmen of the Chicago City Council’s Black, Latino and Progressive Reform Caucuses teamed up Wednesday to call for a tax on LaSalle Street financial transactions.
A non-binding resolution from the aldermen seeks state legislation that would impose a .01 percent tax on transactions made through the Chicago Board Options Exchange, the Chicago Mercantile Exchange and the Chicago Board of Trade.
The aldermen envision a plan that steers 50 percent of the financial transaction tax’s revenue to the state of Illinois general operating fund, 10 percent to the Chicago Public Schools pension fund and 40 percent to the city of Chicago general operating fund.
“It is long past time that we ask these financial institutions, which benefit greatly from operating in the third largest market in America, to pay a negligible tax of just .01 percent on transactions to ensure that the city get back on stable financial footing,” Waguespack, chairman of the Progressive Reform Caucus, said in a statement. “Chicago can’t remain a world class financial center if we don’t get serious about ensuring that Wall Street and LaSalle Street institutions work together with us as authentic partners.”
Ban Driverless Cars in Chicago?
Burke and Ald. Anthony Beale (9th) introduced an ordinance Wednesday to ban driverless cars in Chicago.
The aldermen introduced their proposal as a “preemptive strike after an announcement by Uber that it is launching a fleet of self-driving cars in Pittsburg which will be accompanied by a ‘co-pilot’ staff member or engineer inside the vehicle,” reads a news release from Burke’s office.
“We do not want the streets of Chicago to be used as an experiment that will no doubt come with its share of risks, especially for pedestrians,” Burke said in a statement. “No technology is 100 percent safe.”
Affordable Housing Amendment Proposed For TIF Projects
Also on Wednesday, Alds. Joe Moreno (1st) and Ameya Pawar (47th) introduced an amendment to strengthen the city’s Affordable Requirements Ordinance involving residential TIF-funded developments.
Under the current ARO, TIF-funded housing projects must designate 20 percent of the building’s units as affordable. Developers, however, can pay into the Chicago Low-Income Housing Trust Fund rather than building all the required affordable units on-site.
Moreno and Pawar want to change the ARO, mandating that all required affordable housing units are built on-site at TIF-funded residential projects.
“You can’t take money with one hand, the city’s money, and return it with another to not build affordable housing on-site,” Pawar said, referring to developers. “It’s that simple. I think this is an easy fix.”
Chicagoans Hold Police Accountability, TIF Protests Before Council Meeting
It was a busy morning at City Hall before the council meeting.
Two separate groups of police accountability activists — one organized by the Chicago Alliance Against Racist and Political Repression (CAARPR) and the other by the Community Renewal Society (CRS) — criticized the mayor’s police reform plan.
For his part, Emanuel wants to replace the Independent Police Review Authority (IPRA), which investigates police-involved shootings, with a Civilian Office of Police Accountability (COPA) and create a new public safety deputy within the city’s inspector general’s office. The ordinance is expected to go before aldermen at a September 29 special council meeting.
CAARPR’s Frank Chapman said CPAC supporters will settle for nothing less than “community control of the police,” saying the mayor’s proposal represents a “fake” police accountability system. The Rev. Robert Biekman, a CRS leader, said the mayor’s ordinance lacks “teeth” for real change.
TIF was another hot topic this morning at City Hall.
Community members and education activists pressed aldermen to vote on a stalled citywide TIF surplus ordinance. The ordinance seeks to use TIF surplus funds to help alleviate budget cuts at local schools.
Before the education activists spoke out, supporters and authors of the book “Chicago Is Not Broke” gathered at City Hall and distributed copies of the text to aldermen and the mayor’s office.
The group — including TIF activist Tom Tresser and representatives from the League of Women Voters of Illinois — want aldermen to hold forums in their communities on the city’s budget and the revenue proposals detailed in the book, which advocates for TIF reform, a progressive income tax, a financial transaction tax and other ideas.
Former Chicago Ald. Dick Simpson, a political science professor at the University of Illinois at Chicago, co-authored a chapter in the book on the cost of corruption on city and state taxpayers.
“The message of this book is very simple: Chicago ain’t truly broke,” Simpson said. “We don’t have to continue raising the property tax, the water tax, the sewer tax, the garbage tax and taxing everything that doesn’t move fast in Chicago to continue to oppress particularly the homeowners and to begin to roll back what we just gained in coming out of the recession.”