Chicago Aldermen React to Mayor's Pension Plan

The burden of raising property taxes to fund the city's pension overhaul will fall on the Chicago City Council. So how do aldermen feel about shouldering that responsibility? And with the Police, Fire and Teacher pension systems still in need of reform, is this just the beginning?

Before aldermen vote lock, stock, and barrel to increase property taxes, some of them still have questions about just how high they might go. Mayor Rahm Emanuel's administration has proposed a $50 million increase in property taxes each year for the next five years, and say that breaks down to about $50 more per year for someone whose home is worth $250,000.

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But several aldermen briefed today by the mayor’s budget director say they still don’t know how much commercial property owners would pay. Others would like to know what the burden would be for owners of high-rises, or million-dollar homes.

“Because of complexity, the city needs more time to run the numbers to determine the actual costs for property owners,” said Ald. Brendan Reilly (42nd), who represents affluent downtown neighborhoods.

Despite this, the tenor of City Council is one of tepid support and resignation that they will have to make a difficult decision to raise taxes right before an election.

“I know that it’ll be a bitter pill for homeowners, but if we don’t do the responsible thing, I know those same individual homeowners would be upset with us because we didn’t do responsible work,” said Ald. Carrie Austin (34th), who is the council’s budget committee chairwoman.

“Any time you’re talking about increasing taxes, it’s not easy,” said Ald. Ameya Pawar (47th). “But the reality is every single alderman who ran for office knew that this term would be about pensions, and that we had to address this issue.”

Although powerful Ald. Ed Burke (14th) didn’t sound as resigned.

“The legislature has to act; we don’t know what they’re going to do. After that, we’ll take that subject up,” Burke said.

Still unresolved are the matters of Police, Fire, and Teachers pensions. The mayor was asked repeatedly whether or not he’d have to go back to the well and increase property taxes even higher to shore those systems up.

“We will begin to have conversations with police and fire on how to resolve their issue, but it can’t be done on the backs of taxpayers,” the mayor said. “Which is why I rejected an increase of taxes of 150 percent, I rejected pensions going belly up, and I rejected the idea of laying off thousands of people that results in cuts.”

Later, a mayoral spokesperson clarified his remarks by saying: “…right now there is a $600 million increase in pension payments for police and fire that is mandated by state law. Next year, he will work to achieve reforms that will lessen that tax increase – property or otherwise – that Chicagoans cannot afford.”

If the current proposed property tax hike is a bitter pill for aldermen, a future hike may be a nonstarter. Several aldermen today expressed their wishes that the city find other forms of revenue to fix the remaining three pension funds.

“We could tax some other things. I’ve heard someone say that we should tax marijuana,” said Ald. Austin. “Whatever we can do to lighten that burden off citizens.”

“If we ever get a city casino, all the revenue ought to be directed to the pension fund and nothing else,” said Ald. Bob Fioretti (2nd).

Other ideas floated have been to institute a tax on transactions at the Board of Trade or the Mercantile Exchange, or unlocking unused Tax Increment Financing revenue.

The Police Union today elected Dean Angelo Sr. to be its new president. The previous president had left under a cloud and had constantly feuded with the mayor. Still, FOP officials said they believe the mayor’s goal with police and fire pensions is to ask Springfield to allow the city to change the payment schedule, so they can avoid that hefty $600 million payment. They say they have not been negotiating with the city.

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