Watch the video: The Mayor speaks out for the first time since Friday's legal defeat of the city's pension reform law. Are higher taxes now imminent?
Mayor Emanuel is back in Chicago today after a weeklong vacation in Europe.
He returns to a fiscal situation that is bleaker than it was when he left, thanks to last week's court ruling throwing out a law that cut benefits for many city retirees. City Council is now scrambling to find ways to come up with billions of dollars in new revenue to fund the pension systems in the coming years.
Emanuel, fresh from a trip to France, turned his attention this morning to the city's booming convention and tourism economy.
“We had another record-breaking year for hotels in the city of Chicago, and another record-breaking year in hotel revenue so we can continue to invest in our neighborhoods and our children and communities throughout the city of Chicago,” the mayor said.
He and other public officials broke ground on the new Marriott Marquis, a 40-story, 1,200-room hotel that will connect to McCormick Place, financed partially by $55 million in city Tax Increment Financing dollars. The neighborhood's Ald. Pat Dowell says it's a public investment that's well worth the money.
“You’re not just going to have the hotel,” she said. “You’re going to have restaurants here, you’re going to have other hotels built nearby, entertainment venues along Motor Row, so there’s a spinoff benefit and the TIF money will pay for itself in probably about seven years."
The city's perilous financial condition, driven by employee pension systems that are collectively $30 billion in debt, does not yet seem to be driving away private investment.
“No matter what the solutions are to those fiscal issues, when you get a city that’s growing, building jobs, that’s a good thing and it’ll make those problems easier to solve, not harder to solve,” said Marriott International CEO Arne Sorenson, who said he was "excited" about the expansion of his company’s brand in Chicago.
But City Council members acknowledge that higher taxes are almost certainly a fait accompli, and perhaps more imminent given Friday's defeat of a law negotiated with many of the city’s public labor unions that would've partially reigned in retiree pension costs.
“We’re going to have to be creative. The entire burden can’t be placed on property tax payers. We have to find other ways to raise money,” Dowell said. “One that I support, that I know that the mayor doesn’t support, is the commuter tax. I know that’ll raise a tremendous amount of money.”
The mayor is downplaying any talk of new revenue, saying he still believes the pension reform law is constitutional and that the Illinois Supreme Court will see it his way.
“I’m not going to forego the conclusion that just because one judge ruled that way, the Supreme Court will rule that way, and I think the approach will stand the test of time,” Emanuel said. “Before I ask the taxpayers to put their hard-earned money on the line, I have to make sure the government and it’s bureaucracy – and the way it does business – is also on the line.”
Later this week, the council's progressive caucus will submit its proposals for new revenue to the mayor's office. It is expected to include a so-called LaSalle Street tax on financial transactions.
Watch a press conference following last Friday’s ruling with union representatives, retirees, and an attorney who worked on the plaintiffs’ behalf.