As more than a dozen folks line up to succeed him, Mayor Rahm Emanuel is set to release his final city budget before leaving office. He’s promising no major tax or fee increases, but there are significant new costs.
How will they be paid for?
You could call it a calm-before-the-storm type of budget: The city projected a $211 million budget shortfall. For the last four years, property taxes have gone up $550 million to pay extra pension costs. But homeowners will get a reprieve this year.
It’s clear that the next regime will have to tackle an extra billion (and counting) of pension payments in the coming years.
Some of the broad strokes of this year’s plan: It is a $10.6 billion total budget. That includes $25.7 million in extra costs as a result of the Chicago police consent decree and new police hires. The budget also includes $1.3 billion in pension costs, and $7.7 million in new youth mentoring costs, among other things. The mayor will give his budget address Wednesday morning in what has traditionally been a speech that touts past achievements as opposed to looking forward.
There will be a month or so of hearings before the entire City Council comes to a meeting of the minds on the final budget.
The controversial $10 billion borrowing proposal that has been floated to help defray some of the massive $28 billion pension debt will not be part of this budget plan. It was an idea that was announced to much fanfare a couple months ago.
Chicago Chief Financial Officer Carole Brown says she recommends that the mayor go ahead and do it, providing the timing is right and the city can get a good return on the bond market. But Emanuel has said he does not want to make a decision on it until after the budget process is through. At least one alderman says he believes the plan should be dead on arrival.
“If you look at what happened over the last week or so with interest rates going haywire, if we had this thing in place a week or month ago, it really would have gone south for taxpayers,” said Ald. Scott Waguespack (32nd Ward). “It shows you how fraught this is with the dangers of the market.
Also on Monday, mayoral candidate Paul Vallas gave his financial blueprint a test run before a City Club audience. His proposal calls for more money from Springfield, a five-year budget plan, a cut of the legalized cannabis revenue should that bill pass, and he says he wants the city to take advantage of a new provision in the federal tax law that allows for opportunity zones for low-income and minority communities.
Follow Paris Schutz on Twitter: @paschutz