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* From Mayor Rahm Emanuel’s budget address today…
So, here is the hard truth: in less than four years, payments to meet our pension obligations will comprise 22 percent of the City’s budget – one out of every five dollars. That’s $1.2 billion of taxpayer money, and growing, each year after that.
Think about it this way: $1.2 Billion dollars is close to what we spend on all salaries for our Police Department. $1.2 Billion dollars would pay for the resurfacing of 32,000 blocks in Chicago’s neighborhoods. $1.2 Billion dollars could build 10 new high schools and 12 new neighborhood libraries every year. $1.2 Billion dollars could pay for the combined cost of public health programs, garbage collection, tree trimming, rodent control, street light fixing, pot-hole filling, recycling, street cleaning, snow-removal, and programs at our parks and for our seniors every year.
Our taxpayers and residents should not be asked to choose between pension payments and public safety or pension payments and paved streets, or pension payments and public health.
If we choose to keep those services and make no changes to our pension system, you and I would have to ask taxpayers to pay 150 percent more in property taxes. That is unacceptable to me. I think it is safe to assume it is unacceptable to you. And I know it is absolutely unacceptable to the homeowners of Chicago.
No one should underestimate the difficult choices involved in delivering the reforms we need to stabilize our pensions and our pension payments. But they pale in comparison to the alternative – eliminating all of the essential services that Chicago’s residents expect and pay for.
We must come together to ensure security for both our city retirees and our city taxpayers. And what we really need is for our representatives in Springfield to step up, take their share of responsibility and not miss this critical opportunity once again.
Discuss.
posted by Rich Miller
Wednesday, Oct 10, 12 @ 11:43 am
Sorry, comments are closed at this time.
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Translation:
“Quinn, don’t make me come down there, young man.”
Comment by hisgirlfriday Wednesday, Oct 10, 12 @ 11:48 am
This could be a little off track, but…
It is another great day in Cenral IL Rush just got knocked off the air for the Cardinals pre game.
Comment by CircularFiringSquad Wednesday, Oct 10, 12 @ 11:50 am
Unfortunately, when Downstate steps up, Chicago then steps on!
Comment by orlkon Wednesday, Oct 10, 12 @ 12:00 pm
Pat Quinn was put on this earth to reform the pension system. His own words. Too bad he is just too incompetent to get it done.
Maybe we need to let Rahm do it.
Comment by Cassiopeia Wednesday, Oct 10, 12 @ 12:02 pm
Kudos to Quinn. This is the launch of a powerful grassroots campaign.
Comment by Dan Bureaucrat Wednesday, Oct 10, 12 @ 12:04 pm
Words, words, words, but no concrete proposals. The problem with politicians is they cannot, and will not spell out where the needed cuts should come from lest they offend some constituency. This is why across the board cuts are the only answer because they spread the pain equally. Cut all state appropriations by 4% across the board and freeze them at that reduced level. That would reduce state expenditures by well over a billion dollars a year. No senior administrator worth his or her salt can’t manage their way through a 4% cut. Over time all budget and pension problems will disappear. It is the only politically acceptable approach.
Comment by wishbone Wednesday, Oct 10, 12 @ 12:04 pm
Mayor Emanuel is clearly crying out for Springfield to pass TIF reform.
That’s about $500 million a year in property tax revenues socked away in mayoral slush funds that could go to the general fund.
Comment by wordslinger Wednesday, Oct 10, 12 @ 12:05 pm
Off topic: Since the mayor mentioned “rodent control” in his speech, it is worth noting that the rat population of Chicago (and the neighboring suburbs) is exploding. Rat traps are commonplace in most shopping malls and along the perimeter of many restaurants. Some Streets and Sanitation employees have faulted Emanuel’s new zone method of garbage collection which replaced the traditional ward by ward method of assigning garbage trucks.
Comment by Esquire Wednesday, Oct 10, 12 @ 12:08 pm
Hot air. While noble on the surface, it’s just grandstanding to make sure he gets all the blame shoved elsewhere. Can’t look anti-labor AND save your Illinois political career of course.
Comment by Shemp Wednesday, Oct 10, 12 @ 12:15 pm
Since he knows this crisis is coming why not start providing for it now in this budget?
Comment by We can wait Wednesday, Oct 10, 12 @ 12:18 pm
why must we race to the bottom people?
Comment by Madison Wednesday, Oct 10, 12 @ 12:25 pm
Tell Rahm to cool it: PQ and God will fix everything!! Oh yea, that grassroots plan will be in full swing tomorrow and the legislative leaders will be begging the Gov to call them back next week!!!!!!!!!!
Comment by Anonymous Wednesday, Oct 10, 12 @ 12:27 pm
Why race to the bottom when you can just jump off a cliff and save the energy?
Comment by Fight for Chicago Wednesday, Oct 10, 12 @ 12:28 pm
It’s not too hard to decipher. Reforms to municipal pension laws will have to be done by state statute. This has nothing to do with Pat Quinn. Rahm Emmanuel will have to make that case.
Comment by Show me the Money Wednesday, Oct 10, 12 @ 12:31 pm
And Jesse James and the Youngers blamed the Yankees and the railroads.
Comment by Anon. Wednesday, Oct 10, 12 @ 12:36 pm
So does Rahm ever explain that his Party gave such lavish, unsustainable pension benefits to public employees over the years in return for labor walking precincts, etc. for party candidates?
Comment by formerpolitico Wednesday, Oct 10, 12 @ 12:38 pm
The State’s share of responsibility for local pensions-let’s see, that would be zero.
Next case.
Comment by Arthur Andersen Wednesday, Oct 10, 12 @ 12:46 pm
I guess I can’t blame him for trying to win the spin game, but most of the payment is going toward benefits that have been already earned… I would love to see the state pass a statute that gives Chicago the ability to amend their pension plans as they see fit and see what happens then.
Comment by Just a Guy Wednesday, Oct 10, 12 @ 12:58 pm
@Wordslinger…..right on.
Comment by amalia Wednesday, Oct 10, 12 @ 12:59 pm
No doubt, the General Assembly has screwed up the state pensions, but Rahm really can’t blame Springfield for all of the city’s pension woes. Most the blame goes to Daley who inherited pension systems that were in decent shape and then reduced the city’s employer contributions during a time when the city had so much revenue they didn’t know what to do with it (flower boxes and wrought iron fencing for everyone!)
Unlike the state, Chicago has never based their employer contributions on real costs as determined by an actuary. Instead they’ve based payments on random percentages of the property tax levy. Daley lowered the percentages when the funds were flush in the 90’s and never moved them back up when revenues tanked.
Comment by Frank Wednesday, Oct 10, 12 @ 1:00 pm
We could pass gambling and dedicate that to pensions and give the localities a cut instead of wahtever the money was originally going to be spent on
Comment by western illinois Wednesday, Oct 10, 12 @ 1:07 pm
If memory serves - Emanuel went to Springfield just last year, preaching pension reform. Nothing happened.
That exercise in futility reminds me now of Rich Daley and gun control. Curiously, Daley never had any traction on that issue in Springfield.
What happens if, in similar style, Emanuel goes nowhere in Springpatch on reforming municipal pensions?
Well - unacceptable as Hizzoner may find it today, property taxes may go way, way up.
What’s particularly curious to me is that with today’s remarks, Emanuel is (unintentionally, to be sure) sending a disturbing message to owners of Chicago real estate - homeowners in particular.
The inadvertent message is this: even with the lousy real estate market, it may be smart to sell and get out of Chicago during the next year or two.
Yep. Sell and leave, before it’s taxes out the wazoo. Sell and leave, before the prospect of eat-’em-alive property taxes depresses home prices even more.
Believe me, I’m not advocating for “tax flight”, here or anywhere else in the country. Personally, I wish Emanuel every success in getting pensions straightened out. I’m just sayin’.
I’m outta here.
Comment by Third Reading Wednesday, Oct 10, 12 @ 1:20 pm
There’s plenty of blame to spread around,but while
Quinn and Rahm bicker Madigan is looking foward to Lisa being Governor.
Comment by mokenavince Wednesday, Oct 10, 12 @ 1:26 pm
Diversion tactic so no one will look at his TIF slush fund. I love hearing stories about how thriving restaurants in trendy neighborhoods (e.g. the Hopleaf) get TIF cash boondoggles at the same time Rahm wants to steal my pension money.
Comment by wert Wednesday, Oct 10, 12 @ 1:36 pm
Rahm’s just mad that the city will actually have to go to referendum for once to increase property taxes past what PTELL provides for.
Chicagoans will now have to make a choice whether to “save their city” by choosing to pay more in local property taxes. I think the days of historically low rates and anemic growth in property tax extensions in Chicago are about to end.
Comment by Money Walks Wednesday, Oct 10, 12 @ 1:40 pm
I read the script and assumed it was police and fire pensions he was talking about, but wasn’t sure if that also included teach pensions. The unfunded mandate on police and fire pensions is crippling ever cities budget in Illinois. If the State could do one thing to ease the financial burden on communities it would be to enact further reforms or changes on the police and fire pension mandates. In Springfield alone they account for around 17% of the GRF, this does not even include other pension costs or current salaries and benefits for police and fire employees.
Comment by Ahoy! Wednesday, Oct 10, 12 @ 1:51 pm
Wishbone is on point and right. Cross the board cuts are the only way out in the present environment.
Comment by RSW Wednesday, Oct 10, 12 @ 1:51 pm
Honest question here: is the State at fault for the city’s pension problems like the State is at fault for the State’s pension problems? My guess is no but I admit I am ignorant of the true reason the city’s pensions are underfunded.
Comment by Just Me Wednesday, Oct 10, 12 @ 1:53 pm
Wishbone and RSW - Across the board cuts are the easiest not the best. Some agencies could survive a cut of 4% and not skip a beat. Others like DNR would collapse with a cut of 4%. Agencies that used to depend on dedicated funds that were swept to spend elsewhere are now suffering. The problem has been that there has never been an educated knowledgeable approach done to where cuts can be made. That takes too much effort. So the politicians rob any free money they see, not listening to the reasons that money should remain where it is and they take the quick and easy way to cuts. Across the board cuts are blind and as a result cause more harm than good.
Comment by Irish Wednesday, Oct 10, 12 @ 2:29 pm
Irish, I agree with some of the things you said. But it is better to make agencies justify need for additional funding than arguing who should be cut.
Comment by RSW Wednesday, Oct 10, 12 @ 2:38 pm
Wishbone and RSW and Irish - Accross the board cuts also hurt well run agencies much more than poorly run ones. A well run agency that has weeded out wasteful spending and operates relatively efficiently could be hurt badly by an arbitrary cut. A poorly run agency just has to be a little less bad.
Comment by titan Wednesday, Oct 10, 12 @ 3:19 pm
Across-the-board cuts don’t work. They reduce federal matching funds, meaning that some agencies end up with an even larger reduction in funds.
They don’t align with the problem of stable or growing populations of people who need services. (I.e., it’s hard to cut Dept of Corrections spending by 4% if the prison population is actually growing.)
Agency directors can’t unilaterally change the terms of existing contracts, so those “across-the-board” cuts end up falling heavily on the budget items that are not contractually obligated, even if that’s not where the fat is.
Also, during the ARRA years, states were penalized if they tried to impose across-the-board cuts on ARRA-funded programs.
Don’t forget the whole crazy Illinois system of special funds dedicated to very specific uses; not sure how you’d impose the across-the-board cuts there, or how you would decide to divvy up the dollars you’d slice off the top of each fund.
Then there’s Irish’s excellent point about across-the-board cuts hitting well-managed agencies harder than badly managed ones. (And lord knows DNR has already sustained far more than its share of cuts, thanks to Rod.)
Oh, and don’t forget the political cost of cutting the State Police by 4% and then seeing an increase in fatal car crashes.
Look — if cutting the budget were that easy, it would have been done by now.
Not to get all “the State budget is just like a family’s budget,” but — how, exactly, would you cut your own family budget by 4% across the board? How do you talk your mortgage holder into accepting less? Your car payment? Your car insurance? How do you cut your heating gas bill by 4% if the temperature drops below zero in November and stays there until March? How do you cut your food budget by 4% if the price of food goes up 3%? What if you have another child, or if your nephew comes to live with you for six months?
As we all know from our own experience, the big problem areas in budgets tend to be the fixed costs. And blithely saying “cut across-the-board” doesn’t make it feasible.
Comment by soccermom Wednesday, Oct 10, 12 @ 4:02 pm
Ralph Martire’s group had a great primer on the pension situation that spoke to the “pension payment ramp” as the true culprit. Why is no one talking about the Ramp??
Comment by Hawkeye Wednesday, Oct 10, 12 @ 4:10 pm
The Ramp is insane. The Ramp has nothing to do with reality. The Ramp needs to be rebuilt. I hate the Ramp.
Comment by soccermom Wednesday, Oct 10, 12 @ 4:14 pm
This type of rhetoric by Rahm will go a long way to keeping relations between he and Quinn on the icy side. I see a trainwreck up ahead in City/State relations. Deja vu; re: the Blago years.
Comment by Loop Lady Wednesday, Oct 10, 12 @ 4:19 pm
“Some Streets and Sanitation employees have faulted Emanuel …”
Some S&S employees are idiots. Trash is picked up just as often, but on a different schedule. Do the rats know the difference b/t Monday and Thursday? Do the rats know the ward boundaries. Idiots.
Warm winter is the primary culprit. Daley’s reductions in the rat squads didn’t help.
“the city will actually have to go to referendum for once to increase property taxes past what PTELL provides for.
Chicagoans will now have to make a choice whether to “save their city” by choosing to pay more in local property taxes. I think the days of historically low rates and anemic growth in property tax extensions in Chicago are about to end. ”
I think you have a mistaken view of how Chicagoans will vote. I think that Chicago filing chapter 9 is more likely than city voters approving a doubling of the City’s piece (note: this means something like a 30% increase in tax bills, not 150%) of the property tax.
Comment by Chris Wednesday, Oct 10, 12 @ 4:50 pm
The mayor’s right. The math doesn’t lie.
Comment by Chicago homeowner Wednesday, Oct 10, 12 @ 4:50 pm
Word:
A substantial amount of those TIF increment monies are already committed - for repayment of TIF redevelopment bonds, and other obligations to get businesses to enter into redevelopment efforts.
Eventually it could free up a fair amount of money - but not immediately. One of the problems is that there is just not one central depository of information about on-going TIF obligations. It’s scattered all over.
Be nice to know how much bonded indebtedness exists specifically related to TIF districts, and what money (repayments) are owed when.
Until then, who really knows?
Comment by Judgment Day (Road Trip) Wednesday, Oct 10, 12 @ 4:53 pm
While interesting it would be nice to have more details. For example suburban teachers are now routinely retiring with $100,000 salaries and $75,000 pensions after 33 years on the job at age 55, with 3% annual COLA. How does that compare to the various Chicago municipal workers? Was benefit increase after benefit increase passed into law such as is the case with the State of IL pensions (TRS, SURS, SERS, JRS, GARS)?
Comment by Mark Wednesday, Oct 10, 12 @ 5:01 pm
I’m a Chicago property tax payer. There is no TIF line amount on my property tax bill. There is no transparency regarding TIF. I expect elected officials to exercise their fiduciary duty. I get a little tired of the finger-pointing. I also get a little tired of people dumping on retirees.
Comment by Emily Booth Wednesday, Oct 10, 12 @ 5:34 pm
If ever a local pension fund goes belly up, the court will order the state to contribute. Pension benefits are, under the state constitution, contractual in nature. When the judge asks. who promised the benefits to local public emplpyees, the answer is: the state. When the judge asks, where is the promise written, and answer is: state statute, passed by the state legislature. When the judge asks, who has the authority to regulate the p local public pension funds, oversee their investments, and make sure they comply with the law, the answer is: the state. When the judge asks, who forbade the local governments from contributing more money, as is done in statute, the answer is: the state. Sooner or later, the judge will conclude that the state made the promise and made the mess associated with the mess, and say: then the state must contribute money to the solution. .
Comment by chicagopublius Wednesday, Oct 10, 12 @ 6:14 pm
If you don’t want to raise taxes:
Unless it declares bankruptcy, the city cannot renege on pension obligations already earned. So it has to cut back on services it’s providing or somehow provide those services at lower cost. If you can’t cut costs enough by eliminating waste — cutting unnecessary jobs and better organizing those that remains — the only thing that is left is to cut services or cut the pay of the competent people who are left to provide the services, and you’ll get what you pay for.
Unless you’re talking about cutting fat or cutting services, cutting payroll (which includes pensions and other benefits) will not work. You’ll just get less or lousier services.
Comment by Anonymice Wednesday, Oct 10, 12 @ 8:35 pm
chicagopublius wrote:”…then the state must contribute money to the solution…”
I am sorry but the state doesn’t have the money to contribute. No judge can compel a legislature to fund something when they are broke even where they are primarily responsible, and that is NOT the case here.
Comment by wishbone Wednesday, Oct 10, 12 @ 8:36 pm
Titan is correct. Across-the-board cuts are pure laziness.
Across the board cuts make no more financial sense than across the board spending increases.
We need to stop spending money on things that don’t work or are less important and focus our resources on things that are important and do work.
Like a well-balanced diet, a well-balanced budget must be smart and sustainable - economically and socially.
The Adkins Diet, South Beach Diet, or any of the other yo-yo diets will not fix our budget.
Comment by MathCounts Wednesday, Oct 10, 12 @ 9:01 pm
So Rahm, how was lunch with the Chicago Civic Committee?
Comment by J Wednesday, Oct 10, 12 @ 9:06 pm
“Others like DNR would collapse with a cut of 4%.”
Give me a break. I would fire any DNR Director who could not manage a 4% cut.
Comment by wishbone Wednesday, Oct 10, 12 @ 9:19 pm
Why is is that everytime someone from Chicago complains about the so called TRS double taxation on Chicago taxpayers it isn’t refuted with information as to how Chicago receives a disproportionate amount of education funding from Springfield- Chicago residents may contribute to downstate and suburban school pensions through their tax payments but they more then get it back through the receipt of more $$ in per student school funding paid for by those suburban and downstate taxpayers he is complaining get a free pension ride- Perhaps Rahm needs a lesson in Math from his former Boss- The $$ suburban schools receive from Springfield for education has gotten smaller and smaller every year to the point where it is almost non-existent
Comment by Sue Thursday, Oct 11, 12 @ 6:27 am
Wishbone, are you aware that DNR’s share of GRF has fallen from $106 million in 2002 to but is now just $45.4 million? That headcount is down by more than 400 over the same period? That staffing at Illinois Beach State Park, which has more than two million visitors a year, has fallen from 26 to five? I guess cutting another 4% wouldn’t make that much difference, given that they’re already hemorrhaging. But there’s no way on this green earth that they can provide anything like a realistic level of service.
Comment by soccermom Thursday, Oct 11, 12 @ 7:30 am
“Rahm’s just mad that the city will actually have to go to referendum for once to increase property taxes past what PTELL provides for.”
I believe that the City of Chicago has “Home Rule” status. PTELL limits does not apply to Home Rule jurisdictions.
“I’m a Chicago property tax payer. There is no TIF line amount on my property tax bill. There is no transparency regarding TIF.”
You would only have a line about TIF on your tax bill is your property is actually located within a TIF district. The listing of the breakdown of your property taxes by tax district is usually known as the “Itemized Statement” portion of your tax bill, and reflects just those tax districts and amounts that you are paying taxes to.
Btw, ‘TIF’ was never about ‘transparency’. It was always about redevelopment, and that’s how the legislation was written.
And TIF in practice is very difficult to explain, and a small, but very sophisticated cottage industry has grown up statewide which is very dedicated (IMO) to finding new and novel ways to expand the reach of TIF districts into endeavors that were never intended by the people who wrote the original (initial) legislation.
Comment by Judgment Day Thursday, Oct 11, 12 @ 8:44 am