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Local governments hit in FY 15 fix

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* Rick Pearson has a pretty good take on what newly reelected Mayor Rahm Emanuel needs from the state to help balance his budget, including a discussion of the city’s looming pension costs. Go read the whole thing, but here’s a little nugget that didn’t get much play last week…

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In a new development last week, the Illinois Department of Transportation warned cities across the state that they would see a $27.5 million cut in their share of state motor fuel tax payments, equal to about $1 per resident. It’s part of a deal struck by Rauner and lawmakers to use road construction money to plug other gaps in the current year’s state budget.

* Greg Hinz also takes a look at what Emanuel may want…

Emanuel can forget about getting the state to chip in more for Chicago teachers’ pensions. Not going to happen. But Rauner seems open to a new casino that could provide the city $100 million a year. And he and Emanuel both have talked about “modernizing,” “expanding” or otherwise widening the state’s sales tax to cover more services, with the city receiving a healthy cut of the take.

Of course, Rauner will exact a price. It likely will include tacit acceptance of some of the budget cuts he’s been proposing. More recently, he seems to be signaling that he also will require support for some of his anti-union initiatives. Could Emanuel see his way to put some Democratic votes toward, say, further reforms in the workers’ compensation system? Maybe.

Regardless, Emanuel almost certainly must raise property taxes, as I suggested in my last column. And there, too, he will need Rauner. Not to raise taxes per se but to implement something Emanuel’s campaign floated a few weeks ago and then abruptly pulled off the table: a big boost in the homestead exemption so that low- and moderate-income homeowners are pretty much exempted from any property tax hike that comes down. Such a bill could end up being good politics for both men.

* Meanwhile, back to pensions…

“There is going to be substantial movement in Springfield one way or another,” [City Treasurer Kurt Summers] said. “Some of the ideas, we’re not going to see this session. Period. Some of them we are but they are going to be a part of a larger structural change.”

Summers says there’s a bill nearing passage in Springfield that that would give Teachers Pension Funds their own tax levy. No, says Summers, that doesn’t mean higher property taxes.

What it does mean, he says, is that school systems couldn’t delay payments to their pension funds to pay for other things.

posted by Rich Miller
Monday, Apr 13, 15 @ 9:12 am

Comments

===Summers says there’s a bill nearing passage in Springfield that that would give Teachers Pension Funds their own tax levy. No, says Summers, that doesn’t mean higher property taxes.===

Then it can only mean that implementation of the new levy would be subject to a reduction in other, existing levies?

Comment by veritas Monday, Apr 13, 15 @ 9:24 am
= Then it can only mean that implementation of the new levy would be subject to a reduction in other, existing levies? =

That’s exactly how that bill is currently written.

Comment by cover Monday, Apr 13, 15 @ 9:31 am
“school systems couldn’t delay payments to their pension funds to pay for other things.”

Anybody see the irony in that?

Comment by archimedes Monday, Apr 13, 15 @ 9:31 am
Does anyone know what bill number they are talking about with this? I would like to track it, if possible.

Comment by East Central Illinois Monday, Apr 13, 15 @ 9:33 am
===Summers says there’s a bill nearing passage in Springfield that that would give Teachers Pension Funds their own tax levy. No, says Summers, that doesn’t mean higher property taxes.===

I’d like to see that actually. That’s how things used to be done and it’s the intermingling of monies that got us in this fix.

Comment by Carhartt Representative Monday, Apr 13, 15 @ 9:34 am
Admiral Rauner: Well, we gave him the campaign donations molasses . Now let’s feed him the budget cuts sulfur.

Comment by Norseman Monday, Apr 13, 15 @ 9:38 am
East Central Illinois– the bill is HB 3695.
The bill doesn’t cover the entire pension contribution to Chicago Teachers’ Pension fund, just part of it. The remainder would still be at discretion of CPS

Comment by PensionResearcher Monday, Apr 13, 15 @ 9:43 am
There are certainly union-related things that need dealing with. The pension double-dipping. The final salary gaming. But much of the problem lies with supervisory positions that are also pensionable, and Rauner ignores this distinction between supervisory feather-bedding and the state of the rank-and-file at his political peril and Illinois’ financial peril.

Comment by Angry Chicagoan Monday, Apr 13, 15 @ 9:47 am
He wants a casino and he wants to dump the Thompson Center. Maybe he can kill two birds with one stone and sell it to someone who’ll turn it into a casino. Gambling on the lower levels with hotel rooms upstairs.

Comment by Anon Monday, Apr 13, 15 @ 9:50 am
If state taxes stay at the current level, then the local governments will have the flexibility of taxing residents for the necessary services and not the extras that aren’t needed, but make for nice press releases. Why pay higher taxes just to send money to Springfield and then pay government bureaucrats at to request and then distribute grants and send back tax money.

Comment by Apocalypse Now Monday, Apr 13, 15 @ 9:54 am
Who are these Democratic votes Hinz believes Emanuel can put on votes? Does Emanuel have some independent power base in Springfield?

Rauner wants to grab back half of munis income tax revenues and he’s still billions short in his own budget. I don’t think Emanuel can count on any help from Rauner.

Comment by Wordslinger Monday, Apr 13, 15 @ 9:57 am
A new casino? Is that $100M new additional money over the state’s portion of what gamblers currently pay or is that simply a reslicing of the current gambling revenue pot?

Comment by zatoichi Monday, Apr 13, 15 @ 10:04 am
@Wordslinger was thinking the same thing… not sure if Rahm could deliver a single vote.

Also the idea of Rahm working with Rauner is a dangerous one for Rahm to say the least. Obviously Rahm won, but it was a bit of a scare for a while there and he hasn’t been able to shake Mayor 1%… working with Rauner while ignore the Sen Dems (and House) might not be the smartest move.

Comment by From the 'Dale to HP Monday, Apr 13, 15 @ 10:07 am
Many locals I know found out about the MFT cut through the press, not through IDOT.

Comment by Shemp Monday, Apr 13, 15 @ 10:47 am
“Also the idea of Rahm working with Rauner is a dangerous one for Rahm to say the least. Obviously Rahm won, but it was a bit of a scare for a while there and he hasn’t been able to shake Mayor 1%… working with Rauner while ignore the Sen Dems (and House) might not be the smartest move.”

And while Rahm one, he did it while expressly opposing some big parts of the Rauner agenda.

Comment by Arsenal Monday, Apr 13, 15 @ 11:04 am
===Admiral Rauner: Well, we gave him the campaign donations molasses . Now let’s feed him the budget cuts sulfur.===

Henry Fonda couldn’t have said it better - Norseman -

To the Post,

Governors trump Mayors, Rahm worked for Rauner.

Nothing changed. Ask away, not much give or take right now…

Comment by Oswego Willy Monday, Apr 13, 15 @ 11:27 am
An IDOT BLRS Circular Letter went out a week or so ago with more information about the MFT sweep. It took them by surprise. Then it took a couple of weeks to figure out how the sweep was going to be implemented.

Comment by Huh? Monday, Apr 13, 15 @ 12:50 pm
Sounds like a good idea. Either use a separate tax levy, or mandate contributions as with the municipal retirement funds in most governments.

Comment by Rapscallion Monday, Apr 13, 15 @ 12:59 pm
==- Arsenal - Monday, Apr 13, 15 @ 11:04 am:==

Just like humble, inclusive Rahm, only time will tell if opposed to Rauner Rahm is substantive or just an electoral act.

Comment by Precinct Captain Monday, Apr 13, 15 @ 2:03 pm
Sounds like Chicago’s school “bailout” will be to allow CPS to slide further into insolvency? Never let a good crisis go to waste!

Comment by Lumbada Monday, Apr 13, 15 @ 2:18 pm