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* Sun-Times…
The mayor’s painful prescription includes a four-year, $588 million property tax increase devoted exclusively to police and fire pensions and a first-ever garbage collection fee of $9.50-a-month-per household… Senior citizens would get a 50 percent discount.
The mayor’s budget also includes: $13 million in higher fees for building permits; a new, $1 million tax on e-cigarettes: a 50-cents–a-ride surcharge on taxicabs; a 30 cents-a-ride increase in the surcharge on ride hailing services and authorization for Uber, Lyft and Sidecar to make pickups at McCormick Place, O’Hare and Midway Airports in exchange for a $5 surcharge on every pickup and drop-off.
The cab and ride-hailing fees would raise $48 million. Struggling cabdrivers would get a 15-percent fare increase as compensation for losing what is now their last bastion of exclusivity. […]
Emanuel told the council he wanted to do what he could to help Chicagoans “who could least afford the additional burden” of higher taxes. “The lion’s share” would be borne by “our thriving central business district” as well as those whose homes are valued at more than $250,000. He backs a plan to increase the homeowner exemption to help those whose homes fall below that threshold won’t take a hit. […]
Emanuel said the dire alternative to a property tax increase is 2,500 police layoffs, 2,000 fewer firefighters, 48 fire station closings and twice-a-month garbage collection, instead of weekly pick-ups.
* Tribune…
Even if he gets aldermanic support for his menu of tax hikes, Emanuel’s $7.8 billion budget proposal requires some help from Springfield and Republican Gov. Bruce Rauner.
Emanuel is counting on Rauner backing a bill giving the city more breathing room in paying required annual increases in police and fire pensions. Without that help, the city could find itself $219 million in the hole next year.
Emanuel also wants Rauner to approve an increase in homeowner property assessment exemptions to dampen the blow of the property tax increases. Rauner, however, wants to freeze property taxes, not raise them.
The mayor said he spoke with House Speaker Michael Madigan and Senate President John Cullerton, the two Chicago Democrats who control the General Assembly, about the increased exemptions and said they both agreed to move the bill, starting with a House hearing Thursday.
Should be an interesting hearing. But…
Gov. Bruce Rauner has virtually promised to veto Emanuel’s homestead exemption proposal if it reaches his desk. How that issue plays out will be a key factor in determining the ultimate fate of the new budget.
From Innovation Illinois…
Governor Rauner is overstepping his authority and creating obstacles to the democratic process by threatening to veto the Mayor’s request for a change in the property tax exemption. Instead of supporting property tax relief for Chicago homeowners, the Governor is interfering in the City’s operations by insisting that Mayor Emanuel follow his lead by engaging in union busting as a quid pro quo for the Governor’s signature.
The State of Illinois cannot afford yet another government budget held hostage to Governor Rauner’s continuing attacks on working families in Illinois. The people of the City of Chicago deserve to have their elected officials make decisions on their behalf without interference by a Governor who puts his own extreme views on organized labor ahead of the public good.
Innovation Illinois urges Governor Rauner to withdraw his veto threat and allow passage of any reasonable changes in Illinois law that Mayor Emanuel and the City Council consider necessary to putting the City’s finances back on track.
* The Chicagoland Chamber wasn’t overtly hostile, but try reading between the lines…
Today, Mayor Emanuel presented the City’s Fiscal Year 2016 budget, which proposes to increase property taxes by as much as $600 million to pay for police and fire pensions, and $125 million in other revenue enhancements to pay for operating expenses. The property tax hike would take effect over four years, frontloaded in 2015 and 2016. The proposed budget includes $176 million in cuts and efficiencies.
No one likes higher taxes, least of all the business community that pays a disproportionate share of the property tax. The Chicagoland Chamber of Commerce will continue to monitor the City budget hearings and all proposals for additional fees or taxes, but no matter how large or small the property tax increase, the Chamber opposes all efforts to increase the homeowner’s exemption for residential properties.
An increase in the residential homeowner’s exemption would shift even more of the property tax burden on to businesses, as Cook County’s archaic and unfair classification system already requires commercial and industrial properties to pay 2.5 times more than residential properties.
The Chamber will remind the Aldermen that Chicago recently increased its minimum wage, implemented a plastic bag ban, increased the 911 surcharge, and is considering implementing a paid sick leave mandate. The Cook County sales tax increase and the looming state revenue shortfall should also be considered. Additional tax and regulatory burdens on the business community are simply not sustainable.
The Chamber applauds Mayor Rahm Emanuel’s leadership in presenting a budget that is honest about the true cost of government and takes another step in tackling our City’s legacy fiscal obligations. Chamber members want certainty so they can plan for the future, and this budget is a long-term step toward righting the City’s fiscal ship which has been off-course for a generation.
It took us a generation to reach this point, and the Chamber is committed to working with Mayor Emanuel and City Council on crafting an honest and responsible budget.
Also…
Ald. Brendan Reilly, whose 42nd Ward covers most of the central business district and some of the city’s wealthiest neighborhoods, made it clear he’s already hearing from constituents who feel that the property-tax exemption Emanuel wants to give residents whose homes are worth up to $250,000 will shift an unfair share of the burden to them.
posted by Rich Miller
Tuesday, Sep 22, 15 @ 1:49 pm
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What, no sugar tax?
Comment by Count Chocula Tuesday, Sep 22, 15 @ 1:53 pm
The Mayor just passed an additional increase of 25% - 38% onto the current retirees. The full phase out of retiree healthcare will conclude January 1, 2017. This is what a Democrat is doing to their municipal retirees. The State retirees have it made compared to the Chicago Retirees.
Comment by Chicago (d) Tuesday, Sep 22, 15 @ 1:56 pm
“Hi Mayor Emanuel-
The Governor’s answer is ‘No’.
Thanks!
ck”
Comment by Oswego Willy Tuesday, Sep 22, 15 @ 1:57 pm
Hi Mayor,
“Never let a crisis go to waste” Cut police and fire and privatize streets and san.
And tell me, how is your proposed budget any different than Chuy’s would have been?
Comment by old pol Tuesday, Sep 22, 15 @ 2:04 pm
Does Rauner support local control over anything other than to limit collective bargaining?
Comment by AC Tuesday, Sep 22, 15 @ 2:06 pm
“The property tax hike would take effect over four years, frontloaded in 2015 and 2016. The proposed budget includes $176 million in cuts and efficiencies.”
The state of finances in Chicago are such that there should be no phased implementation. The city has been under funding the pension systems for many years. The pension plans need the full amount of the tax increase as possible to play ‘catch-up’ for past years.
Comment by Hit or Miss Tuesday, Sep 22, 15 @ 2:06 pm
“Unfortunately, the governor cannot support the ‘Make Sept. 22 Illinois Puppies and Kittens Day’ resolution unless it also includes controls on collective bargaining and prevailing wage.”
Comment by Tournaround Agenda Tuesday, Sep 22, 15 @ 2:09 pm
I can see the rationale for the homestead exemption in a state where flat income taxes leave few options for progressivity, but ultimately, it’s not really fair and equitable unless it can be crafted in such a way as to exempt all dwelling units, rented or owned, under a certain level. It’s probably better not to dink around with varying classifications within the property tax at all, but rather just increase it as it is, and for the state to raise the income tax rate and increase the personal exemption. Perhaps Rahmie could do a deal with the governor that combines all these elements?
Comment by Angry Chicagoan Tuesday, Sep 22, 15 @ 2:10 pm
Classic Chicago Stockholm Syndrome. Hardly a complaint. Emmanuel wants to tax his way to prosperity in Chicago. And he spins it as “progress.” Wow.
Comment by Louis G. Atsaves Tuesday, Sep 22, 15 @ 2:13 pm
Tough medicine doesn’t leave a good taste, sometimes. Too bad Rham let the patient remain sick for so long.
And why the heck should Rauner bail out the city of Chicago? Democrats created this mess. Let them fix it.
Comment by Apocalypse Now Tuesday, Sep 22, 15 @ 2:13 pm
===Democrats created this mess. Let them fix it.===
Wow. The most ignorant comment today belongs to…
You do realize we are all in this together, and by working together on where we can find common ground is good governing… Right?
Now, - AN -, if you are looking for a hurricane to fix Chicago, pick up a Tribune…
Comment by Oswego Willy Tuesday, Sep 22, 15 @ 2:17 pm
Congrats dems, this is what you get from your leadership the past gazillion years!
Comment by anon Tuesday, Sep 22, 15 @ 2:19 pm
I also believe he needs Springfield to pass legislation to tax the ecigs as he wants.
Comment by Wow Tuesday, Sep 22, 15 @ 2:19 pm
===Emmanuel wants to tax his way to prosperity in Chicago.===
“Rauner needs a tax for his way to prosperity in his proposed unbalanced budget”.
Better.
Comment by Oswego Willy Tuesday, Sep 22, 15 @ 2:19 pm
Well said Willy.
Comment by Norseman Tuesday, Sep 22, 15 @ 2:25 pm
Updating an old adage: ‘Soon’ isn’t a time, ’some’ isn’t an amount, and a plan that ‘needs Springfield’s help’ isn’t a plan.
– MrJM
Comment by @MisterJayEm Tuesday, Sep 22, 15 @ 2:27 pm
Rauner will be under a lot of pressure to push a property tax freeze before Chicago passes this property tax hike.
Comment by Count Chocula Tuesday, Sep 22, 15 @ 2:35 pm
The City of Chicago is in worse financial condition than the State. It has more debt per capita and is 25 percent below its peak population (3.6 million in 1950 ). It has some great institutions, many talented people, and a diverse economy. It also has many people in the workforce with low skills.(Chicago had about 10,000 high school dropouts each year for 20 years. )
Is Rauner thinking he can turn Chicago Democrats Because they need him? Is this his leverage?
Comment by Last Bull Moose Tuesday, Sep 22, 15 @ 2:41 pm
I did a quick check on the number of police in Chicago on a per capita basis. Governing magazine has a report using 2012 info. Chicago was #3 in the country for officers on the street with 44.1 officers per 10,000 residents. Only D.C. and Baltimore had more officers. If you throw in admin staff, Chicago is #11 with 47.1 police employees per 10,000 residents.
I don’t want to see massive layoffs of police, the City needs to move away from equating the number of police with public safety.
Comment by Chicago Guy Tuesday, Sep 22, 15 @ 2:42 pm
Don’t tax you, don’t tax me , tax the man behind the tree- as the saying goes. Good luck Chicago voters, you voted for that City Council and that Mayor. It’s time to show how much you love one party government. You like strong union contracts, pay up. You like great public schools, pay up. You like high taxes? You’ll have a fetish for them at even highe rates. Yes, your standard of living will probably be going down unless you get a nice pay raise but you’ll know you are supporting those icky Scott Walker types.
Comment by Steve Tuesday, Sep 22, 15 @ 2:50 pm
The one political factor, not that it really excuses Rahm, but in fairness that nobody ever seems to bring up: 2015 was the first election year under the new ward map.
Meaning, if Rahm had done his big push and hiked everyone’s taxes from 2011-2015, basically the first thing all these aldermens’ new constituents would have known about them would be, “Oh, you’re the jerk who hiked my property taxes.”
Whatever resistance Rahm is facing now from the City Council, would I think have been titanic pre 2015. At least now the aldermen have a full cycle of community service to their new constituents to try and staunch the political bleeding.
And again I’m not really defending or sanctioning this reality, but it’s politics, the art of the possible and Rahm is now doing a darn sight more to try and budget responsibly than Daley (or the old Teachers Union pre-Karen Lewis for that matter) ever did.
Comment by ZC Tuesday, Sep 22, 15 @ 2:57 pm
==Democrats created this mess. Let them fix it.==
This is one of the goofiest comments that gets put out there far too frequently. Why the heck don’t you grow up already.
Comment by Demoralized Tuesday, Sep 22, 15 @ 3:00 pm
You don’t have to like the solution, but at least the mayor has one. That can’t be said for the Governor or the General Assembly.
Comment by Demoralized Tuesday, Sep 22, 15 @ 3:02 pm
Agreed, Demoralized. Unfortunately the mayor needs the Governor and the General Assembly for part of his solution.
Comment by Robert the Bruce Tuesday, Sep 22, 15 @ 3:09 pm
Chicago - please remember this does not solve the problem.
This again is merely a pay what you might and hope the future issues (which are already out there) do not explode.
Unfortunately for Rahmo is he can not borrow due to the junk bond status and no one will give him any credit. He can not sell anything - no one will deal with him (plus the Daley’s beat him to punch) and the spending continues to massive.
Comment by Cannon649 Tuesday, Sep 22, 15 @ 3:11 pm
Emmanuel will have to solve Chicago’s financial problems without the help of Governor Rauner. An alternate property tax plan would give low and middle-income homeowners a rebate against the higher property taxes. This would not need Springfield’s approval.
Comment by Enviro Tuesday, Sep 22, 15 @ 3:13 pm
Here, here demoralized.
Excluding the magic bean crowd, I have absolutely no idea what the other options are.
Of course, to quote the band Freakwater (who never get quoted enough): “Don’t the truth look bad up next to a pretty lie.”
Comment by Sam Weinberg Tuesday, Sep 22, 15 @ 3:17 pm
Well said, - Demoralized -, well done.
Comment by Oswego Willy Tuesday, Sep 22, 15 @ 3:18 pm
Those of us in Chicago have been expecting a property tax increase for awhile. Never mind the garbage pick up — I would just like to see some street lane markings repainted. It’s getting harder and harder to see where the left turn lane is.
Comment by Emily Booth Tuesday, Sep 22, 15 @ 3:28 pm
Oh, and if they’re going to raise property taxes, get rid of some of the cameras. Cicero between Foster and Lawrence is a speed trap.
Comment by Emily Booth Tuesday, Sep 22, 15 @ 3:29 pm
“==Democrats created this mess. Let them fix it.==
This is one of the goofiest comments that gets put out there far too frequently. ….”
I think it has been pointed out on this blog in the past that most of the “mess” was caused by former Mayor Daley(D) skipping required pension payments for several years. I don’t know if he had any help.
Comment by CapnCrunch Tuesday, Sep 22, 15 @ 3:30 pm
“Rauner will be under a lot of pressure to push a property tax freeze before Chicago passes this property tax hike.”
———–
Have my doubts that Rauner will do anything regarding Chicago property taxes, one way or the other.
And that likely means no money from the State of Illinois to the City of Chicago or the Chicago Public Schools.
Rauner isn’t likely to get a property tax freeze for Chicago (certainly), with the rest of the state being treated as a Democratic bargaining chip.
But, then there’s no reason for Rauner to buy into any state funds for Chicago or CPS. Or expanding the Homeowner’s exemption for Chicago/Cook County.
Logic is really simple: Why jump into the middle of a fight that isn’t your fight?
Not Rauner’s to fight.
Besides, a $588 million property tax increase over 4 years is likely to be only a portion of what is really going to be needed.
And as a point, $9.50 per month per household for garbage pickup is really inexpensive. Did some quick checks and out of six communities I surveyed (3 suburbs, 3 northern/central municipalities), the minimum price was $13.00 per month per household, with the high being over $19 per month per household. And no discounts.
Sorry, but Rahm isn’t serious, IMO. If that’s all he can get through, expect more taxes and fees to come down the road in future budgets.
Comment by Judgment Day Tuesday, Sep 22, 15 @ 3:33 pm
All politics is local. Someday Governor Rauner may understand this & look beyond ideology.
Comment by Emily Booth Tuesday, Sep 22, 15 @ 3:54 pm
Emanuel inherited a mess, every asset sold or long term leased with bad terms to get operating capital. All of which was done to kick the can down the road so Daley could continue to pretend everything was fine. Emanuel will pay the price.
Comment by burbanite Tuesday, Sep 22, 15 @ 3:58 pm
> Emanuel inherited a mess
As if Emanuel never supported Daley.
Comment by C'mon Get Real Folks Tuesday, Sep 22, 15 @ 4:06 pm
Sorry Windy City, but your only real fix is a cold turkey solution similar to Motown. Lots of pain and suffering, but this pension fix will be obsolete when the SSA readjusts life expectancies in five years.
Comment by Blue dog dem Tuesday, Sep 22, 15 @ 4:12 pm
It is worth noting that some of the mess was the result of the worst recession in U.S. history. Daley did sell off and lease assets, but he didn’t have a lot of options at the time. Once the recession hit he couldn’t raise property taxes without really hurting a lot of people.
Comment by Chicago Guy Tuesday, Sep 22, 15 @ 4:18 pm
==
but this pension fix will be obsolete when the SSA readjusts life expectancies in five years. ==
no it won’t be obsolete, lack of revenue is the main problem (not the only but everything else is minor in comparison). Police and Fire will be on a good track if they get the $
Comment by Name/Nickname/Anon Tuesday, Sep 22, 15 @ 4:53 pm
==Police and Fire will be on a good track if they get the $==
Everything would be on a good track if they could just get the $.
Comment by nixit71 Tuesday, Sep 22, 15 @ 5:16 pm
Not that any of this is really Emmanuel’s fault, but he just made sure he’s unelectable next time.
Comment by Cheryl44 Tuesday, Sep 22, 15 @ 5:33 pm
===Besides, a $588 million property tax increase over 4 years is likely to be only a portion of what is really going to be needed.===
I fully agree. The Chicago Public Schools, which Emmanuel controls, has said that it needs $200 million to fill a budget hole for next year. One needs to ask if the property tax payer will also need to pay more to support the schools. With the State of Illinois having its own major pension issues, I think that support of this magnitude for CPS cannot and should not come from Springfield.
Comment by Hit or Miss Tuesday, Sep 22, 15 @ 6:22 pm
Mayor Emanuel and the Chicago city government could also enact a modest financial transaction tax, which would take a significant bite out of a property tax increase, but NOOOOOOO. They have to avoid taxing the financial people, who threaten to leave if taxed.
They want to raise taxes on many people whose incomes have stagnated or declined, while those who invest in stocks have seen the stock market surge over the last few years.
I was just watching “Chicago Tonight,” and an alderman from the “Progressive Caucus” said Mayor Emanuel is not listening to other ideas that tax wealthier people and corporations.
Thankfully there is a proposed exemption for properties valued under $250,000.
HOWEVER, it’s time for some protest, y’all. Grab your pails and get your hands ready to pound out some beats. Ready?
On four: 1,2,3,4:
What do we want?!
Tax the rich!
When do we want it?
Now!
Show us what democracy looks like!
This is what democracy looks like!
We have to somehow fix the debt and get out of junk bond or near junk bond status. I hope that we can accomplish that.
Comment by Grandson of Man Tuesday, Sep 22, 15 @ 7:15 pm
@Grandson - Yes, Chicago could enact a financial transaction tax. But on whom? Not the exchange (CME), since their co-location data center is in Aurora where they can route most of their trades. They can move the 350 E Cermak data center elsewhere, or simply use for DR purposes with minimal trade activity.
So if the trades are routed outside Chicago proper, who do you charge the FTT? The traders, right? Well, what if the traders don’t execute trades in Chicago?
What if their firms are incorporated in the suburbs? Now who’s paying?
The truth is, a FTT is not feasible at the local level. Exchanges are electronic and much easier to move. Hardware is refreshed so often that it’s not as huge a capital outlay to build new, considering the cost savings to offset the tax impact. And no one ever said another exchange (ICE) can’t offer similar products to trade.
You might be able to enact FTT at the federal level. But that won’t help Chicago.
Comment by nixit71 Tuesday, Sep 22, 15 @ 9:43 pm
Rahm Emanuel was roundly criticized for closing fifty public schools and it was a big issue during the last mayoral election. He also faulted Garcia for casting a vote in favor of a large property tax increase almost two decades ago.
Now, Emanuel claims that the most massive property tax increase in Chicago history is needed to build more public schools. The mayor complained that too many schools are currently overcrowded. This begs the question as to whether or not too many schools were closed in the first place.
How about reopening some of the schools that were closed and bussing students to the schools if necessary? It will never happen because Rahm wants to spend money and award contracts to the politically connected construction companies. The City Colleges of Chicago continues to build new college buildings even though enrollment is down.
Comment by Under Further Review Tuesday, Sep 22, 15 @ 9:57 pm
I think Upon Further Review just suggested busing students from the far Northwest Side and Lincoln Park to the West Side, to go to public school there.
I … well part of me thinks that’s an amazing idea, but it’s just not going to happen.
Look, Rahm beat Chuy because in the end a small majority of Chicagoans thought he was the one who at the end of the day was going to propose actual political solutions that passed muster and could get enacted, not just sound good in abstract. This thread hasn’t persuaded me any differently.
Comment by ZC Tuesday, Sep 22, 15 @ 10:02 pm
Seriously? Chicago residents have not had to pay for garbage collection?
Comment by Little Egypt Tuesday, Sep 22, 15 @ 10:07 pm
@ZC: Not all of the closed schools are located on the West Side (Stewart and Trumbull are on the North Side in relatively stable neighborhoods).
@ Little Egypt: Chicagoans have paid for garbage collection. The trick that Emanuel is playing is that the current city portion of the Cook County property tax bill does not itemize the portion of the city taxes used for Streets and Sanitation purposes. It is a complete falsehood to claim that Chicagoans were not taxed for these services.
Worse still, Emanuel wants to put the garbage fees on water bills (not tax deductible as are real estate taxes)
Comment by Under Further Review Tuesday, Sep 22, 15 @ 11:15 pm
Under Further Review, IMHO garbage collection should not be part of the real estate taxes and therefore tax deductible. If that’s the case, then I would like to have my hair stylist’s fees and lawn mowing fees placed onto my real estate taxes.
Comment by Little Egypt Tuesday, Sep 22, 15 @ 11:26 pm
Where is the public outcry from City Union members…non police and fire? Why are we bailing the police and fire and doing nothing for the other pension systems? What is the average pension for a retired fireman or police officer? How early can they retire? Any studies done on how long they stay in Chicago once they retire? What are the current benefits police and fire enjoy? How much money has the city had to pay over lawsuits involving police over the last 10 years? These are some of the questions the public deserves to know but for some reason the media refuses to cover. A lot of folks will move out of Chicago with this looming tax increase.
Comment by anon Wednesday, Sep 23, 15 @ 7:16 am
Some public employees are more important, apparently than others. There is no doubt that police and fire employees are critical to public safety. But that doesn’t mean that everyone else’s services are just a joke we can all do without. Kinda like the View and the comments made about nurses. Advertisers went crazy, dropping their spots in protest about a negative comment about nurses. Can you even imagine if there were penalties when a slander or insult was voiced about teachers? There’s my point. Some professions were just meant to be abused, apparently.
Comment by Anonymous Wednesday, Sep 23, 15 @ 7:30 am
If Emanuel could trim the top end of promised pension benefits to the richest retirees, to avoid property taxes - and to save some CPS teaching jobs - he would.
But he can’t. It’s the Tier One retirees’ world now, including the retired CPS teachers who got out under the wire. The rest of us apparently have to get used to waiting in line behind them and taking (or paying) whatever’s left.
Comment by ZC Wednesday, Sep 23, 15 @ 8:25 am
Graduated Chicago income tax now, please!
Comment by Homer J Wednesday, Sep 23, 15 @ 8:50 am