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Emanuel refuses CTU’s offer to help

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Illinois

Mayor Rahm Emanuel took a dim view Thursday of a package of tax increases the Chicago Teachers Union proposed to help cover a massive funding shortfall at the school district, instead calling on union leaders to join him in pressuring state lawmakers to change the way school districts are funded to bring more money to the city.

The mayor was responding to a revenue package union officials released Wednesday they said could shore up the district’s finances as a $675 million pension payment is due next month. Rather than raising taxes here, however, Emanuel said the onus should be on Springfield to change how school district pension costs are covered.

“Chicago taxpayers already pay twice for pensions,” Emanuel said when asked whether he backs any of the CTU ideas. “They pay for their own teachers’ pensions in Chicago when they pay property taxes. They also pay income taxes that supports every other teacher’s pension. The idea is not to ask people to pay taxes more, which would give our state, get them off the hook for actually fully funding education fairly so poor kids are not adversely affected by the state of Illinois that underfunds education as a total set of dollars.”

Emanuel has not been shy about raising taxes big and small during his five years in office, championing increases to parking and hotel taxes, 911 fees and water and sewer rates, in addition to the huge property tax hike and trash collection fee he pushed through as part of his 2016 budget.

CPS has a billion-dollar structural deficit. The state won’t ever cover that.

posted by Rich Miller
Friday, May 6, 16 @ 9:54 am

Comments

“Huge property tax increase.” Huge in what context? In relation to what they were previously paying? Is that the standard? Or maybe the Trib considers its increase, if any, “huge.”

Comment by Cassandra Friday, May 6, 16 @ 10:07 am
I think if Chicago paid the same rate we pay here in Dogpatch than it would be problem solved.

Comment by OneMan Friday, May 6, 16 @ 10:09 am
City and county taxes going up, up, up. State taxes as well in due time.
Chicago voters must be looking forward to November.

Comment by Anonymous Friday, May 6, 16 @ 10:13 am
The assessments in Chicago and Cook County are much lower then the rest of the state. Correct that first.

Comment by DuPage Friday, May 6, 16 @ 10:19 am
Tax increases upon tax increases developing for Chicagoans.

Comment by Anonymous Friday, May 6, 16 @ 10:24 am
=Huge in what context?=

How about in the context that the school system is abysmal. Many parents have to send their kids to parochial or private schools because the local schools are failing (and not necessarily because of lack of funds).

Comment by old pol Friday, May 6, 16 @ 10:29 am
But the offer was so, so genuine. Barf.

Comment by A guy Friday, May 6, 16 @ 10:34 am
So, Madigan can’t move the governor, but Rauner’s gonna give in to Karen and the union?
This is just Rahm’s way of saying “F*** you, Lewis”………again.

Comment by TinyDancer(FKA Sue) Friday, May 6, 16 @ 10:38 am
All this talk of tax increases, pretty soon Chicago homeowners will be paying the same as the rest of the State. /s

Comment by RNUG Friday, May 6, 16 @ 10:41 am
= But the offer was so, so genuine. Barf. =

Unfortunately, the problem is so large that any set of solutions, revenues and/or cuts, is going to be ugly. Some of what CTU put on the table might even make it into a final package. But there is no way that CTU can avoid sharing some of the pain.

Comment by cover Friday, May 6, 16 @ 10:44 am
At least CTU recognizes the political reality that CPS’s problems are not going to be solved by Springfield.

Comment by Tonti Friday, May 6, 16 @ 11:02 am
I swear that no one understands the Cook assessment process other than the Speaker.

All of the complaints about the ‘low assessments’ ignore the equalization factor. In DuPage it’s generally 1.06 +\- .02; in Cook it has been over 2.00 for 25 years, and closer to 3 since they rejiggered the assessment ratio 10-ish years ago.

Second, Chicago (including the related governments) don’t get X% of the assessed value, or equalized assessed value or anything like that. They set out the levy as a dollar amount, and except for the city, any increase in the levy is limited by PTELL, and that dollar amount is divided by the aggregate equalized assessed value to result in an effective rate.

Sure, the city can (and did) raise the levy by whatever amount, but CPS is tax capped and cannot raise its levy without a referendum or Springfield action.

Lastly, Chicago already has the Third highest effective property tax rate on commercial and industrial property–behind Detroit and NYC–and that effective rate is higher than the rate in (most of) the rest of Illinois.

The only taxpayers left to hit with higher property taxes in Chicago are the individuals, half of whom are renters, and half of whom are below state median income. I don’t think that the knock-on effects of (say) doubling the effective tax rate on residential real estate is really in the best interests of anyone.

Comment by Chris Friday, May 6, 16 @ 11:03 am
That’s fine to reject the CTU plan. But then the question is, what’s Rahm’s plan?

Comment by From the 'Dale to HP Friday, May 6, 16 @ 11:04 am
@Chris, I can’t begin to understand the Cook assessment process and I live here. I do know that your statement about commercial and industrial property is what almost everyone outside of Cook County doesn’t understand. It is draining businesses out of Cook to Collar counties and elsewhere.

Property taxes in Cook County/Chicago are high. Its just that commercial is carrying a larger burden than homeowners.

Comment by jeffinginchicago Friday, May 6, 16 @ 11:11 am
Chris-

I appreciate the lesson, I really do. But at the end of the day, I have friends in Chicago who own houses. I own a house of roughly equivalent size and amenities in a western suburb, where the schools are ok but not great. I pay way higher property taxes than my Chicago friends. For whatever reason. That’s the reality that affects my view of the situation.

Comment by Cassandra Friday, May 6, 16 @ 11:13 am
Cassandra, Chicago has the Loop and a bunch of industrial property. Most of the suburbs do not. So it’s going to be hard, if not impossible, to do an apples to apples comparison.

Chicago does have a lower rate, not doubt about it, but a major reason that Chicago residential tax bills are lower is because it has skyscrapers. (And for a good suburban example, look at Oak Brook, very low rates thanks in part to all the commercial buildings/head quarters).

Comment by From the 'Dale to HP Friday, May 6, 16 @ 11:41 am
=but a major reason that Chicago residential tax bills are lower is because it has skyscrapers=

But Chicago also has Eddie and Mike lowering those taxes on appeal.

Comment by TinyDancer(FKA Sue) Friday, May 6, 16 @ 12:01 pm
I never understood that “Chicago pays twice for pensions” thing. I am in Lake County. I pay for both k-8 and high school pensions in my property taxes. Not to mention library pensions, county pensions, and forest preserve pensions. And I pay income taxes too, that go to cover all other teacher pensions. So how is Chicago different exactly?

Comment by allknowingmasterofracoondom Friday, May 6, 16 @ 1:09 pm
== So how is Chicago different exactly? ==

In a nutshell, because of a deal where Chicago wanted and got complete control of the pensions, the State no longer pays for the CPS teacher’s pensions, it is all on CPS / Chicago. However, as part of the deal, the school funding was revised to give Chicago extra money in exchange for them.picking up the pensions.

People in Chicago remember the part about Chicago having to pay for the pensions but forget the part about getting extra State school funding.
So yes, technically they are taxed twice, State income and local property or the specifically authorized pension tax, but they get a lot of the State tax back in the form of the extra funding.

Comment by RNUG Friday, May 6, 16 @ 1:32 pm
RNUG- that’s not how the 1995 law worked. Chicago has always been responsible for its own pensions. Largely because it was created decades before TRS and is one of the oldest funds in the country. The main changes that the 1995 law made were to collapse CPS’s tax levies into one levy, thus eliminating the pension levy. And distributing m-cat dollars to them as a block grant instead of on a reimbursement basis so that they can spend the money on whatever they want.

The amount they got from the block grant was entirely based on how much of the total line item they received in 1995. The point of doing it was because the State didn’t want to give CPS more money, so instead they gave CPS and the mayor more flexibility.

And school districts in lake county are covering .56% of payroll for pensions for teachers (when the total employer cost is around 36%) and the IMRF contribution. Chicago has to cover the full cost. That’s the difference.

Comment by Juice Friday, May 6, 16 @ 2:41 pm
“because of a deal where Chicago wanted and got”

That should be “lil’ Richie Daley wanted and got the power to short fund the pensions, to avoid raising taxes, so he could keep getting re-elected”.

Yeahyeahyeah, Chicagoans got the government they deserve. Just like the rest of Illinois.

But Daley is not a synonym for Chicago, and saying it that way removes the culpability of the single person (by far) most responsible for Chicago’s and CPS’s current pension problem. I’m opposed to letting him of the historical hook that readily.

Comment by Chris Monday, May 9, 16 @ 1:29 pm