Sept. 04--Rahm Emanuel has everyone's attention with a plan to raise property taxes by $450 million to $550 million for police and fire pensions. Plus $50 million in property taxes for Chicago Public Schools. Plus a new tax on garbage collection. A per-ride fee on taxis and ride services such as Uber. A new tax on electronic cigarettes and smokeless tobacco products.
We don't know how much of that is threats of taxation that the mayor can roll back. This is his opening gambit, leaked to the press for frightful effect.
We do, though, know how the mayor and the aldermen can soften these blows, which would coincide with a Cook County hike of 1 percent in the sales tax and a possible state tax hike on the horizon. They have to downsize the cost structure of city government. Force expenses to match resources. Curtail ... the ... borrowing.
Emanuel is weeks away from proposing his budget for 2016. Maybe he'll demonstrate that at this miserable juncture, with Chicago's finances desperate and its bond rating trashed, his primary response is to ask for tax hikes.
Or maybe he'll abide by his campaign pledge that reform and revenue have to be comrades on the journey. That is, maybe he'll reconcile City Hall spending to the limited amount of money coming in. This has to be a big restructuring.
When he ran for mayor in 2011, Emanuel was brimful of bold ideas:
--He talked with our editorial board about cross-training public safety workers to save millions. As better construction and sprinkler systems reduce the number of fires, he said, Chicago should align fire, police and emergency medical resources to meet the actual workloads.
--He talked about outsourcing to private contractors a good chunk of the work that direct-services departments such as Streets and Sanitation perform.
--He didn't quarrel with our mention that private-sector firms increasingly delegate back-office functions -- payroll, benefits, accounting, cash management -- to firms specializing in those services.
Through decades of denial, starting before Emanuel was born, City Hall viewed such reforms as financially unnecessary and politically toxic.
Emanuel can point to significant economies in his first term, including a smaller workforce, health care and work comp cost savings, the once-unthinkable shift to a grid system for garbage collection.
Chicago, though, can make more dramatic changes to its cost structure -- the changes candidate Emanuel set out in 2011.
Mayor Richard M. Daley had ramped up City Hall's reliance on gazillions in debt -- spending tomorrow's revenues today, and relying on gimmicks to avoid tax hikes. Daley didn't leave Emanuel much to work with; Daley painted Chicago in red ink. Emanuel in his first term adopted the Daley lesson about "scoop and toss," a slow-motion suicide in which City Hall pushes yesterday's debt far into the future ... at higher cost. Emanuel vows now to eliminate scoop and toss by the end of his second term.
The most lethal legacy expense: employee pension costs. If you haven't fully appreciated the impact of that Illinois Supreme Court decision saying pensions can't be modified between a worker's first day on the job and the day he or she dies, then look around: Yes, Emanuel has a faint prayer of persuading the justices that reforms he got Springfield to authorize are constitutional. But he's now contemplating a tax hike of some $500 million for just two city pension funds.
The politics of reform are treacherous; look at the pounding Gov. Bruce Rauner absorbs for trying to make state government live within its means. Agree or disagree with Rauner, you can see that he's trying to effect real change in how Springfield spends taxpayer dollars.
Political resistance is more fierce, more concentrated, in Chicago. Emanuel needs partners. Yet most of the aldermen essentially have been useless. Their ideas for right-sizing this government rarely go much beyond impossible revenue schemes (Aha! A financial transaction tax!).
Emanuel ought to accompany this proposed budget with a stark message to the risk-averse aldermen. The first to hear it ought to be Ald. Edward Burke, 14th, who as head of the Committee on Finance has presided for all but two of the last 32 years over this implosion. Burke should pour his love for this city's past into rescuing its future.
What can the mayor tell the aldermen?
No more debt for our children. No more whining at Springfield. This is on us. We have more city government than we can afford, and we have to cut it down to size right now. Because if we don't, our people really will have to pay another $500 million in property taxes. Plus another $50 million in property taxes for Chicago Public Schools construction. Plus a new tax on ...
