Sept. 22--Mayor Rahm Emanuel unveiled his 2016 city budget Tuesday, pitching the idea that $543 million in new property taxes and several other tax and fee hikes would "finish the job" of securing Chicago's financial future.
In a speech front-loaded with laudatory statements about his first term, Emanuel warned that city government's "fiscal challenges are blocking our ability to expand opportunities to more of our residents."
"Now is the time. This is the council. Let us commit to finishing the job," Emanuel told the City Council.
"We in this room today did not create our current challenges, but we can and must be the ones to fix them," Emanuel said in a pointed nonreference to his predecessor, Richard M. Daley, that also ignored the long tenures of several aldermen. "The seeds of our financial crisis were planted many decades ago and were not addressed for far too long."
Emanuel's budget includes a record city property tax increase, with $318 million of the $543 million scheduled this year. Money from the property tax increase would be earmarked for the vastly underfunded police and fire pension funds, where a 2010 state law requires the city to contribute hundreds of millions of dollars more in the coming years.
"Our greatest financial challenge today is the exploding cost of our unpaid pensions," Emanuel said. "It is a big dark cloud that hangs over the rest of our city's finances."
The mayor said the city can't cut its way to find the money for increasing pension payments. To do so, he said, would mean cuts of 2,500 police officers, or about 20 percent of the force. He also said 48 fire stations -- about half the city's total -- would have to be shut down while laying off 2,000 firefighters, or 40 percent of the department.
Other services, including street repair and rodent abatement, also would go by the wayside, he said.
"In short, if we were to fund our pensions with cuts alone, our city services would become unreliable. Our city would become unlivable. And that would be totally unacceptable," Emanuel said, delivering his sales pitch for a property tax hike to politically wary aldermen.
Citing examples of heroism by Chicago police officers and firefighters, Emanuel said they "have met their obligation to us; now we as a city must meet our obligation to them."
Besides the city government property tax increase, Emanuel's budget also includes a new property tax increase for Chicago Public Schools construction totaling $45 million.
Additionally, Emanuel proposed a new $9.50-a-month garbage-hauling fee to raise $62.7 million, a combination of ride-sharing and taxi fee hikes to generate $48.6 million, building permit fee increases to bring in $13 million and a new tax on electronic cigarettes to capture $1 million. That money would go toward reducing the city's year-to-year operating shortfall.
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.
To help try to make his case for higher taxes, Emanuel said the city would step up efforts to go after tax scofflaws, enhance a grid system to collect garbage and put street sweeping on a grid. He also said outsourcing 311 nonemergency services operations would save $1 million.
Emanuel called his overall budget plan "fair to all Chicagoans and key to Chicago's future."
"With this budget, we will vote to end the tricks, gimmicks and financial shell games once and for all," he vowed.
Acknowledging the political risk, Emanuel called on aldermen to step up.
"If we are willing to finally confront our fiscal challenges, I believe that we will be remembered as the men and women who pulled Chicago back from the financial brink and made Chicago stronger," the mayor said.
Emanuel then closed his speech by framing up the choices as he sees them.
"With this budget we can be remembered for stepping up to the challenge rather than stepping aside. With this budget we will be counted among the doers rather than among those who dithered," Emanuel said. "With this budget, when we look back at our public service, our individual names will be in the history book rather than in the guest book."
"We owe it to our city and to the generations who come after us to do what is right -- even when it is hard," he added. "I believe we will rise to the occasion. I am confident that we will go down in history as the elected leaders who stepped up when Chicago needed us the most.
"For the sake of our city's future, let us resolve to make that our collective legacy."
Chicago Tribune's John Byrne contributed.
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