City Council Approves Mayor’s 2015 Budget


A Chicago property tax hike is avoided this year, but get ready for a host of other fines and fees to go up. The City Council today overwhelmingly approved Mayor Rahm Emanuel's 2015 budget.

As the mayoral election looms, Emanuel pointed to years of shrinking budget gaps. But is the relatively rosy picture hiding a darker budget reality?

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City Council lauded the mayor for stabilizing the city’s finances, at least for another year. But looming ahead is a $550 million pension payment to police and fire pension systems.

 

2015 Budget Appropriations

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Nonetheless, 46 aldermen voted to approve this $8.9 billion budget plan that increases spending about $300 million from the year before. It includes new money for early childhood education and youth job programs and expanded pothole filling and tree trimming services, yet closes a nearly $300 million budget gap through a mix of efficiencies and new taxes, including:

  • 2 percent hike in the tax to park in city garages
  • 1 percent hike on lease and rental taxes – which include car sharing services
  • $1.40 hike in the phone tax which will help offset a $50 million increase in pension costs to stabilize two of the city’s four pension systems
  • Hike on the cable amusement tax that, if passed to customers, would cost about $2.80 per month

Mayor Emanuel who faces re-election in February says one thing has not gone up under his tenure: the city’s share of the property tax.

“We have four budgets in a row that have been balanced without property sales or gas taxes,” Emanuel said repeatedly. “Four years in a row, we’ve increased our investments; most importantly in the future of the city of Chicago.”

Budget - 2015 Budget Ordinance - Appropriations - Graph

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The few opponents there were to the budget expressed frustration that it doesn’t increase police hiring. Instead, it relies more on police overtime as it has in recent years. Some aldermen also decried a small hike in health premiums city retirees will face starting next year. And one alderman said that money should have been found in the city’s Tax Increment Financing pot, instead of resorting to tax and fee hikes.

“TIF reform is still not part of the picture,” said Ald. John Arena (45th). “Instead, we reach into the pockets of taxpayers even deeper with fees, fines and taxes.”

The elephant in the room is a $550 million payment due to police and fire pension systems. It’s money that’s supposedly due those systems this year, but through an accounting maneuver, will be paid in 2016 giving the city a year to come up with a solution.

The mayor admits that the court case on state pension reform has gummed up talks with the interested stakeholders to perhaps reform the system and lower that payment.

Budget watchdog Laurence Msall says the budget will work for the coming year, but a resolution to funding those pension systems is necessary.

“It’ll have to come in partnership with the Illinois legislature and the governor, because this city can’t afford that level of tax increase,” Msall said.

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