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Rahm, Aldermen Scramble to Provide Revenue, Remedies Ahead of Budget Speech

By Ted Cox | September 21, 2015 4:22pm
 Mayor Rahm Emanuel is expected to seek a $600 million increase in property taxes.
Mayor Rahm Emanuel is expected to seek a $600 million increase in property taxes.
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DNAinfo/Ted Cox

CITY HALL — Budget proposals and counterproposals flew back and forth Monday ahead of a mayoral budget address expected to include a $600 million increase in property taxes.

Mayor Rahm Emanuel issued a statement at midday saying he intended to completely eradicate the structural budget deficit and end "scoop and toss" refinancing "gimmicks" by 2019, as well as cutting $170 million from the budget through savings, efficiencies and reforms.

Yet, with the mayor's 2016 budget address set for Tuesday, the measures required to achieve those goals were undeniably harsh. With the city heading for what Emanuel has long warned was a "$600 million pension cliff" with required payments due for police and firefighter pensions, that was just about the figure cited by sources as the necessary hike in property taxes, especially after the mayor piled on a $45 million Chicago Public Schools tax levy for capital projects.

"I'm not selling the mayor's tax increase to anybody," says Ald. Scott Waguespack of the Progressive Reform Caucus. "That's on him."
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DNAinfo/Ted Cox

According to the Mayor's Press Office, a $544 million increase would be phased in over four years, starting with $318 million this year. Combined with the additional CPS levy, it would approach a $600 million increase.

Staggered aldermen sought ways to ease the burden on homeowners. Aldermen Joe Moreno (1st) and Carlos Ramirez-Rosa (35th) submitted competing proposals to provide rebates to low-income homeowners. Ramirez-Rosa's plan, submitted along with the 11-member Progressive Reform Caucus, would provide $400 to eligible homeowners, intended to almost cover an estimated $475 increase on a $250,000 home with a $500 million overall hike in property taxes.

It would kick in for families that make under four times the poverty level, estimated at $47,000 for an individual, $64,000 for a couple and $97,000 for a family of four. Moreno's plan would also be tied to household income, but would provide slightly smaller rebates.

"This is what the people of the City of Chicago deserve," Ramirez-Rosa said. "They deserve to be protected."

Yet others worried how they'd sell the property tax to more well-to-do residents who might wind up bearing the brunt of the hike, including homeowners on the lakefront and the Northwest Side.

"I'm not selling the mayor's tax increase to anybody," said Ald. Scott Waguespack (32nd). "That's on him."

Emanuel countered with an idea to expand the homeowners' exemption, but others have dismissed that, pointing out it requires General Assembly approval, and state legislators are locked in their own budget impasse with Gov. Bruce Rauner.

Waguespack and the Progressive Caucus proposed redistributing Tax Increment Finance funds, reviving an amnesty program for delinquent tickets, curbing reforms for ride-sharing services and setting what they called an "alternative minimum tax" for Downtown properties that frequently have their assessments reduced through appeals. They called on the mayor to beef up the Law Department to fight those appeals.

"We must ask the very wealthy and big corporations to pay their fair share in taxes so we can finally fix our structural deficit and get on track to fiscal sanity," said Ald. Leslie Hairston (5th).

Yet Ald. Edward Burke (14th), chairman of the Finance Committee, proposed getting the money from sources outside the city. On Monday, he proposed creating a congestion fee for cars entering Downtown. The concept has been called "congestion pricing" in New York City.

Burke said the details, such as where the pinch points would be for collection, are yet to be ironed out, calling it "all to be determined" and adding, "This is very preliminary." Yet he estimated it could raise $195 million a year. He said cars and trucks with city stickers would be exempt, as "most people who live here don't drive down here," to the city center. Yet it would affect delivery trucks and suburban commuters.

Emanuel has previously suggested a host of new fees and taxes, including what now appears to be a $9.50-a-month charge for garbage collection after aldermen sought last week to hold it under $11.

He also appeared ready to impose additional $1 charges on taxis and ride-sharing services to the tune of an extra $48 million, insisting 80 percent of that would be paid by ride-sharing firms like Uber and Lyft. Yet progressives like Ald. Roderick Sawyer (6th) said it wasn't worth the cost of allowing those drivers access to city airports and McCormick Place.

Emanuel is also expected to increase taxes on e-cigarettes, but that would produce a relatively meager $1 million, with that designate to support community health services as well.

"We're waiting to hear what the mayor says [Tuesday]," said Ramirez-Rosa.

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