Local aldermen discuss budget concerns


Northwest Side aldermen John Arena (45th), Anthony Napolitano (41st) and Margaret Laurino (39th) discussed Mayor Rahm Emanuel’s proposed budget that features a $544 million property tax increase over 4 years and other fees and said that it raises many questions that need to be answered before they vote on the spending plan.

"I don’t like the situation that we are in and while I can appreciate the intentions of the leadership during the budget process, I don’t see any of the proposals put on the table by the Progressive Caucus in there. I’m just not seeing any of them in this budget," Arena, a caucus member, said. "We have to hear from the administration because other options have not been explored."

The caucus has proposed that the city’s wealthiest residents and corporations should pay their fair share so that the burden of higher taxes does not disproportionately impact working families and middle class homeowners.

"Tax the rich," Arena said.

Some of the caucus’ main proposals include tax increment financing district reform, modernizing the sales tax and levying a luxury tax on non-essential purchases like fur coast, jewelry and boats above a certain price point.

Also, the caucus would like to see an alternative minimum property tax for the city’s central business district where the city can set a minimum valuation for large properties for tax purposes to prevent reduced property taxes on multimillion buildings, as well as regulating rideshare services such as Uber and Lyft and collecting unpaid fees and fines in a fair manner.

"Every year, the city loses million of dollars in property tax revenue because political insiders are able to cut deals for reduced property taxes on multimillion dollar skyscrapers in the Central Business District," Arena said. "Every dollar that the owner of a multi-million dollar skyscraper gets out of paying in taxes gets passed on to homeowners. That’s not fair, and it’s not a fiscally smart way to operate."

Some of the Northwest Side members of the Progressive Caucus are aldermen Chris Taliaferro (29th), Scott Waguespack (32nd), Carlos Ramirez-Rosa (35th), Nicholas Sposato (38th) and Arena.

Emanuel’s budget proposes a phased-in property tax increase of $318 million for 2015, $109 million for next year, $53 million in 2017 and $63 million in 2018, all to cover police and fire pensions payments.

Also, the budget includes a $9.50 monthly fee per household for garbage pickup, streamlining building permitting, a new rideshare and taxi fee to net $60 million and a tax on e-cigarettes to generate $1 million.

Emanuel also is seeking to expand the homeowners’ property tax exemption through state legislation, which means any resident whose home is valued at $250,000 or less would not pay any property tax increase for police and fire pension obligations.

The proposed budget also includes $170 million in savings and reforms including healthcare reforms and savings for active employees and retirees to save $40 million, eliminating 150 vacant positions to save $14 million, street sweeping on a grind system to save $3 million, closing central business district tax increment financing districts to get $113 million, enhancing garbage collection to save $9.5 million, reducing personnel to save $21 million and saving $16 million in energy costs.

"On so many fronts, Chicago has made great progress by challenging the status quo. But as we continue to grow our economy, create jobs and attract families and business to Chicago, our fiscal challenges are blocking our path to even greater success," Emanuel said. "With this budget, we will build on our progress in charting a new course for Chicago’s future and secure the retirements of our police and firefighters in a way that does not hurt those who can least afford it. I am confident we will be remembered as the leaders who made the hard choices and stepped up to save Chicago."

Laurino said that she expect the council to vote on the budget at the end of October.

"This entire week we spent in budget hearings and the aldermen are floating around a variety of ideas," Laurino said. "The property tax issue is important and we know that people are still suffering from 2008, but there’s been a series of discussion about a number of things."

Laurino said that she would like to see what the state government is planning on doing to help alleviate the city’s woes. "The bottom line is that you are either increasing fees or cutting services and it’s our job to find out if there are any more efficiencies before we increase fees."

"Being political animals as we are, we always look at what the consequences might be before taking a vote, but we need to do the right thing, and I’m not saying raising property taxes is the right thing," she said.

Arena also discussed the proposed exemption for homeowners.

"We know that there are plans to expand the exemption but we don’t have those numbers yet. Some of the leadership in Springfield is willing to do it, but will Rauner sign onto it if he is adamantly opposed to raising taxes? We just don’t know if we can count on Springfield and from the looks of it, we just might not be able to," Arena said. "Even if the exemption gets approved and the people get relief, how do you make that lost revenue up? It has to come from somewhere?"

Arena said that his office has been receiving phone calls to support low-income homeowners and others saying that the city should fix the budget through cuts alone.

"In the end this is the mayor’s budget, but everything is up for negotiation in order to win our support," Arena said. "The mayor is trying to get us to walk into the firing-line, but this is all on him.

"The political rhetoric is yes, if you vote for the property tax then you won’t or might not be elected again. But people don’t vote whether you voted ‘yes’ or ‘no.’ They vote for leaders. What we need is a progressive modern way of taxing and that’s where the fight will be," he said.

Arena said that closing down TIF districts downtown to free up 25 percent of the surplus for the city is a good start.

"We are closing some TIFs downtown and we are supportive of the 25 percent surplus. But that’s only the floor. We could go higher than that and use that money for the city and public schools. We need to use the TIF money and make it liquid to lessen the burden on the homeowners because we as a city are at a crossroad," he said.

Arena said that he thinks that the proposed garbage collection fee is moderate, but that it should be done on a "behavioral" basis.

"I would like it to be a fee that is based on behavior. For example, how many cans does a resident use? If they use one, then they should pay half. This should be a tax based on people’s behavior," he said. "Whether its water use, garbage use or plastic bags, we should charge people, but charge them based on the usage of something."

"I’ve always said that the city has no new revenue streams, but we can’t ask homeowners to foot the bill for everything," Arena said.

Napolitano said that people are furious and they are calling his office and saying that the city would fail them if the taxes go up.

"Here in the ward we have homes that cost more than $300,000, so even with the exemption that wouldn’t do anything. And some people will say if you can afford a home like that then you can pay higher taxes. But people here they may be home rich, but they are pocket poor," Napolitano said.

Napolitano said that he is leaning toward voting against the budget.

"This is a budget that just doesn’t work for the 41st Ward. It’s not heading in the right direction for us," he said.

Napolitano said that some community members from a local school had tried to force him into voting for the budget in order to get an annex.

"They said you have to vote for this budget so we can get an annex," Napolitano said. "I’m like, ‘I can’t vote for this budget because there are other people at stake here.’"

"They told me ‘If you want an annex you should vote for the budget.’ But I had my staff check it out and nothing has been done about it. There’s no paper, nothing has been filed for with the city," Napolitano said.

Arena said that he met with a group of residents recently and told them that the city would have to pay for its mistakes "one way or another."

"We could have paid for this 20 to 30 years ago, but we just talked about this for 20 to 30 years. Just talked. So it’s not a surprise. So we have to be honest with ourselves about the situation we’re in. But I want to look deeper to see what else we can do," Arena said.

According to the mayor’s office, the city cannot meet its financial challenges through cuts alone. In fact, in order to make its required pension payments in the coming years, the city would need to decimate services. Such cuts could include reducing the size of the police department by 20 percent, laying off 40 percent of its fire fighters and eliminating critical services such as rodent baiting, pothole repair, and graffiti removal.