Area aldermen discuss mayor’s spending plan
by CYRYL JAKUBOWSKI
Northwest Side alderman said that questions about Mayor Rahm Emanuel’s proposed budget, which features a $544 million property tax increase over 4 years and other fees, must 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," said Aldermen John Arena (45th). "I’m just not seeing any of them in this budget. We have to hear from the administration because other options have not been explored."
The Progressive Caucus, a group of independent aldermen, has proposed that the city’s wealthiest residents and corporations should be taxed more so that the burden of higher taxes does not disproportionately affect middle class home owners.
The caucus’ main proposals include tax increment financing district reform, modernizing the sales tax and levying a luxury tax on non-essential purchases such as fur coats, jewelry and boats.
The aldermen also would like to see an alternative minimum property tax for the Central Business District where the city can set a minimum valuation for large properties to prevent reduced property taxes on expensive buildings, as well as regulating ride-sharing services such as Uber and Lyft and collecting unpaid fees and fines.
"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 home owners. That’s not fair, and it’s not a fiscally smart way to operate."
The other Northwest Side members of the Progressive Caucus are Aldermen Chris Taliaferro (29th), Scott Waguespack (32nd), Carlos Ramirez-Rosa (35th) and Nicholas Sposato (38th).
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.
The budget also includes a $9.50 monthly fee per household for garbage pick-up, streamlining building permitting, a new ride-sharing and taxi fee to net $60 million and a tax on e-cigarettes to generate $1 million.
Emanuel also is seeking to expand the home owners’ property tax exemption through state legislation, which would mean that the owners of homes valued at $250,000 or less would not pay the property tax increase for police and fire pension obligations.
The budget also includes $170 million in savings on health care for employees and retirees to save $40 million, eliminating 150 vacant positions to save $14 million, street sweeping on a grid system to save $3 million, closing Central Business District tax increment financing districts to get $113 million, improving 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."
Alderman Margaret Laurino (39th) said that she expects the City 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 does to alleviate the city’s budget program. "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," she said. "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."
Laurino has been meeting with community groups and business groups which represent people who will be hit hardest by an increase in taxes and fees. "But we’re very limited about what we can do without state approval, and what’s happening at the state level — nothing," she said.
Arena also discussed the proposed exemption for home owners. "We know that there are plans to expand the exemption, but we don’t have those numbers yet," he said. "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.
"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."
"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."
Arena said that closing Downtown TIF districts 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," he said. "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 home owners because we as a city are at a crossroad."
Arena said that he thinks that the garbage collection fee is moderate but that it should be imposed on the basis of how much garbage is picked up. "I’ve always said that the city has no new revenue streams, but we can’t ask homeowners to foot the bill for everything," he said.
Alderman Anthony Napolitano (41st) said that ward residents are angry 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," he said. "It’s not heading in the right direction for us."
Arena said that he met with a group of residents 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," he said.
According to the mayor’s office, the city cannot meet its financial challenges through spending cuts alone. Such cuts could include reducing the size of the Police Department by 20 percent, laying off 40 percent of firefighters and eliminating services such as rodent baiting, pothole repair and graffiti removal.