The Chicago City Council voted 46-4 to approve Mayor Rahm Emanuel's 2015 budget. Progress Illinois provides highlights from the council debate on the $7.3 billion spending plan.
With little opposition, the Chicago City Council approved Mayor Rahm Emanuel's $7.3 billion election-year budget that includes tax hikes on parking, vehicle leasing, skyboxes and cable television.
The council debated the 2015 fiscal plan for more than an hour and a half before voting 46-4 to pass it.
The 2015 fiscal plan holds the line on property, sales and fuel taxes and puts off the $550 million contribution the city has to make to its woefully underfunded police and fire pension funds.
City officials say that increased pension contribution does not need to be made until 2016, meaning the mayor and city council members -- who are up for re-election in February -- can put off tackling the city's pension problems and possible solutions, like a property tax hike, until after the upcoming municipal election.
"We're going to work through those issues," Emanuel said, when asked by reporters after the meeting what might be done in the upcoming months to address the city's pension crisis.
Emanuel more than once noted that the 2015 fiscal plan is his administration's fourth balanced budget without increased property, sales or gas taxes.
"Four years in a row, we've made the decision to put money back into the rainy day fund," Emanuel added in remarks to reporters. "And four years in a row we increased our investments, most importantly, in the future of the city of Chicago, the children of the city of Chicago in pre-k, early childhood, after school investments."
Mayoral candidate Ald. Bob Fioretti (2nd) as well as Alds. Toni Foulkes (15th), Scott Waguespack (32nd) and John Arena (45th) voted against the budget. The aldermen are members of the council's Progressive Reform Caucus.
"Police hiring lags behind the needs of our communities, barely keeping up with attrition," Arena said during council debate. "TIF reform is still not part of the picture. Instead, we reach into the pockets of the taxpayers even deeper with fees, fines and taxes."
Fioretti said the budget does not provide "a road map to long-term financial security."
"It continues to use long-term bonds to fund operations, and pushes the burden of payments on our children," the alderman said. "The annual scoop-and-toss bond sales are fundamentally the same as before. The bond proceeds now are indirectly funding operations."
The mayoral candidate also objected to "running another staggering $100 million" in police overtime costs.
"The existing police force is not sufficiently staffed to maintain community policing," he said. "There is no justification for this level of overtime. The right solution requires some of the overtime costs to hire officers."
But Ald. Joe Moreno (1st) pushed backed on the budget's critics, saying they could have put forward budget amendments or other proposals to address their concerns.
"I don't recall ... any amendments about anything from the 50 members of this body to this budget," he stressed. "You're part of a legislative body, legislate ... I don't think you can stand up today and criticize when you haven't even put one amendment into the budget process."
Ald. Joe Moore (49th) echoed Moreno's comments, adding that a "rubberstamp 'no' vote is just as bad as a rubberstamp 'yes' vote."
Next year's projected $297.3 million budget gap will be closed in part with $62.4 million in new tax revenues. The parking tax at public garages will increase 2 percentage points, to 22 percent on weekdays and 20 percent on weekends. The higher parking tax is expected to generate $10 million in 2015, with the revenue used to ramp up the city's pothole-filling efforts.
Another tax hike impacting motorists involves the "personal property lease tax" on leased automobiles, which is set to increase from 8 percent to 9 percent. This additional tax also hits people who lease office machines.
Additionally, the amusement tax exemptions on cable TV and luxury Chicago stadium skyboxes are eliminated in Emanuel's budget. Ending the exemption in the cable TV amusement tax means consumers will have to shoulder an extra $28.80 a year, if cable companies pass the costs onto them, which is typically the case.
More savings are expected to come from various spending cuts, government reforms and closing a loophole in the "use tax" to crack down on local firms that make purchases in other municipalities to dodge city taxes.
On the spending side, the budget includes a notable $1.7 million increase to end homelessness among veterans in the city by the end of 2015, a move commended on the council floor by retiring Ald. James Balcer (11th), a Vietnam War veteran.
Funding for more summer job opportunities for the city's youth, the After School Matters program and early childhood education are among other investments in the budget.
"I took a deep dive into the budget for the 15th year in a row," long-serving Ald. Latasha Thomas (17th), who is not running for re-election in February, told her colleagues on the council floor. "I agree, it's not perfect, but ... I'm pleased to see that we are still investing, moving forward, in our early child care ... and young adults and their jobs."
Thomas thanked the mayor for continuing to invest in the city's youth, adding that, "No matter how hard the budget looks, you continue to invest in that."
Ald. Walter Burnett (27th) praised the mayor for additional investments in housing and mental health services.
"This budget is going to help save people's lives," the alderman stressed.
Before voting 'no' on the budget, Foulkes acknowledged that the city is moving forward, but "there's a huge population in the city that are still not satisfied, and they need help -- our retirees, a little bit more for our students."
"You get students who need help in other places, and in my ward I get budget cuts, and I need more help," she said.
Hikes In Retiree Health Care Premiums
Some $27 million in savings in next year's budget will come from the administration's cost-savings plan to increase health insurance premiums for retired city workers next year. The move is part of Emanuel's 2013 three-year phase-out of the city's 55 percent health care subsidy for most retirees, who will be moved to plans under the Affordable Care Act.
"The budget asks over 9,000 retirees [from the municipal fund] who served in the city for decades to pay up to 25 percent more of their modest pensions to health care costs ," Arena stressed on the council floor. "These public servants will truly be making hard choices in the coming year."
The retirees do not receive Social Security benefits, and the ACA will only cover about 8 percent of premiums, the alderman added.
Before the meeting, retirees and supportive aldermen urged the city council and the mayor to reduce the impact of the health premium increases, which are set to take effect January 1.
"Despite our protests, the first round of cuts went into effect in 2014, and all of us have been struggling this year to deal with the higher insurance cost on our limited income," said Mary Jones, a retired city librarian of 33 years. "Now, the city has announced more health care cost increases for 2015, imposing even greater hardships on retirees."
Medicare-ineligible retirees would be particularly "hard-hit" by the plan, Jones added, noting that their premiums will be more than twice as high as those in 2013, reaching an annual cost of more than $7,500 for an individual with no dependents.
That annual premium increase represents about 25 percent of the retirement income of a retiree with a $30,000 pension, according to AFSCME Council 31.
Ald. Howard Brookins (21st) said the Emanuel administration has "agreed to address the issue," saying a "last-minute solution has been proposed that adds an additional $400,000 to retirees' health care subsidy," which "doubles the current health care subsidy as of today."
However, Brookins said that amount is "inadequate to provide the necessary relief," for the more than 9,000 retirees in the municipal fund who rely on the city for health insurance.
"We stand ready to offer a budget amendment and find additional resources and revenue to facilitate that end," Brookins said.
The alderman said there are some revenue ideas on the table to bolster the $400,000 proposed by the mayor, but he wouldn't offer specifics.
"We're pointing to a very real problem for ... thousands or retired city workers, especially some of the lowest-paid city workers," said AFSCME Council 31 spokesman Anders Lindall. "We want to continue to work with all of these aldermen, work with the administration, to make adjustments in the budget in the weeks to come. We have six weeks until this takes effect ... so there's time to continue working."
Main Image: AP Photo/M. Spencer Green