Rahm’s new budget packed with fee hikes and false hope

Rahm’s new budget packed with fee hikes and false hope

In his annual budget address, Chicago Mayor Rahm Emanuel painted a rosy picture about city finances while selling more tax and fee increases.

As part of the annual budget process, the Chicago City Council held a special meeting Oct. 18 to allow Mayor Rahm Emanuel the opportunity to present his 2018 budget. This address is typically a feel-good look at the upcoming year and the most recent version was no different, despite the city facing a $288 million shortfall.

Emanuel used his address to “thank all of Chicago’s taxpayers for doing their part to solve Chicago’s financial problem.” Chicagoans have been hit with multiple tax increases in recent years: a Chicago Public Schools property-tax levy of $250 million, $240 million in water-sewer taxes, and $225 million more in property taxes by 2019, which doesn’t even account for CPS’ increase of $225 million that was authorized by the state in August.

What’s in the budget

So what is Emanuel proposing?

  • Higher 911 fees: The mayor has proposed to raise the 911 monthly surcharge to $5 per line up from $3.90 “modernize [the] 911 and 311 [systems],” Emanuel said, according to DNAinfo. The city increased this fee in 2014 for the same purpose. Chicagoans already pay the nation’s highest wireless taxes on their cellphone bills.
  • Increased fees for ridesharing: Riders would have to pay an additional 15 cents per ride in 2018 and an additional 5 cents in 2019 for a total of 72 cents per ride, up from 52 cents. These revenues will be used to fund improvements to the Chicago Transit Authority.
  • Amusement tax changes: This would change the application of the amusement tax so that venues with fewer than 1,500 seats would be exempt. Those venues and events, including all Chicago sports, would be taxed the same at 9 percent. Currently, sports events are taxed at 9 percent while concerts are taxed at 5 percent.
  • War on rats: Chicago was recently named the rattiest city in the country for the third year in a row. Emanuel has included $1 million in new spending on rodent control crews and new garbage carts.
  • TIF surplus: The mayor is expected to declare a surplus in TIF funds to send $88 million to CPS for increased officer patrols in schools and to expand after-school and Safe Passage programs.
  • Chicago Police Department: The mayor has proposed to hire nearly 1,000 new police officers, increasing officers 100 per month, every month, until April. The city plans to spend $27 million on police reforms for training and community policing, $5 million in new hiring, and $100 million in police overtime.

Despite these changes, Emanuel said that, with the 2018 budget, “Chicago is on firmer financial footing than we have been in many years.”

Unfortunately for taxpayers, this isn’t a completely honest assessment. The city budget has grown from $6.3 billion to $8.6 billion under Emanuel’s watch with the narrative that all of these changes and tax increases were necessary to fix Chicago’s pension mess. “[O]ur pensions are on the path to solvency,” the mayor said in his address. But the Illinois Department of Insurance released a report this month showing unfunded liabilities continue to grow.

Regardless, the city has yet to enact pension reforms or other fiscal or economic reforms that would bring costs in line with what taxpayers can afford.

Next steps

For the next month, City Council members will hear from department heads as those leaders justify annual spending appropriations and face questions about their previous and current operations. The trouble is, half of the aldermen don’t bother showing up to these meetings, which follows their performance at regular committee meetings.

When those meetings have concluded, and the “love fest” has run its course, the City Council will hold meetings for three consecutive weeks, and will vote on the budget Nov. 22. The public will have an opportunity to present their views after the City Council meeting Nov. 8.

The pension crisis looms large over City Council actions and continues to threaten residents with additional taxes and fees. In the meantime, taxpayers shouldn’t simply hope for the best while expecting the worst. There’ll be plenty of opportunities for constituents to attend City Council meetings before the budget vote takes place in mid-November. They should ensure the City Council knows where they stand.

Real change is possible; look no further than the Cook County soda tax fight.

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