As you probably noticed, Mayor Rahm Emanuel was at the center of a lot of the week’s news here in Chicago.
On Tuesday, he proposed that the state of Illinois raise the gas tax by 20 to 30 cents a gallon to fund much-needed infrastructure improvements, a move praised by some and maligned by others.
Wednesday was an even bigger day for the man reporters call “MRE.” In a speech before the City Council, he laid out four steps he believes could solve Chicago’s looming pension crisis.
The city currently pays about $1 billion a year to cover its four pensions funds, but that’s going to ramp up to $2.1 billion by 2023.
Here’s the mayor’s plan: First, he suggests an amendment to the state’s constitution to eliminate the 3 percent annual automatic increases in pension payouts to retirees. Next, he wants to issue pension obligation bonds, which he says will create savings for taxpayers, but which some tax policy experts say is a risky move. Finally, he’s pushing for legal recreational marijuana and a Chicago casino, moves he says will help fill the city’s coffers.
One location he floated in on the city’s Southeast Side, not far from the Horseshoe Casino in Hammond, Indiana.
Morning Shift covers all of that — and some non-Emanuel news as well — in our Friday News Roundup with host Jenn White.
Mayor Rahm Emanuel’s plan to solve the city’s pension crisis
Jenn White: Let’s start with this state constitutional amendment that would allow public workers benefits to be reduced. Bill, there was immediate pushback against this idea… but first explain what kinds of cuts Emanuel is proposing?
Bill Ruthhart: Well one of the issues is in the retirement benefits — for one labor union in particular — there’s this issue of a three percent compounded cost of living adjustment. Basically, every year, they get a three percent compounded increase… And Emanuel said this is unsustainable, this is part of why our pension problem is so big. Those benefits can’t be touched because of a provision in the state constitution that says no retirement benefits shall be diminished or impaired. And so in order to even attempt to make any adjustments to that, there would need to be an amendment to the constitution to remove that provision. That’s what Emanuel is advocating for. Of course, you got a bunch of people running for mayor who are looking for support of retirees in this election so of course they came out forcefully against this right away.
A.D. Quig: Unions, number one, would freak out. And also, Rahm Emanuel is on the way out. He doesn’t have as much clout as he would otherwise. He was asked straight up, can you pull this off. He’s very confident that he can, but there are a lot of people in Springfield who are completely unwilling to touch this.
Mary Mitchell: I actually think this is a good thing. It’s a case for term limits. He’s on his way out the door and now maybe we can fix a problem that’s been hanging over the city for what, almost two decades? It needs to be fixed.
On the mayor’s proposal to have a city-owned casino
Ruthhart: This has long been sought-after in Chicago as kind of a panacea for funding issues. Emanuel has been hot and cold on this topic. He’s now saying, we obviously need money for pensions. By 2023, the city is going to have to come up with nearly $1 billion in annual additional payments from what they’re paying right now. You can talk about a constitutional amendment all you want — that’s got to get on the ballot, it’s gotta get approved, that’s down the road — this money has to be generated in the next few years. So a casino is one of the ideas that’s being discussed. Emanuel came out again in support of it, in a different form this time. He says all the money should be dedicated to pensions. He even floated a possible location for it on the far southeast side near the 111th street exit off of the Bishop Ford Expressway there.
Almost every candidate in the mayoral race has said they’re in favor of a casino because it’s an easy thing to point to where there’s a bunch of money sitting there. Same with everyone’s pretty much in favor of legalizing marijuana in a recreational sense so that again, they can that share of that tax money and put it towards pensions but even those two things combined isn’t enough to come up with this kind of money.
Quig: It’s not enough and it’s not fast enough. We’ve got a big payment coming up next year that we don’t have a solution for, not to mention how long it will take to build a casino, how long it will to set up the infrastructure to do recreational marijuana and tax it and get all those revenues in.
Mitchell: One of the ideas that was also on the table was to refinance the city’s debt and that way, you know it’s sort of like when you go refinance your house because you can’t pay your credit card bills. It’s not a good thing, and to have to do that is a desperate move. But again, if you take all those pieces — if you can get the casino, if you can get the borrowing done, and the constitutional amendment... if you can go after all those things, at least you can see a little sunlight and you can find your way through.
Ruthhart: Emanuel pulling out all of these ideas also kind of illustrates the lack of ideas coming from the 21 candidates running for mayor. Only one that I can count, Paul Vallas, has put out any kind of plan where he attached numbers to things and we can discuss how realistic his numbers are but I mean, we haven’t heard what Toni Preckwinkle wants to do about pensions, we haven’t heard what Susana Mendoza wants to do, Bill Daley — I haven’t seen him at any of these candidate forums.
Mitchell: But I’ve seen his commercial.
Ruthhart: We’re almost two months out from the election here, right, and so we’re going to be looking for some ideas in a hurry after the holiday season.
Only 6 of the 21 mayoral candidates have released tax returns
Ruthhart: Typically if you’re running for a major office like the mayor of Chicago, U.S. Senate, president — except for Donald Trump — you release your tax returns and you release the entire thing so we can see your attachments, your schedules, so we can see where your investments are. Now both Bruce Rauner and J.B. Pritzker only released the top sheets of their tax returns because they didn’t want to discuss their offshore holdings, among other things. Mayor Rahm Emanuel has released his full tax returns going all the way back to 2005 — we write about them every year. It was surprising that ten would refuse to release their full tax returns.
This is a matter of transparency. If voters want to know the background of who is going to be running this city -- and we have a history of corruption in this city, 29 alderman in prison since 1970. We all know the statistics. It seems to me that disclosing your financial holdings and what you’ve been about is something the voters should know before making a decision.
Quig: There’s too much to be watching, it’s troubling for a reporter. We still have 20 something candidates, we still have an entire objection process to go to. We have hundreds of aldermanic candidates who are out there campaigning on interesting issues, working to oust some longtime alderman.
There’s a ton going on. It’s hard for political reporters to get their arms around it.
This interview has been edited for brevity and clarity. Click the “play” button to hear the entire conversation.
Bill Ruthhart, Chicago Tribune reporter
Mary Mitchell, Chicago Sun-Times columnist
A.D. Quig, Daily Line political reporter
LEARN MORE: Mayor Rahm Emanuel Pushes Public Pensions Fix To City Council, Including Legalized Marijuana, Chicago Casino, Constitutional Amendment (Chicago Tribune 12/12/18)
Rahm’s Pill For Pension Headache Could Prove Hard To Swallow (Chicago Sun-Times 12/12/18)
CTA Board Approves $2.1 Billion Modernization Project (NBC Chicago 12/12/18)
SEIU To Give Cook County Board President $1 Million Toward Her Mayoral Bid (Chicago Tribune 12/10/18)
Financial Secrecy: 10 Of 16 Top Chicago Mayoral Candidates Refuse To Release Full Tax Returns (Chicago Tribune 12/13/18)