Chicago aldermen have overwhelmingly approved Mayor Rahm Emanuel’s financially and politically costly 2016 budget plan.
While passage was expected, several aldermen had hinted they might buck the mayor and vote against his spending plan. The final vote count of 36 to 14, and other subsequent votes, show that Emanuel convinced most of the city council that a $534 million property tax hike was the only way the city could afford a state-mandated payment into its police and fire pension funds.
“It is not final. We have more work ahead of us, but from 2011 are we closer to the other side of the shore of fixing our finances than before?” Emanuel said. “I can answer affirmatively…we are better.”
Aldermen who spoke at Wednesday’s meeting did not hold back on how difficult or challenging it was for them to approve the $7.8 billion dollar budget. Once the votes were tallied, aldermanic staffers tweeted or emailed statements from their bosses, reiterating how difficult this decision was for them.
New Ald. Anthony Napolitano (41), a former firefighter, said he’d feel less pressure escaping a burning building than dealing with the budget process. Napolitano ended up voting against the budget, because he said too many of his constituents, even his neighbors who are police officers and firefighters, felt the tax burden was too great.
“Hundreds of people would come into my office, call me or email me: ‘Anthony, we realize this is our pension, but don’t vote for it. This really hurts this neighborhood,’” he said.
But Ald. Pat O’Connor (40), the mayor’s floor leader, said there was no other option.
“We all know the saying: The only two things that are certain is death and taxes,” O’Connor said. “In this instance for Chicago, it is death or taxes. Because clearly our city will decay and will denigrate and our services will be severely hampered if we do not take the appropriate steps.”
Beyond the property tax hike for police and fire pensions, aldermen also approved a $45 million annual property tax increase for school construction and modernization projections. E-cigarettes will also be taxed, and single family homes and smaller apartment buildings will have to kick in $9.50 a month for garbage pickup.. This was a big issue for many aldermen, including Ald. David Moore (17), who supported the mayor’s spending package, but not his revenue plan.
“I cannot in anyway support and go against my residents when they look at me and say don’t you go down there and vote for that garbage fee,” Moore said.
Aldermen also approved new rules for cab and ride-sharing companies. Under the newest agreement, cab drivers will have access to financial aid to make the process of getting a chauffeur’s license less expensive, but they didn’t win their biggest battle: keeping ride-sharing companies like Uber, Lyft and Sidecar out of the airport pickup line. Those companies will have to pay an additional $5 surcharge for every pick up or drop off at O’Hare, Midway, McCormick Place or Navy Pier, and they’ll also have to pay the city a 52 cent fee for every ride. On the cab side, fares will increase 15 percent and the city will also institute a per ride fee of 50 cents.
A few unknowns still remain in the budget. First, the $543 million property tax increase is based on the state lowering the mandated police and fire pension payments, but Gov. Bruce Rauner hasn’t signed off on the bill. Second, the mayor has long promised that homes valued at $250,000 or less would be shielded from the property tax increase, but he needs Springfield for that too.
The mayor’s office worked with aldermen like Michelle Smith (43) to come up with a potential plan B in the event that dead-locked Springfield doesn’t come through. The resolution, which passed today, calls for the implementation of a city-administered rebate program for longtime homeowners.
By press time, responses from Wall Street were mixed. In a statement, Standard and Poor’s officials said their ratings will stay the same, as they still “consider the city’s financial problems substantial, particularly because we anticipate that the city’s required pension contributions will continue to increase and place pressure on the city’s budget—one of the primary drivers of our rating.” Moody’s applauded the council’s efforts in raising revenue for the unfunded pension liabilities, but joined S&P in reiterating the point that the city isn’t certain Springfield will come through.
Lauren Chooljian covers Chicago politics for WBEZ. Follow her @laurenchooljian