Mayor To Propose Higher Prices For Ridesharing, Big Concerts
Taking an Uber or Lyft in Chicago could soon get more expensive. And that’s just one of the new revenue streams Chicago Mayor Rahm Emanuel is set to introduce to aldermen Wednesday when he will lay out his plan to help fill the city’s $114 million structural budget gap.
And that shortfall doesn’t include money the city will have to cough up to help pay Chicago Public Schools security, or for police department reforms.
Here is a look at some of the changes the mayor is expected to present to City Council during his annual budget speech — and a preview of what else could be coming.
New fees for Uber and Lyft
Since their inception, ridesharing companies like Uber and Lyft have tousled with cities over their rules and regulations, which often differ from the traditional cab industry. In 2015, Chicago became one of the first cities to implement a per-ride fee of 52 cents.
Those fees will go up 15 cents under the mayor’s proposed 2018 budget. In 2019, the fee will increase another 5 cents — to 72 cents per ride. Mayoral spokesman Adam Collins emphasized the money would not be used to close the city’s budget gap, but rather will go directly to the Chicago Transit Authority to modernize the city’s train and bus lines.
Increase money for police reform
It’s been nearly three years since the shooting of Laquan McDonald, and there’s still pressure on City Hall to deliver on promised reforms to the Chicago Police Department.
On Saturday, the mayor’s office announced plans to budget $27.4 million toward those efforts in 2018 — up from $3.4 million in 2017. The move comes less than a year after the U.S. Department of Justice issued a scathing report that highlighted patterns of abuse and constitutional rights violations in the Chicago Police Department. The $27.4 million will go toward hiring 100 training officers, 30 additional staff dedicated to community policing, and toward the creation of a 26-member office that will monitor police reforms, according to a news release.
Earlier this year, outgoing Attorney General Lisa Madigan sued the city in an attempt to force federal court oversight of the beleaguered police department. Both sides are still negotiating a possible consent decree, so it’s unclear whether the city will have to devote any more resources to police reform down the road.
Tax hike on large entertainment spaces, cuts for smaller venues
Another proposal in Emanuel’s budget could bump up that ticket price for your next big concert.
The mayor will propose to change the city’s amusement tax, which is tacked onto the price of tickets for live events. The proposal would eliminate the tax for events at venues that hold fewer than than 1,500 people. But spaces bigger than that would pay a 9 percent amusement tax, which is the rate currently charged for sporting events. City officials say the move will generate an additional $15.8 million.
Reigning in overtime
For the last several years, the city has blown its overtime budget. A scathing report released by the city’s inspector general this month detailed a culture of overtime abuse — especially in the Chicago Police Department.
In recent budgets, the Emanuel administration has low-balled the amount of money it expects to spend on overtime — sometimes dramatically.
For example, in 2016, the police department budgeted $80 million for overtime, but spent $143 million. For years, some aldermen have called on City Hall to hire more police officers instead of paying out more overtime. With the mayor’s push to hire additional cops this year, watch to see how much money he wants to set aside for overtime.
Covering Chicago schools security costs
Earlier this year, as the city’s school district struggled to close its own deficit, Emanuel announced City Hall would start paying for Chicago Public Schools’ security costs.
The arrangement, officials said, would continue in perpetuity and would cover school security guards, the Safe Passage program, certain after-school activities, and some school-based police officers. CPS said the move would save them $80 million, but that cost burden will now be shifted to City Hall.
Watch to see where this gets built into the city’s budget, and whether there will be any overlap with the new resources put toward police reform.
The city has a notoriously low credit rating, which means costly annual debt payments.
This year, the city is moving to create a complex financial structure to lower its borrowing costs. The concept is a little like refinancing a mortgage at a bank that will give you a lower rate as long as you make monthly payments on autopay. In this case, the city is dedicating future sales tax revenue to a special entity — known as a “special purpose corporation” — that will hopefully get a more favorable credit rating to pay down debt.
In a presentation to aldermen, mayoral budget officials projected the move could save the city $45 million. But, as Ald. Scott Waguespack (32nd Ward) pointed out before he voted against the new financial structure, the city doesn’t yet know if it will get a better rating — or save money. And so it’s still not clear what this complex new financial structure will mean for 2018’s budget.
911 fee increase
You may not have noticed, but if you have a phone line in Chicago, you pay a monthly fee to the city that helps fund its 911 service.
In 2014, city officials voted to raise the surcharge from $1.40 to $3.90 for each phone line. At the time, they projected it would raise $50 million to help shore up two troubled city pension funds.
But the 911 hikes aren’t done yet. This summer, state lawmakers overrode Gov. Bruce Rauner’s amendatory veto to pass a bill allowing the city to increase the monthly 911 surcharge again.
That paves the way for the mayor to pitch another increase to the surcharge on Wednesday, from $3.90 to $5 per line, to help make state-mandated upgrades to the 911 system, according to Collins, the mayor’s spokesman.
This story has been updated to reflect that the $3.90 surcharge applies to all phone lines.
Becky Vevea covers city politics for WBEZ. Follow her on Twitter at @beckyvevea.