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Emanuel Stokes Pension Crisis Fears In Budget Address

By Chuck Sudo in News on Oct 23, 2013 5:45PM

2013_10_23_emanuel.jpg Mayor Emanuel revealed his $8.7 million 2014 City budget Wednesday crowing about how his budget team managed to balance a $338.7 million deficit without a hike in property, sales or gasoline taxes and putting Springfield lawmakers on notice that solving the state’s unfunded pension liabilities requires relief for Chicago’s own looming pension crisis.

The City faces a $600 million balloon payment to stabilize police and firefighters pensions in 2015 under a 2010 state law Emanuel called “mindless, reckless and irresponsible.” Emanuel said during his address, “Should Springfield fail to pass pension reform for Chicago soon, we will be right back here in Council early next year to start work on the city’s 2015 budget - a budget that will either double city property taxes or eliminate the vital services that people need,” Emanuel said. “Without reform, we cannot make the critical investments in our future, and the future of our children. Without reform, we cannot be the city that we want to be.”

Emanuel used his budget address to lobby Springfield to pass a bill that would postpone the balloon payment to Chicago’s Police and Firefighters’ pension funds to 2022 and implementing a series of annual property tax increases starting in 2018.

The mayor added:

“I believe I speak for members of this council when I say that we will not preside over a city in which garbage is not picked up, graffiti is not removed and libraries and other vital services must be shut down,” the mayor said.

“And we will not preside over a city in which skyrocketing property taxes drive thousands of senior citizens and middle-class families out of their homes — and out of Chicago. ... We cannot allow the future to become a stark choice between a pension payment or police, a pension payment or parks, a pension payment or school principals.”

Emanuel made no mention of the over $34 million in fee and fine hikes and a proposed hikes in the city cigarette tax and amusement tax on cable television bills in his address, opting instead to tout the programs those hikes are expected to fund. He also noted the $339 million deficit was more than half of the one he inherited when he assumed office two years ago.

“We have reduced our structural deficit by making city government smaller, smarter, and simpler. We have coupled necessary reforms with improved services so city government works better for all our residents.”