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Emanuel's 2015 'Balanced' Budget Ignores Pension Funding Again

By Chuck Sudo in News on Oct 16, 2014 4:20PM

Photo by Brooke Collins/City of Chicago

Heading into a re-election in a few months, Rahm Emanuel showed he hasn’t lost his knack for making bold proclamations while offering vague notions on how he will tackle the major issues facing Chicago. The mayor delivered his 2015 budget address before City Council Wednesday. The 30-minute speech served as a recap of his accomplishments during his three years in office as much as it was an initial presentation of next year’s budget. With a mayoral election four months away, Emanuel said this budget was balanced without having to raise property, sales or fuel taxes while addressing what he calls “the greatest challenges to our future: the threat of crime; the quality of our education; and the need for economic growth and good jobs throughout the city.”

"It will do so by continuing the practice of reforming city government, respecting our hardworking taxpayers and, most importantly, by continuing to confront the challenges facing our city — and facing them head on,” Emanuel added.

What Emanuel failed to mention and didn’t directly address in his budget address is the ongoing issue with underfunded city pensions, which looms over the budget like a dirty bomb waiting to explode. A state-mandated $550 million balloon payment to the pension funds is around the corner. Emanuel instead chose to accentuate the positives in the budget, such as closing a $297.3 million deficit with $49.7 million in non-personnel savings and spending reforms; $27.0 million from sweeping aging revenue accounts and grant funds; $26.1 million from improved debt collection; $27.2 million in healthcare savings; $54.5 million from closing tax loopholes and targeted revenue enhancements; $15.9 million through proper allocation of costs to enterprise and grant funds; and $17.6 million from TIF reform.

Three years ago, the projected 2015 budget deficit was $580 million, which Emanuel said was a victory and will no doubt use as a campaign bullet point when the mayoral race kicks into high gear. “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,” he said.

Emanuel’s budget proposal calls for $14.3 million in after school opportunities for nearly 17,000 children, $16.1 million in summer jobs for 24,000 youth, $15.5 million in early education opportunities, doubling the size of the City’s pothole and street repair team to provide year-round road maintenance of our streets, adding more police officers on bicycles, increased funding for graffiti removal, rodent control, tree trimming, planting and removal and more funding to reduce homelessness, particularly among veterans.

Emanuel’s critics were quick to point out the lack of specifics. Mayoral candidate, Ald. Bob Fioretti (2nd) called Emanuel’s budget address “election year fluff regarding potholes and graffiti removal while kicking the real costs down the road.”

"This mayor and this budget shortchanges Chicago's long-term future. Are we going to continue to nickel and dime our residents and our people with cable TV and car sharing fees? Or are we going to get everyone to pay its fair share so we can can solve our budget problems, create confidence in our city and Chicago's economy and make our streets safe and neighborhoods great? ... The conversation should be about what Chicago wants and Chicago needs."

Ald John Arena (45th) said he wasn’t surprised by Emanuel’s address but was ready to get to the business of hammering out the details.

"A budget address is never going to tell you the details. It's going to tell you the top line and what's good about it," the alderman said. "Our job is to go into it and find out how we can make it better, or where we need to redirect priorities."

Emanuel told the Sun-Times after his address he didn’t bring up pension reform because there is nothing he can really do about it until the Illinois Supreme Court decides the fate of a state pension reform bill. “The Supreme Court…has thrown a wet blanket on further discussions,” Emanuel said, adding he’s determined to “hold to the principle that reform and revenue go together.”