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Mayor grapples with weighty problems that he inherited

Mayor Rahm Emanuel came visit Urban Alliance Chicago Thursday ColumbiCollege Chicago along with First Lady Michelle ObamAmy Rule. Urban Alliance

Mayor Rahm Emanuel came to visit Urban Alliance Chicago on Thursday at Columbia College Chicago, along with the First Lady Michelle Obama, and Amy Rule. Urban Alliance Chicago is an education and employment program for underserved high school seniors, and the First Lady's visit is part of her focus on youth empowerment. July 18, 2013 | Alex Wroblewski~Sun-Times

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Updated: August 22, 2013 6:53AM



Any week that includes persuading Ald. Tom Tunney (44th) to drop his opposition to renovating Wrigley Field should be a home run for a Chicago mayor.

But it was a political disaster for Mayor Rahm Emanuel, thanks to a double play with the potential to undermine his fast-approaching re-election bid.

Moody’s Investors ordered an unprecedented “triple drop” in the city’s bond rating, citing Chicago’s “very large and growing” pension liabilities, high fixed costs and debt load, “unrelenting public safety demands” and a historic reluctance to raise local taxes that has continued under Emanuel.

The move will trigger tens of millions of dollars in higher borrowing costs. It also sets the stage for a string of local tax increases and painful concessions certain to alienate union leaders.

The other shoe was dropped by the mayor’s handpicked school team for identical reasons with similar consequences.

More than 2,100 Chicago Public School teachers and support staff were fired because of a $400 million pension payment bearing down on the system.

It brings to nearly 3,000 the number of CPS employees laid off in an avalanche of budget cuts that threaten to make a mockery of Emanuel’s signature plan for a longer school day.

At the very least, both blows disrupted the narrative of financial turnaround, and urban and educational renewal coming out of Emanuel’s spin machine.

“A lot of people who thought he was gonna come in and be the genius to fix things are probably wondering what these policies really have done,” said Ald. Scott Waguespack (32nd).

In an interview with the Chicago Sun-Times, Emanuel called the triple-drop in Chicago’s bond rating — on the same day that Detroit declared bankruptcy — “a wake-up call” to the alarm he’s been sounding for years.

“I said it in my campaign, which I paid a political price for. I said it in my first budget. I said it in my second budget. I went down to Springfield and said you have to deal with the cost-of-living adjustment. And I negotiated something with the sergeants” only to have it rejected by the rank-and-file, he said.

“At every level, I’ve kept focusing that, if we don’t deal with this, we’re gonna steal from our future.”

The mayor’s political argument only goes so far, according to University of Illinois at Chicago professor Dick Simpson, a former Chicago alderman.

“Many people know one of the fired school employees. They were fired — not because they weren’t doing their jobs, but because of how school finances were handled,” Simpson said.

“Even though Rahm isn’t personally responsible for all of these events, he becomes a lightning rod for this displeasure. Rahm Emanuel is losing the African-American vote. And independent voters are gonna be swayed by school closings and bond ratings.”

Simpson noted that public opinion polls conducted after the Emanuel-provoked teachers strike, but before the closing of nearly 50 public schools, showed a sharp decline in the mayor’s approval ratings, particularly among black voters.

Emanuel is now under the gun politically to safeguard 30,000 mostly African-American students affected by school closings and deliver on his promise to improve their new schools.

Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, acknowledged there will be “huge political fallout” for Emanuel if the city and school pension crises remain unsolved and there is no relief from a state law that requires Chicago to make a $600 million contribution in 2015 to stabilize police and fire pension funds.

But he said, “If people begin to understand we need fundamental change and Springfield relieves us of these artificial deadline dates they’ve put on us and allows us to solve the problem over time, as they are, the fallout would be significantly reduced. We’d be able control the way expenditures are made and taxes are rolled out.”

Emanuel bristled at Moody’s suggestion that Chicago has “nearly unlimited ability to raise property and sales taxes” and should use it to reverse a chronic under-funding of its pension funds.

“This is not a solution that’s resolved with revenue. It’s a solution that’s resolved with reform. There will be no discussion of revenue unless we have a comprehensive discussion based on reform,” the mayor said.

O’Connor added, “No sane person is gonna raise taxes first. . . . You don’t do it on the front end because then, pension fixes will never come.”

Emanuel’s formidable fund-raising machine shifted into high gear months ago to fuel his re-election bid and scare off challengers. He now has $4.1 million in the bank, $2 million of it raised in the last quarter. New $5,000-per-person fund-raising limits guarantee that he won’t have the $13 million he had in 2011. But he’ll probably have twice as much as anybody else — if a credible candidate even emerges.

“Jane Byrne wasn’t a credible candidate when she declared for mayor against Mike Bilandic in 1979 and she ended up being mayor,” O’Connor warned. “Credibility had nothing to do with it. It was the confluence of circumstances that got her elected.”

David Axelrod, who worked together with Emanuel in the Obama White House, said his friend of 30 years will be judged in 2015, not on how jarring this week’s double-whammy appears today, but on how much progress has been made by the time Chicagoans go to the polls.

To his credit, Emanuel has already taken the bold step of phasing out Chicago’s 55 percent subsidy for retiree health care by January 2017 while continuing that coverage for the oldest retirees.

“The question is not whether this is a challenge, but how he deals with it,” Axelrod said.

“Rahm is a problem solver. He has the fortitude to stand up and do different things. That’s what this is gonna require. At the end of the day, he will get credit for standing up to problems that were not of his own making, but fell to him to solve.”



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