Emanuel hopeful governor will sign pension reform bill
BY FRAN SPIELMAN City Hall Reporter June 2, 2014 1:54PM
Updated: June 2, 2014 4:30PM
Mayor Rahm Emanuel on Monday sounded more hopeful than ever that Gov. Pat Quinn will sign a pension reform bill that sets the stage for a $250 million property tax increase over five years.
Quinn has until next Monday to decide whether to sign, veto outright or amendatorily veto legislation that increases employee contributions by 29 percent and reduces employee benefits to save the Municipal Employees and Laborers pension funds.
If he does nothing, the bill will automatically take effect.
Until now, Emanuel’s approach has been to publicly pressure the governor with whom he has a difficult relationship. On Monday, he tried the ‘you can catch more flies with honey’ approach.
“The governor understands how important pension reform was for the state and that’s equally true for the city’s future. I believe he sees that and understands that, which is why he pushed for the state reform, which is why I’ve pushed for the reform for the city. It secures [the retirement] of 61,000 people and, since it deals with 52 percent of our unfunded liability, it secures our future as well,” the mayor said.
“We have to make sure also that the city’s fiscal house is in order, just like it was essential for the state,” Emanuel said. “And I believe the governor understands that. . . . The city’s economy is starting to slowly but surely come back. The worst thing to do is not address the challenges we have.”
Emanuel refused to reveal the substance of any conversations he and Quinn may have had — either directly or between staff members.
But, he said, “One thing you can conclude is the passion he brought for pension reform for the state is equal for the city of Chicago because both are essential for our future.”
Aides to the governor said Quinn is still “reviewing the bill” and has neither spoken to Emanuel on the pension reform bill, nor made up his mind.
For weeks, there has been rampant speculation that Quinn will either veto the bill outright or issue some kind of amendatory veto by the June 9 deadline.
The speculation was fueled by Quinn’s “no can do” declaration that forced Emanuel to strike all references to the property tax increase from the bill to win approval from the Illinois General Assembly and by the frosty relationship the two powerful Democrats have had since Emanuel took office.
It was exacerbated by the fact that Republican gubernatorial candidate Bruce Rauner has urged Quinn to veto the bill while the Rauner campaign makes robo-calls urging Chicago voters to turn up the heat on Quinn.
If Quinn puts aside his many differences with Emanuel to sign the Chicago pension reform bill, the mayor will then have to confront the formidable task of persuading aldermen nine months away from re-election to pass the $250 million property tax increase.
Last month, aldermen told the Chicago Sun-Times that Emanuel’s sagging popularity — and the public’s disdain for hiking property taxes — will make it infinitely more difficult for the mayor to win City Council approval of Emanuel’s plan to raise the city’s property tax levy by $50 million in each of the next five years and overall property tax collections by $750 million over the same period.
They pointed to results of a Sun-Times poll showing only 29 percent of those surveyed would support Emanuel if the election were held today. The poll also offered four options for raising revenue to solve the city’s pension crisis; raising property taxes was the least popular. Only one percent of those polled believe raising property taxes is the best way to go.
Emanuel has said repeatedly he’s open to other revenue ideas. But, it has to be “legal,” sustainable and acceptable to a Wall Street rating agency that has already dropped Chicago’s bond rating by four notches in the last eight months, he said.
On Monday, Emanuel was asked whether the 56 percent increase in Chicago’s telephone tax authorized by the General Assembly would allow him to reduce the $250 million property tax increase — or put it off.
He never answered the question, calling it “premature.”
The mayor noted that the telephone tax used to build Chicago’s $217 million 911 emergency center was due to expire, blowing “a huge hole” in the city budget. Even at the current tax rate of $2.50 per month, the corporate fund subsidizes the Office of Emergency Management and Communications to the tune of $40 million per year.
“They had to renew it and in renewing it, it’s also an opportunity to be clear that I don’t think we should be subsidizing it from the corporate account. 911, which all of us rely on, plus OEMC and all the services they provide on major events like the winter storm should be self- sufficient and independent,” Emanuel said.