Pension crisis looms over Emanuel’s budget address
BY FRAN SPIELMAN City Hall Reporter October 23, 2013 10:36AM
Mayor Rahm Emanuel delivers his budget message to the City Council on Wednesday.
- CHART: City deficits and pensions
- Quick Hits: Emanuel talks with the Sun-Times Editorial Board
- Video: Furious Emanuel gives impassioned defense of city’s CFO
Updated: November 25, 2013 1:07PM
Mayor Rahm Emanuel on Wednesday raised his revenue estimate from speed cameras to $70 million in 2014 and portrayed the windfall as a way to avoid “penalizing” children for the federal government’s decision to “walk away” from kids programs.
Earlier this week, Budget Director Alex Holt used a $60 million figure during aldermanic briefings on the $6.9 billion budget that Emanuel presented to the City Council on Wednesday.
During a meeting with the Chicago Sun-Times editorial board, Emanuel and Holt raised the revenue estimate to $70 million and offered a new rationale for hammering speeders.
With charts in hand, the mayor noted that the federal government has been “walking away” from children’s programs, forcing Chicago to step up and fill the gap — by creating a “Kids Fund” bankrolled by speed camera revenues.
“Summer programs, after-school programs and school breaks, children’s advocacy, early childhood education where we added pre-K for the children and full-day wrap around services for their parents, violence protection and prevention programs, homeless services, library you-media and children programs, crossing guards and school policing come to $72 million. Speed cameras, we think, will net around $70 million,” the mayor said.
“All of those used to rely on grants from the federal government. We’ve taken them off that process and put ’em on the corporate account and put a revenue source that pays and maintains them and increases them where we can, so the children of Chicago do not become victims of whatever Washington’s political actions are.”
Aldermen scoffed at even the revised revenue estimate.
They point to the 204,743 warning notices churned out by speed cameras installed around four parks in just 40 days during a recent test run. That would have generated $12.2 million in fines if those cameras had been playing for keeps, which they are now.
“You’re looking at four or five times that amount,” said Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee.
Beale is one of many aldermen concerned about a political fallout that rivals the parking meter fiasco when speeding tickets start arriving in their constituents’ mailboxes.
The mayor countered, “The problem here is speeding — not speed cameras. Don’t speed near a school and a park. You’ll be fine.”
The $338.7 million shortfall that Emanuel closed with the speed camera windfall and $34.2 million in higher taxes and fees pales by comparison to the looming pension crisis that has Chicago “on the brink of a fiscal cliff,” as the mayor put it.
Emanuel used his budget address and his editorial board appearance to put state lawmakers on notice: Go ahead and solve Illinois’ pension crisis first. But if they don’t confront Chicago’s pension problems “immediately” after that — like the very same day — Emanuel said he will start drafting a doomsday 2015 budget that decimates city services.
In 2015, the city is required by state law to make a $600 million contribution to stabilize police and fire pension funds that now have assets to cover just 30.5 and 25 percent of their respective liabilities.
Emanuel wants the General Assembly to impose annual property tax increases on Chicago homeowners and businesses but put off the balloon payment to shore up police and fire pensions until 2023.
“We didn’t get here overnight. We’re not going to get out of here overnight. It’s a balanced way that doesn’t tip the scales. We’re walking a very thin line on how to increase the stability of the funds without tipping the overall economy of the city,” the mayor said.
He added, “I believe revenue and reform go together. Springfield raised taxes without reform. Now, how’s reform going? They’re in a world of hurt.”
The mayor’s budget includes another $75 million for police overtime that has masked a shortage of officers that, some aldermen argue, can only be solved by hiring more officers.
Emanuel has set aside money to hire only enough officers in 2014 to keep pace with attrition.
In budget hearings that begin Monday, the City Council’s Progressive Caucus is vowing to find the $50 million needed to hire at least 1,000 new officers.