Big problems, painful solutions could seal Emanuel's fate as one-termer
By FRAN SPIELMAN City Hall Reporterfirstname.lastname@example.org February 22, 2011 8:54PM
Rahm Emanuel and his family watch voting results during election night at the Chicago Plumbers Local 130 UA, 1340 W. Washington St., Tuesday in Chicago. Left to Right: Son, Zach, daughter, Leah, Emanuel, wife Amy Rule and daughter Ilana. | John J. Kim~Sun-Times
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Updated: March 22, 2011 5:52PM
Rahm Emanuel’s Round One victory gives him a running start on confronting problems so severe, the painful solutions could seal his fate as a one-termer.
Whether Emanuel can avoid a one-and-done scenario — assuming he even wants to serve more than four years — will largely depend on how he tackles the biggest financial crisis in Chicago history.
The city is literally on the brink of bankruptcy with a structural deficit approaching $1 billion when under-funded employee pensions are factored in.
Mayor Daley borrowed to the hilt, sold off revenue-generating assets and spent most of the money to hold the line on taxes in his last two budgets. The city even borrowed $254 million to cover back pay raises long anticipated for police officers and firefighters.
There are no more easy answers. Only painful ones that will fundamentally alter services the city provides and further burden taxpayers already at the breaking point.
Now that he’s the mayor-elect, Emanuel must implement the $500 million in savings he identified during the campaign.
After that, he must find new revenues to fill the remaining gap that go far beyond his proposed sales tax on luxury services. A city income tax or a London-style congestion fee cannot be ruled out. Neither can a downtown casino.
Emanuel would have his hands full if city finances were the only looming crisis. But, that’s not his only headache. Here’s a rundown of the challenges confronting Chicago’s new mayor:
Four city employee pension funds will run out of money by 2030. A bill approved by the Illinois General Assembly over Daley’s objections would saddle homeowners and businesses with a $550 million property tax increase in 2015 unless pension concessions are negotiated or another new revenue source is found.
Emanuel has already rankled union leaders by suggesting cuts in the benefits of existing employees. Now, he must negotiate that.
Scared off by the parking meter debacle, Emanuel has already ruled out reviving the $2.5 billion privatization of Midway Airport that collapsed for lack of financing. But, he might want to reconsider to help solve the crisis. State law requires 90 percent of the profits from that deal to be used to bankroll city infrastructure projects and to shore up under-funded pensions.
Chicago Public Schools
This is a hornet’s nest unto itself. Before confronting a $720 million deficit, deciding which schools to close and whether to disband or keep funding a student safety program bankrolled by expiring federal stimulus funds, Emanuel must decide who he wants to lead the Chicago Public Schools. Interim CEO Terry Mazany was supposed to be on loan for $1 from Chicago Community Trust, but he has taken a liking to the job. Emanuel must decide whether to keep him and the seven board members whose terms either have expired or will expire a few weeks after he takes office.
Negotiations are due to begin by year’s end with the Chicago Teachers Union and they could get dicey with more layoffs required and pay raises demanded. Emanuel has also alienated the union with his proposals to create more charter schools, curtail teachers’ right to strike, empower establish performance contracts for each school and ask the General Assembly to mandate a longer school day — if the union won’t agree to work longer hours in exchange for higher pay. With a lawsuit pending on teacher firings, the new mayor also must decide whether future firings will be based on performance and, if so, how teachers will be evaluated.
United and American Airlines are suing to block the city from completing Mayor Daley’s signature project — the massive runway expansion program at O’Hare Airport. They have argued that the debt required would make O’Hare “among the highest-cost airports in the country,” saddling them with costs they can’t afford to pay for a project they won’t need for “many years.” The airlines want a Phase 2 that’s “demand-driven.” Emanuel’s challenge will be to find the appropriate triggers and hammer out an agreement that keeps the gravy train of jobs and contracts rolling.
The embattled police superintendent has been on a one- man public relations campaign for months, trying desperately to save his $310,000-a-year job. But, Emanuel has made it abundantly clear that he intends to dump Weis to improve morale and reverse, what he has called a “culture of preventive policing” by officers who fear that nobody has their back.
Only after a new superintendent is chosen can Emanuel fully deliver on his promise to put 1,000 more police officers on the street by using police cadets to do desk work, cracking down on medical abuses and renegotiating policy that allows officers to take 365 sick days every two years.
Emanuel rocked the boat with his pre-election threat to re-organize the City Council — and strip Ald. Edward M. Burke (14th) of his police bodyguards and, possibly, his Finance Committee chairmanship. Now, he must decide whether this is a fight worth waging. Burke is a crafty, 40-year veteran who knows more about the city budget than anyone else, Roberts Rules of Order and where the bodies are buried at City Hall.
Sure, Emanuel blames Burke for setting the stage for the marathon residency challenge. But, instead of following the Machiavelli playbook by ousting Burke or diluting the Finance Committee’s strength, he might decide to follow another axiom: Keep your friends close and your enemies closer — particularly since Burke’s savvy will be needed when it comes time to remap the 50 wards.
If the day of reckoning is here for the city, as Emanuel claims, it’s fast approaching for the CTA. The state still owes the CTA $82.5 million from the borrowing deal brokered by Gov. Quinn to avert fare hikes. The freeze on fares expires Dec. 31. So do union contracts covering 9,000 CTA employees, who are expected to demand plenty after seeing 1,057 of their members laid off and having a healthy chunk of the 16 percent pay raise they got over the last five-years swallowed up by increased pension and health care contributions.
The CTA managed to balance its budget, only after diverting $203 million in capital funds toward operating expenses over the last two years. That’s a dangerous game that Emanuel cannot continue.
Daley’s final budget assumes a full year of savings from union concessions not yet negotiated. An agreement that calls for city employees to take unpaid furlough days and comp time instead of cash overtime expires June 30, six weeks after the new mayor takes office. Emanuel has already thrown a bone to labor leaders, many of whom supported Gery Chico, by declaring the 24 annual furlough days a disaster for morale that has not produced the anticipated savings. But, he hasn’t said how he plans to replace that money.
Mayor Daley was a victim of Springfield politics controlled by his sometimes rival, House Speaker Michael Madigan (D-Chicago). Daley’s casino gambling, Lake Calumet Airport, downtown circulator and most of his gun control initiatives went down in flames. Now Emanuel, who has a reputation for yielding to no one, must establish his own working relationship with the state’s most powerful Democrat.
Funding for the city, the public schools and CTA hangs in the balance. Madigan remained publicly-neutral in the mayor’s race. But, his handpicked election lawyer represented Emanuel in the marathon residency challenge that failed to knock Emanuel off the ballot.
Chicago Housing Authority
Daley’s risky 1999 takeover of the CHA laid the groundwork for the $1.6 billion Plan for Transformation that tore the high-rises down and replaced them with mixed-income communities. But, there have been complications. The plan is years behind schedule, largely because of the collapse of the housing market.
Displaced CHA residents dumped into communities that lack the social services to support them have also been blamed for a spike in violent crime in neighborhoods once dominated by the black middle-class. Emanuel, who once served as a Daley-appointed CHA vice-chairman, must find a way to breathe new life into the program and ease the transition for displaced residents.
Take one look at the mayor-elect’s detailed position papers and you’ll realize Daley’s government was assisting Emanuel’s campaign. But, it’s one thing to get help from the inside. It’s quite another to govern. Emanuel must now assemble a diverse cabinet comprised of the best-and-brightest Chicago has to offer.
Many of Daley’s people hung on in hope of saving their jobs in an Emanuel administration. But, you don’t win an office to keep your predecessor’s team in place, no matter how close that predecessor may be. Newly-appointed Fire Commissioner Robert Hoff could be one of the lone survivors.
Daley was one of the more accessible mayors in America. Two or three times a week, the mayor would have public events at which he would field any and all questions from the press. Don’t count on it from Emanuel. The Rose Garden strategy he used to win the office is likely to be repeated in the mayor’s office. That could mean only limited access to Emanuel and White House-style daily briefings by whomever he chooses to be his press secretary. That’s likely to go over like a lead balloon with reporters who’ve grown accustomed to Daley’s sometimes colorful, off-the-cuff remarks. But, Emanuel has run as disciplined a campaign as Chicago has seen in years. He’s likely to govern the same way—and punish those who dare to leak information to the press.
Taste of Chicago
To reverse $7 million in festival losses over the last three years — and absorb a $2 million cut in Daley’s final budget — the city is handing the Taste off to the Chicago Park District and folding the city’s four least-popular music festivals into the Taste.
Viva Chicago, Country Music, Gospel and Celtic Fests will no longer be stand-alone weekend events with big-name talent. They will be one-day events during the Taste that will focus on local acts. If restaurants and four days of local music are not enough to draw the same big crowds, many of them suburbanites, Emanuel just might revive the admission fee that Daley nixed.
With the powerful Pritzker family on the Children’s Museum board among his biggest financial backers, Emanuel has hesitated to join Chico in vowing to bury one of Daley’s most controversial projects. But, now that Emanuel is the mayor-elect, it’s decision time for a project stalled by a fund-raising slowdown and a threatened court fight over 172 years of legal protections that have kept Grant Park “forever open, clear and free,” as civic leader Montgomery Ward sought.
There are three basic choices: negotiate a long-term lease at Navy Pier to lock in an anchor tenant that has drawn families and school field trips from across the city; find an alternative site away from Grant Park or forge ahead with a project that was rammed down the throat of local Ald. Brendan Reilly (42nd), an Emanuel supporter.