Mayor Calls for Big Tax Hike to Pay for Public Safety Pensions, School Construction
Chicago Mayor Rahm Emanuel is calling for a $588 million property tax increase over the next four years in his 2016 budget – the biggest tax hike in the city’s history.
The proposed 13 percent tax levy hike would pay for police and fire pensions and school construction.
“Our greatest financial challenge today is the exploding cost of our unpaid pensions,” Emanuel said Tuesday to the City Council. “It is a dark cloud that hangs over the rest of our city’s finances.”
Under the plan, Emanuel also is calling for a hike for a variety of fees, including one that is new: a monthly garbage collection fee of $9.50 per household.
“I know this budget is tough and therefore carries political risk,” Emanuel said. “But there is a choice to be made: either we muster the political courage to deal with this mounting challenge or we repeat the same practices and allow the financial challenges to grow.”
Emanuel also said, “One thing we know for sure: we cannot cut our way out of this crisis. To fund our pension obligations through cuts, we would need to cut 2,500 police officers – 20 percent - from our ranks. We would need to close 48 fire stations – that represents half of our fire stations – and lay off 2,000 firefighters, about 40 percent of the force.”
The tax plan was criticized by some officials, saying the city already has among the highest taxes and fees in the country.
The tax hike would eventually cost the owner of a $250,000 home about $588 yearly. The increase would be phased in over the next four years.
Emanuel hopes to get support for an expansion of state exemptions so owners of homes worth $250,000 or less would not see a property tax hike. The mayor also wants some property tax relief for home that costs more than $250,000. But all the exemptions might prove difficult because Ill. Gov. Bruce Rauner would have to sign off on the plan.
The largest portion of the tax increase would apply for this year, while the remainder would apply from 2016 through 2018.
The budget plan also includes a new tax on e-cigarettes and increases on cab fares and building permits.
“With this budget we can be remembered for stepping up to the challenge rather than stepping aside,” Emanuel said. “With this budget we will be counted among the doers rather than among those who dithered. With this budget, when we look back at our public service, our individual names will be in the history book rather than in the guest book.”
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