Mayor Rahm Emanuel directly introduced to Council the official levy and revenue ordinances detailing how he plans to pay for his proposed $7.8 billion dollar budget at yesterday’s abbreviated City Council meeting (we provide a breakdown of those plans below). The public hearing that followed was much lengthier, approximately 40 people signed up to testify, but for most of the hearing, less than 10 aldermen were present. The Mayor left immediately after his press conference.  

With budget hearings taking up the bulk of the Council’s time over the past two weeks, and more closed door meetings to come before the City Council officially votes on the Mayor’s spending plan on October 28, there was only a handful of old business items to be approved, and most of it was routine.

The Council approved dozens of appointments to and budget requests from various Special Service Areas, ordinances transferring TIF funds for capital improvement projects at CPS schools, and Ald. Will Burns’ (4) resolution supporting the rights of adjunct faculty to unionize.

New Business

Save for the Mayor’s budget ordinances, there wasn’t much new business. Chairman Ed Burke (14), introduced an ordinance regulating so-called “party buses” in the City after a recent shooting in the University Village neighborhood that left three people injured. According Ald. Burke’s press release, “the driver did not keep a passenger roster or make sure passengers on the bus were legally old enough to drink alcohol.” The ordinance would require party bus operators make sure entities chartering the bus are licensed to sell alcohol, and there is a designated person to check IDs of all passengers on the bus. Ald. Anthony Napolitano (41), Ald. Chris Taliaferro (29), Ald. Ariel Reboyras (30), and Ald. Willie Cochran (20) are co-sponsors.

Ald. Matt O’Shea (19) introduced a resolution calling for a voluntary $1 service charge on the “nearly 100 million passengers flying into or out of Chicago.” Money from that service charge would go toward increasing police presence at and around the airports. Citing the City’s “unprecedented gang and gun violence crisis” and the “alarming rate of illegal guns on the street” in the preamble to the ordinance, Ald. O’Shea suggested the City tap into the $1.8 billion in revenue O’Hare and Midway airports generate.

And the Chicago Public Health Department, in conjunction with Ald. Burke, introduced a resolution calling on the Food and Drug Administration to reverse its decision to allow the use of opioid prescription drugs for pediatric patients. The ordinance cites a recent surge of prescription drug abuse in Chicago; between 2009 and 2011, Chicago saw an 11% increase in the number of opioid-related emergency room visits.  

Mayor’s Press Q&A

At his usual post-Council meeting press conference, Mayor Rahm Emanuel defended his unpopular revenue plans, a historic property tax increase and a new monthly garbage fee, in addition to fielding questions about the recent federal indictment of former Chicago Public Schools CEO Barbara Byrd-Bennett.

“I’m proud we are submitting this [budget] today,” Mayor Emanuel told the room before taking questions. Asked if he made any changes to his budget as a result of aldermanic objections, Emanuel responded, “The short answer...no.”

He said the budget is based on conversations already had with the unions, the Civic Federation, and aldermen. Those meetings go back “months,” the Mayor said, “and we included items discussed in those meetings.”

And even though he wasn’t asked about his plan to privatize the city’s 311 call system, a plan that garnered a significant amount of criticism from aldermen, Emanuel made a point to defend it, “I stand by what we’re proposing as it relates to 311 reforms, mainly because for the first time ever we have a lot of effectiveness in our neighborhood services.”

It would cost the city $40 million dollars to upgrade the system, the Mayor added. “We don’t have that.”  

As for the Byrd-Bennett indictment, Emanuel denied any connection with Gary Solomon, co-owner of SUPES Academy, who was at that moment entering a not guilty plea in federal court for his alleged involvement in the $23 million dollar kickback scheme with the no-bid contract CPS awarded his firm.

When asked to detail how he knew Solomon, where they met, if he knew Byrd-Bennett worked for his company, and why he wasn’t more involved in the contract selection process, Emanuel responded “there is no relationship between me and Solomon. Ever.”

“There is a long history of mayors getting involved in contracts,” Emanuel added. “I don’t get involved in contracts.”

Public Hearings

Approximately 40 witnesses submitted pink slips to testify on the Mayor’s budget. Civic Federation President Laurence Msall kicked off the public portion of the meeting by voicing his support for and urging the Council to approve the Mayor’s spending plan.

“We applaud the Mayor and his administration for the long overdue plan to address the city’s grossly underfunded public pension system,” Msall said in a short speech highlighting the findings of his lengthy 111 page budget analysis. He spent nearly two hours fielding questions from aldermen.

Calling the Mayor’s $1.2 billion dollar FY2016 property tax levy “painful but very necessary”, Msall advised the Council to support the mayor’s spending plan and “stabilize the city’s two worst funded pension plans.”

But he also warned that the Mayor’s budget relies on a lot of variables that could lead to bigger cuts in the future, “We are concerned that even with this extraordinary property tax increase, the city has some expenses that may not be covered.”

If Chicago Public Schools’ liquidity crisis and the city’s ongoing structural deficit aren’t addressed, additional tax increases and service cuts will be needed, Msall said. If Springfield rejects Mayor Emanuel’s plan to extend the city’s pension payments, the city will have to pay an additional $220 million towards the Police and Fire pensions, Msall added. The courts also have yet to rule on the legality of the city’s decision to phase out its subsidy of retiree healthcare costs for its non-public safety unions. “If that should be struck down, the city faces additional hundreds of millions of costs for its health care retirement system,” Msall warned.

Aldermen used the time with Msall to ask for alternative proposals to the property tax hike. When Ald. Joe Moore (49) asked Msall to highlight potential cost savings and quick fixes for this year’s budget, Msall said the Council needs to take a hard look at the budget and find the “optimal number” and cost of city services.

“Those obviously are good recommendations, and they will take some time to fully implement, but is there anything you can identify that we can implement in the next two weeks?” Ald. Moore followed up.

Msall said cutting borrowing would be a good start, as the city’s outstanding debt is the biggest cost after its unfunded pension liability.  Msall also defended Mayor Emanuel’s plan to privatize 311, echoing the mayor’s argument that the cost of the updating the system would be a bigger burden than privatization.

Samples From Public Testimony

On the proposed privatization of the city’s two HIV clinics:

“The city’s HIV clinics are not sustainable in the post-Affordable Care Act landscape, and the transition of these clinics is the best long-term plan for HIV patients in Chicago. These funds will be used more effectively and efficiently by community based clinics… That support, however, is not without concerns. Our greatest concern is that if the city decides to transition medical services to other organizations, people with HIV could drop out of care… The service transition plan should include steps that ensure all current patients are successfully linked to a primary care medical home.” – Maximillian Boykin, AIDS Foundation of Chicago

On the proposed tax on e-cigarettes:

“The mayor’s plan to use $500,000 per year in e-cigarette tax revenue to open five new [school based] health centers is a smart investment in our city’s young people. We estimate that this plan will ensure over 3,000 more Chicago people have access to support they need to be healthy, safe, and ready to learn… Because the tax is intended to serve as a capital investment, we wouldn’t be concerned about the long-term viability [of revenue from the e-cigarette tax].” - Heidi Ortolaza-Alvear, EverThrive Illinois

On the proposed property tax hike and homeowners exemption:

“We don't even know yet the full impact of the tax increase, because all of the properties in the city have yet to be assessed. What we know so far is that assessments in southern Cook County have increased at an average rate of 30%... This policy is flawed and short-sighted. It's disingenuous to shine a light on what more the central business district can do without recognizing that same light illuminates the neighborhood businesses that will also be picking up the tab.”  – Tanya Triche, Illinois Retail Merchants Association  

“Estimates indicate that rents will increase more than $380 annually, or $32 a month over the next four years, because renters pay property taxes too. As you search for ways to alleviate the burden of property taxes on homeowners, we strongly urge you not to do so at the expense of Chicago’s renters… Instead, a rebate program targeting only the most severely impacted taxpayers would alleviate the harmful effects of a property tax shift. We support that kind of program.” – Michael J. Mini, Chicagoland Apartment Association

“Real estate property taxes in Chicago account for nearly 76% of large office buildings’ total operating expense… We’ve been told that if distributed evenly, there would be about a 12% increase in tax bills... The increase grows to nearly 17% and other non-partisan estimates are even higher: as much as 22%... For the tenant of a modest 20,000 square foot space in an average building, that’s an increase of over $25,000. It brings that tenant’s property tax bill to more than $177,000.” – Ron Tabaczynski, Building Owners and Managers Association of Chicago

“In addition to the large property tax in the 2016 budget, the hotel industry continues to be hurt badly by the lack of enforcement of the city’s vacation rental ordinance… The license fee in Chicago is $500. It’s good for two years. New York City’s license is $5,000... If you take all the units [Airbnb and other vacation rental companies] rent, $500 times 5,000 [units], that’s $2.5 million. Right off the bat.” – Marc Gordon, Illinois Hotel & Lodging Association

On the proposed privatization exploration of 311:

“It makes no sense to privatize what connects their residents to their government. It makes no sense to privatize 311 and put the nerve center of the city in the hands of a corporation whose number one goal and/or priority is to make a profit. It makes no sense to privatize and get rid of 311’s biggest asset, which would be experienced, knowledgeable workers who are committed to the City of Chicago.” – Louis Shuttlesworth, 311 operator

On Police Superintendent Garry McCarthy:

“I support and thank especially Alderman [Raymond] Lopez and the other City Council members who have called for the firing of Garry McCarthy… His military policing and racial profiling in some parts of the city is a threat to all parts of the city. This superintendent is part of the problem instead of the solution and it’s time for him to go.” – Evangel Yhwhnewbn, Chicago resident, 15th Ward

On proposed changes to rideshare pickup rules:

“I want to first of all, thank Mayor Emanuel for supporting the rideshare agenda… I’ve been driving for over two years. I’m 74 years old so I guess I’m a senior, and it’s a great job for seniors... I drive to the airport but it’s unfair to me that I have to come back without a ride… When you drive in from the airport, you see the big sign, ‘Welcome to Chicago.’ When a tourist arrives in Chicago, the first person he gets an opportunity to talk to is his transportation driver... I want to be the Wal-Mart greeter for Chicago.” – Jim Evans, UberX driver, 45th Ward