the editors of the Chicago Tribune respond to Chicago Mayor Rahm Emanuel’s plan for addressing Chicago’s public pension problem:
Three years into his mayoral term — after campaigning on a promise to fix pensions — Rahm Emanuel finally is ready to file legislation that would reduce the city’s dangerously unfunded pension liabilities for municipal workers and laborers. Emanuel says he has a deal with those employees’ unions that would bring two of the city’s four funds for retirees closer to full funding. The agreement includes a mix of politically risky property tax increases and benefit cuts.
Note the operative word: two of the city’s pension funds. City Hall hasn’t come to terms with police and firefighters over the unfunded liabilities in their pension funds, or with teachers who work for Chicago Public Schools, a separate taxing body. Yet to stabilize just two of the funds, he already is proposing an increase in property taxes, to be phased in over five years.
Why has it taken the mayor so long? I can think of any number of reasons. He may have had the vain hope that the Illinois legislature would save the city. It’s far from a done deal that they will even approve his plan or whether once approved it would survive court challenge.
He may have hoped that an improving economy would render the question moot. That hasn’t happened.
He might have been too busy planning his next career move to formulate a plan.
Something that non-Illinoisans should keep in mind: the city is just one of dozens of independently taxing entities, all of whom will undoubtedly be increasing the property tax. Add to that the “temporary” increase in the personal state income tax which the governor has proposed be made permanent and the state’s persistent economic woes and we’re right on track to be the state with the highest taxes, the highest rate of unemployment, and the lowest state contribution to education.
For most people Illinois is only an attractive place to live when business in the state is good. Attracting blue chip businesses (which will only cut jobs going forward) with inducements in the favor of special tax treatment just puts the burden on companies and individuals who can’t get similar treatment is a lousy strategy. It appears to be the only strategy our state’s leaders have.