Op-ed: Coming Tuesday: Emanuel's make-or-break budget for Chicago

September 17, 2015

The following opinion piece by Civic Federation President Laurence Msall was published by the Chicago Tribune on September 17, 2015.

On Tuesday, Mayor Rahm Emanuel will present the most important budget this generation of Chicago taxpayers will ever see. This budget will either drive away residents and businesses or give them the confidence that Chicago is capable of long-term, sustainable change.

There's no question that the mayor will need to ask taxpayers to pay more while they receive fewer services. Decades of ignoring fiscal reality have led us to this crisis: a pension system on the brink of disaster, an enormous debt burden, below-investment-grade credit. Most critically, Chicago Public Schools may not have the money to stay open for the entire school year.

The question on Tuesday will be whether the mayor's budget provides enough certainty to residents and businesses that their investments will lead us beyond the morale-killing status quo to a more stable and vibrant city. A possible $500 million increase to the city's property tax levy would be the largest tax increase in Chicago history, yet it would be only a first step. Chicago and its school system will need to make more difficult choices to close structural deficits and pay down nearly $30 billion in unfunded pension liabilities.

Mayor Emanuel can point to several important improvements: retiree and employee health care reform, greater efficiency in garbage and recycling collection, and strong efforts to curtail expensive borrowing practices. The mayor will still need to convince residents and businesses that Chicago is finally turning away from the poor fiscal decisions of its past.

We have to start to spend within our means — no more "scoop and toss" or borrowing for operating expenses. It would be irresponsible to raise taxes unless the city commits to significant cost reductions and efficiencies. Areas that have been considered untouchable should be reviewed, such as staffing for police and fire, the size of the City Council and the aldermanic menu program. Even with a tax increase, many services will have to be reduced or eliminated.

Taxpayers will need answers to longer-range questions. How will the choices in this year's budget impact future debt and taxation levels? How long before the city's debt burden is reduced to a more manageable level? How does this budget take into account what will be asked of taxpayers to stabilize Chicago Public Schools, Cook County and the state of Illinois?

Many of Chicago's fiscal problems are embedded in state law. Any comprehensive solutions will require action from Springfield. State lawmakers should extend the sales tax to certain services, increase revenue sharing with local governments, merge the Chicago Teachers' Pension Fund with the Illinois Teachers' Retirement System and consolidate police and fire pension funds throughout the state.

We cannot change the poor financial decisions that brought us to this crisis. With all that Chicago has to offer, however, we should make the sacrifices necessary to set the city on a more stable fiscal path. Leaders in Chicago and Springfield just need to give taxpayers the confidence that their sacrifice will pay off.