CFL News
October 17, 2012

Emanuel budget hearing: ‘Calm before the storm’

CFL President Jorge Ramirez asks how the city is preparing to make up for its share of pension obligations after asking for concessions from workers

Source: Chicago Sun-Times

By Fran Spielman

One alderman called it the “calm before the storm” and warned that the storm brought on by the city’s pension crisis would be “pretty rocky, so we should enjoy this now.”

Another aldermen welcomed the need for “fewer tough choices,” less than a dozen layoffs and no increases in taxes, fines and fees beyond those set in motion last year.

Opening day of City Council hearings on Mayor Rahm Emanuel’s proposed $6.54 billion 2013 budget was like a walk in the park compared to the political firestorm that greeted the mayor’s spending plan a year ago.

There were sporadic complaints about the need to trim, plant and inoculate more trees and hire more police officers beyond the 500 the mayor has promised to add next year to keep pace with retirements.

There was also a brief outburst about Emanuel’s decision to hire a Japanese technology company to replace a Water Management call center that employs 34 people, 80 percent of them African-American.

“You left them with no recourse. I’m a little ticked,” Budget Committee Chairman Carrie Austin (34th) fumed.

“Every time there’s elimination of employees, and you hire an outside firm to replace those employees, how are we strengthening the middle-class?”

But for the most part, Tuesday’s debate was devoid of political controversy.

Emanuel pitched a shutout on his first city budget — even though it was balanced with $220 million in taxes, fines and fees and 517 layoffs.

This time, the vote could be 50-to-0 again — and it could be the last time that happens.

In 2016, the city is required by state law to make a $700 million contribution to stabilize police and fire pension funds.

“I feel like this is the calm before the storm, and the storm is gonna be pretty rocky, so we should enjoy this now,” said Ald. Pat Dowell (3rd).

Emanuel has asked union leaders to swallow: a 10-year freeze in cost-of-living increases for retirees; a five-year increase in the retirement age; a 5 percent increase in employee contributions, and a two-tiered pension system for new and old employees.

But even if labor leaders agree to all that, new revenues will be needed to meet the unions half-way.

Chief Financial Officer Lois Scott and Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, refused to say where those revenues would come from.

“That hasn’t even begun to be talked about. I don’t have an answer for you on that,” Scott said.

O’Connor said there has been talk of a city lottery with revenues devoted exclusively to pensions. Union leaders are also pushing for revenues from a Chicago casino to be earmarked for pensions, if state lawmakers and Gov. Pat Quinn can ever reach agreement on the perennial issue.

But the alderman said, “We will have more people working toward trying to find ways to reduce the revenue needed if we stay on that part of the message first. Then, once we have gotten it down as far as we possibly can, we can turn to the revenue piece.”

Chicago Federation of Labor President Jorge Ramirez countered, “It’s impossible to fix pensions without new revenue, so what are we talking about? We want to know where that’s gonna come from. It’s impossible to move [toward employee concessions] without knowing where the money is going to come from.”