Mayor Emanuel’s property tax hikes: $750 million is just the beginning

Chicago Mayor Rahm Emanuel’s pension proposal, which is headed to Gov. Quinn’s desk, does very little to reform how Chicago’s pension systems work. Under his plan, workers and taxpayers would experience more of the same tired game, except they would be expected to contribute more to keep it afloat. But if Emanuel is going to rely...

Chicago Mayor Rahm Emanuel’s pension proposal, which is headed to Gov. Quinn’s desk, does very little to reform how Chicago’s pension systems work. Under his plan, workers and taxpayers would experience more of the same tired game, except they would be expected to contribute more to keep it afloat.

But if Emanuel is going to rely on tax increases to “fix” Chicago’s pensions, he’s going to have to raise a lot more than he’s indicated.

His proposal calls for a $750 million total tax increase on Chicago residents over the next five years. And that’s just for the city’s municipal and laborers pension funds. That doesn’t include whatever tax increases he’s got planned to fund the pensions of teachers, police and fire, and transit and park employees.

But what Emanuel and supporters of his plan don’t tell you is that $750 million increase isn’t even enough to pay for the required extra contributions to the municipal fund alone.

For example, the proposed law calls for additional city contributions (above what the city pays today) to the municipal fund totaling $4.1 billion through 2025. But Emanuel’s property tax hikes will only raise an additional $2.25 billion by then.

That means the mayor’s tax hike will be $1.9 billion short of the extra contributions needed through 2025.

Fixing the rest of Chicago’s pensions will require billions more in taxes if Rahm refuses to enact real pension reforms, such as those he proposed in 2012.

Raising taxes is a failed strategy. People and businesses will flee Chicago, just like they have been doing for years.

Rahm needs to go back to the drawing board and consider real reforms.

The Illinois Policy Institute gives him a plan he can work with.