Chicago mayor repeats call for pension reform

SARA BURNETT, Associated Press

CHICAGO -- Mayor Rahm Emanuel proposed a new city budget Wednesday that he says will put more police officers on Chicago's streets and more kids in early childhood education without raising taxes or fees. But he warned that without pension reform from Springfield, the financial gains the city has made "will go out the window."

The mayor's $8.3 billion spending plan closes an estimated $298 million budget gap by cutting 275 jobs, some of which the mayor's office said already are vacant, and reducing spending on professional services at city hall and health care for city employees.

The plan relies on an expectation of continued improvement in the economy, including growth in income and hotel taxes, both of which have increased this year as more residents go back to work and visitors occupy more Chicago hotel rooms. It also would add 457 new police recruits and 5,000 new slots in early childhood education classes and create a new small business center to help business owners.

"We are not in this position today by coincidence, but by choice," Emanuel said during a budget address to the city council. He pointed to reforms in last year's budget _ such as cracking down on debt collection and beginning to eliminate the tax businesses pay per employee _ as helping to bring more corporate headquarters and more than 4,000 new jobs to the city.

But the mayor also said outstanding pension obligations threaten to derail the city's progress.

Without reform, he said, the city's payments to meet those obligations would total $1.2 billion within four years, and could grow every year after that. To make those payments without cutting city services, residents would have to pay 150 percent more in property taxes _ an option Emanuel called "unacceptable."

"What we really need is for our representatives in Springfield to step up, take their share of responsibility and not miss this critical opportunity once again," Emanuel said, drawing a standing ovation from aldermen and some audience members.

Emanuel's spokeswoman, Sarah Hamilton, said lawmakers have told the mayor they will address the issue after the November election. Legislative leaders say it may not be until January.

Alderman Edward Burke, chairman of the city council's powerful finance committee, said the mayor's proposal should offer "a glimmer of hope" to Chicago residents.

But Alderman Robert Fioretti was more cautious, saying time will tell if the mayor's revenue projections are overly optimistic.

"I question the numbers up and down, and where our growth is going to occur," Fioretti said.