City budget approved as mayoral race heats up

Budget-Feature

[dropcap]T[/dropcap]he Chicago City Council approved Mayor Rahm Emanuel’s 2015 budget 46-4 last Wednesday.

The budget includes an increase in parking taxes at city garages and an amusement tax on cable TV bills. In an effort to play down tax increases in the 2015 budget, Emanuel released a statement touting that he hasn’t raised property, sales or gasoline taxes during his tenure.

While the budget does cut the city’s $635 million deficit by more than half, it partially does so by kicking about $550 million of increased payments to the police and fire pension funds to the 2016 budget. Emanuel’s betting on being able to negotiate a deal to restructure those pensions with the Illinois General Assembly ahead of the 2016 budget if he wins the Feb. 24 mayoral election. But even if Emanuel successfully negotiates, the city would still need to increase its payments into the pension funds. And at press time the Illinois Supreme Court had yet to rule if a state law changing the benefits of retired state workers is constitutional.

“There are no long-term solutions contained in this budget address,” said Ald. Bob Fioretti. The mayoral candidate was one of a handful of aldermen who voted against Emanuel’s $8.9 billion budget.

The day before the vote, Fioretti, Ald. John Arena and Ald. Scott Waguespack sent a letter to the Securities and Exchange Commission asking for an investigation into alleged “pay to play” behavior by Emanuel. Specifically, that firms that are managing the city’s Municipal Employee Annuity and Benefit Fund were awarded the contract after donating over $600,000 in contributions since 2011 to Emanuel’s PACs and thus in violation of SEC rules regarding pooled investment funds or “fund of funds.” The letter was filed after a Nov. 13 article in the International Business Times detailing how Emanuel may be in conflict with SEC rules as well as an executive order the mayor signed in 2011 prohibiting city contractors and subcontractors from making campaign donations to city officials.

“We believe that the play to play actions have violated the public trust and are a breach of the fiduciary duty, and we are requesting an investigation,” said the letter.

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