Mayor Emanuel Announces 2013 City Budget Proposal, No New Taxes or Fees

Mayor Rahm Emanuel during an announcement of the new Back of the Yards high school at Chavez Muticultural Academy in June.

Mayor Rahm Emanuel announced his proposal for the city’s 2013 budget to the City Council today, keeping to his promise of no new taxes or fees.

The $8.3 billion budget balances the city’s finances without introducing new taxes, fines or fees, and eliminates the employee head tax by the end of 2013, according to Emanuel.

“This is a budget that allows us to make critical investments by reforming government instead of raising taxes. It is a budget that works for our taxpayers by making government work better for them,” he said in his prepared remarks.

While this year’s budget doubled water and sewer fees, increased the cost of vehicle stickers, hotel tax and taxes on downtown budget, the 2013 budget plans to reform the city’s tax increment financing (TIF) program, lay off city employees, cut spending and invest in vital programming.

This includes a $5 million investment to fund more than 5,000 extra early-education slots and $4 million to put 4,000 more kids in after school programs. Additionally, Emanuel said the city will triple to 30,000 the number of Chicago Public Schools students who get free eye exams and glasses.

The mayor also plans to tackle the increase of violence in the city by moving all CAPS resources and staffing districts to their respective neighborhoods so each commander can “redesign their own community policing efforts to fight crime and gangs.” According to Emanuel, police manpower will be at full strength as 457 police recruits will be in training by the end of the year.

To fund the budget, Emanuel plans to siphon off $10 million for the city from TIFs to incite development and create jobs.  He plans to do this by declaring $25 million in 22 TIF funds as surplus, the Chicago Tribune reports.

To close the budget hole of an estimated $298 million, the city is counting on $69.2 million in higher debt collections this year, along with a projected $24 million increase next year.

But while there are no plans for new taxes or fees, Emanuel warned that the current pension crisis poses a big financial threat to Chicago, as it counts with an estimated $15 billion of unfunded pension liability. This, according to Businessweek, is out of the control of the city because changes in the retirement funds would have to be made by Illinois lawmakers in Springfield.

“If we do not come to terms with our past and take on our long-term challenges, all of this hard work will go out the window. That is what we face if we do not fix the crisis surrounding our pension payments, or if we do too little, too late,” said Emanuel.