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September 22, 2015

CHICAGO (CBS) — Mayor Rahm Emanuel told aldermen Tuesday the city must raise property taxes by $543 million to shore up police and firefighter pension funds, or face laying off thousands of firefighters and police officers.

The mayor’s budget plan includes phasing in that $543 million property tax over the next four years, with the bulk of it scheduled for this year. He also proposed a new garbage collection fee, and a bevy of other new taxes and fees, as he aims to eliminate the city’s structural budget deficit, and solve the city’s pension crisis. Emanuel also called for an additional $45 million property tax hike to fund school construction.

If approved by at least 26 aldermen, the mayor’s budget plan would amount to what analysts have called the largest property tax hike in modern Chicago history.

The mayor also stressed he has included $170 million in “savings and reforms,” to cut costs before turning to higher taxes.

Ralph Martire, director of the Center for Tax and Budget Accountability, said he expects some Chicago residents aren’t going to like what they hear in terms of new taxes and fees.

“Folks are certainly going to react negatively to an entire series of tax increases that seem like nickel and diming in some instances – the additional cab fee, the additional garbage fee,” he said.

However, Martire said – especially during former Mayor Richard M. Daley’s tenure – the city has used one-time revenues and borrowing to pay ongoing operating expenses, while police and fire pension debt ballooned without proper payments.

“You know, he [Emanuel] will have to make some distasteful choices. That’s the bad news, and I think the worse news is some of these choices should have been made years ago, possibly even a decade or so ago,” he said.

Martire said drastic steps by the city and the state are needed to get the city’s budget and employee pension systems on solid footing.

Source: CBS Chicago