Chicago Mayor Rahm Emanuel is gearing up for a tough fight with labor unions as he struggles to resolve a $24 billion municipal pension shortfall, one of the largest in the country.
According to The Wall Street Journal
, Emanuel inherited the pension mess when he took office and is now facing bills coming due for pensions that cover teachers, firefighters, and other city workers.
Emanuel says he won't consider raising property taxes, as his administration estimates residents would face a jump in payments of 150 percent. And efforts so far to reach agreements with the unions on benefit cuts have not worked.
The mayor could bypass the unions by persuading the Illinois legislature to trim pension benefits or granting the city the power to do it. But at the same time, the state is also facing its own pension shortfall issues.
Emanuel won the mayor's seat in 2011 despite having little union support in an organized labor town. His relationship with the unions is still unstable. Police sergeants last month rejected a pension offer, and he squared off with the teacher's union last September, when educators walked out on a seven day strike over evaluations and layoffs. Teachers are also fighting back at Emanuel's plans to close more than 50 schools.
Annual pension costs could top $1.1 billion within three years, according Emanuel's administration, even without including teachers' retirements.
"There's a set of choices. Reform pensions and continue to be able do other things that are essential for a great city — or make pension payments and do certain things to the rest of the budget that are not part of a great city," Emanuel said.
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