2013 Year in Review on Civic Federation Blog

December 30, 2013

The following posts were among the most highly read on the Civic Federation blog in 2013 and represent some of the most closely followed local government issues this year:

City Council’s Proposed Independent Budget Office, A Civic Federation Recommendation

January 2, 2013

This blog details a proposal introduced in the Chicago City Council on December 12, 2012 to create an Office of Independent Budget Analysis responsible for vetting all financial legislation before the Council. The Civic Federation made a similar recommendation to create a policy analysis office in its 2011 roadmap, Recommendations for a Financially Sustainable City of Chicago.

Update: The Civic Federation supported this common-sense initiative in a May 30 op-ed for Crain’s Chicago Business and a November 20 position statement. Mayor Emanuel announced his support for the proposal in July. A November 18 editorial in the Chicago Tribune cited the Civic Federation’s support and urged the Council to adopt the proposal. On December 11, the Council approved an ordinance to establish the City Council Office of Financial Analysis (COFA).

Korshak Settlement and the RHBC

January 17, 2013

This blog discusses recommendations of the City’s Retiree Healthcare Benefits Commission (RHBC). Since 1988, the City of Chicago and its four pension funds have been party to the settlement of City of Chicago v. Korshak regarding how much the City, the funds and annuitants pay for healthcare. The settlement agreement expired June 30, 2013. The RHBC was tasked with making recommendations regarding the City’s retiree healthcare benefits, their related cost trends and issues affecting the offering of any healthcare benefits after June 30, 2013. The report outlines a series of options: 1) continuing to provide retiree healthcare benefits at current support levels; 2) continuing to provide benefits at reduced support levels; and 3) eliminating City support for retiree healthcare benefits.

Update: In July, Mayor Emanuel announced that Chicago would begin phasing out its subsidy of retiree healthcare in 2014 with the goal of transitioning all but the oldest retirees to coverage under the Affordable Care Act. In a July 23 op-ed for Crain’s Chicago Business, the Civic Federation supported this difficult decision that smartly responds to a federal initiative and will relieve Chicago governments of an unsustainable cost. As a result of this decision, the City projects budgetary savings of $24 million in FY2014, with additional savings in FY2015 and FY2016.

January 1, 2013 Marks End of 2008 Cook County Sales Tax Increase

January 23, 2013

This blog discussed the County’s one percentage point home rule sales tax increase, from 0.75% to 1.75%, that was effective on July 1, 2008. The increase brought the City of Chicago’s composite sales tax rate on general merchandise to 10.25%, the highest rate among major U.S. cities. The Civic Federation opposed the sales tax increase in part because the County had not demonstrated the will and ability to contain spending before proposing increased revenues. With the FY2013 budget, Cook County Board President Toni Preckwinkle fulfilled her pledge to fully roll back the ill-conceived increase.

Update: The County projected a $152.1 million shortfall in FY2014, including approximately $28.0 million in reduced revenues due to the repeal of the 2008 sales tax. The FY2014 budget, which started December 1, 2013, closed this shortfall with new revenue from the Health System’s CountyCare Medicaid expansion plan as well as vacancy reductions at the Health System, increased healthcare premiums for County employees who are not considered full-time and other efficiencies. The Civic Federation supported the Cook County FY2014 budget and praised the Preckwinkle administration for continuing to stabilize the County’s budget without increasing the burden on County taxpayers.

Value of Senior Citizens Assessment Freeze Property Tax Exemption Falls with Home Values

June 7, 2013

This blog is an example of the Civic Federation’s role as a tax policy resource for policymakers, opinion leaders and the broader public. As detailed in this blog, Article IX, Section 6 of the Illinois Constitution permits the General Assembly to grant homestead exemptions that are intended to reduce the taxable value of homeowners’ property. This blog discusses two exemptions dedicated to senior citizens and examines how these senior exemptions fared in Cook County during the run-up and decline of property tax values over the last decade.

Update: The Civic Federation’s work on property taxes this year also included a report comparing effective property tax rates in selected communities around metropolitan Chicago and a report providing estimates of the total market value of real property in Cook County from 2002-2011.

Illinois General Assembly Passes Pension Reform for the Chicago Park District

November 20, 2013

This post discusses pension reform legislation approved by the Illinois General Assembly in November 2013 to address the Chicago Park District’s underfunded pension fund. The bill is the product of negotiations between the Park District, the pension fund and District employees and would make the pension benefits provided by the District more sustainable for beneficiaries and taxpayers. It would additionally ensure the pension fund will not run out of money, as it is currently projected to do within the next 10 years. Instead, it would increase the funded levels from the current dismal 42.4% to 90% by 2049 and 100% by 2054.

Update: The legislation was approved by the Illinois House on November 6 and by the Illinois Senate on November 7. It is now waiting for the Governor’s signature. In an analysis of the Park District’s FY2014 budget, the Civic Federation noted that the District has set a strong example for other local governments by developing a pension plan targeted to the needs of its own fund and not waiting for action from the State of Illinois.

 

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