|
 Emanuel addressed the Municipal Forum of New York, touting his
fiscal 2016 budget, which includes a record $543 million, phased-in
property tax increase to fund public safety worker pensions. The
visit followed his appearance at a city-sponsored investor
conference in Chicago on Friday.
"The budget ... has to be part of an overall economic strategy,"
Emanuel said Monday. "So therefore addressing our finances head-on,
dealing with the challenges, eliminates one of the weaknesses that
Chicago had for years, that was beginning to erode its strengths."
Paul Brennan, a senior vice president and portfolio manager at
Nuveen Investments, who attended the Friday conference, said city
officials emphasized their "political will" to fix Chicago's
finances, as well as the city's a strong and diversified economy.
"But it's going to take a lot of political capital to tap in to
those resources for more," he said.
 Emanuel's spending plan for the fiscal year beginning Jan. 1 also
relies on the passage of Illinois laws to ease the city's police and
fire pension payments and to shield certain homeowners from the
property tax increase, making it easier for some Chicago aldermen to
support the budget.
"We just didn't get a lot of specifics about a Plan B or additional
solutions that will be needed," Brennan said.
Matt Fabian, a partner at Municipal Market Analytics, who attended
the muni forum speech, said the mayor's message was "the economy
will help them grow out of those budget deficits."
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"The mayor doesn't have flexibility to raise revenue after this tax
increase," he said. "This tax increase will be the mayor’s main shot
in raising revenue."
Tim McGregor, director of municipal fixed income at Northern Trust,
who did not attend the recent presentations by the mayor, said while
the market reacted positively to news of the proposed tax hike, more
needs to be done.
"The property tax probably needs to be tripled to really solve the
problem," he said.
The 50-member Chicago City Council is scheduled to vote on the
budget on Oct. 28, according to the mayor. Meanwhile, the city is
preparing to sell more than $2.7 billion of debt this year despite
warnings that its general obligation rating could be downgraded
depending on the outcome of the mayor's proposed budget.
Chicago, which already saw its GO rating from Moody's Investors
Service sink to "junk" in May, has been struggling with a $20
billion unfunded pension liability and a chronic structural budget
imbalance.
(Editing by Matthew Lewis)
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