Despite a recent report ranking Illinois number two in the nation in business creation, it’s no secret there are looming fiscal issues on the city, county and state levels that will have a long-term impact our buildings, tenants and the entire business community.
And while the solutions won’t be easy, these fiscal challenges must be faced head-on and our political leaders will have to make some tough decisions.
Though CBS Chicago recently reported the City of Chicago is facing a $1 billion shortfall in its operating budget and a combined $20 billion pension budget deficit, we’re happy to see that Mayor Rahm Emanuel will present the 2016 City of Chicago budget to the City Council one month early in an effort to address the pension crisis and encourage more debate and cost-cutting ideas.
We were also disheartened to read in the Chicago Sun-Times that Chicago Public Schools (CPS) has hit its breaking point and can’t make an obligated pension payment this month without significant classroom cuts. The nation’s third largest school system has never missed a pension payment, and Ernst & Young recently recommended the City Council enact two different property tax increases for the schools totaling $450 million, even if CPS makes drastic budget cuts, and receives pension relief and additional requested state funding. In an effort manage the fiscal crunch, the Chicago Board of Education approved more than $1 billion in new borrowing on Wednesday.
And on the Cook County level, due to a lack of action by Springfield on the County’s proposed pension legislation among other challenges, the Chicago Tribune reports that Cook County Board President Toni Preckwinkle is proposing a sales tax increase. If there is enough support for the tax hike, it would likely go into effect in 2016.
While these proposals are all preliminary and subject to change, it’s important to note that BOMA/Chicago will be advocating on behalf of the office building industry on the city, county and state levels. There’s no doubt our local and state governments are facing fiscal crises that will require some shared sacrifice, but the commercial building industry should not be expected to shoulder all the burden. Our legislative team will monitor these proposals and voice our support for proposals that will ultimately enhance our local economy and continue to sustain a thriving business environment.