Aldermen say volume-based garbage fee could fund tax rebate | Chicago Sun-Times

BY FRAN SPIELMAN – CHICAGO SUN-TIMES

Chicago’s $9.50-a-month garbage collection fee should be replaced by a volume-based, “pay-as-you-throw” fee for each container to encourage recycling and bankroll a citywide property tax rebate, aldermen suggested Tuesday.

Tired of waiting for a deadlocked Illinois General Assembly to double the homeowners’ exemption, nine aldermen are moving to take matters into their own hands.

They’re demanding City Council hearings on their fall-back plan for a citywide property tax rebate to shield owner-occupied households whose annual incomes do not exceed $100,000  from an already-approved $588 million property tax increase for police and fire pensions and school construction.

Plan B is similar to the widely-ignored 2010 plan offered by then-Mayor Richard M. Daley. Daley set aside $35 million for rebate checks, but only $2.1 million was distributed because most homeowners didn’t bother to apply.

Budget director Alex Holt has pegged the cost of a citywide rebate at $35 million-to-$40 million. She has challenged aldermen to come up with a funding source.

At a City Hall news conference Tuesday, Ald. Proco Joe Moreno (1st) did just that.

“A pay-as-you-throw system that would encourage recycling. You would get charged for what you actually put in the garbage and not charged for what you actually recycle,” Moreno said.

“The garbage fee was a big pill to swallow. But it’s not the right way to go. Just charging a fee. It doesn’t reduce waste in our landfills. And it doesn’t encourage recycling.”

Ald. James Cappleman (46th) said he just returned from visiting family in the Pacific Northwest, where volume-based garbage fees have been in place for decades.

“There’s no incentive to recycle in the city of Chicago. That’s a joke when other cities across this country have been doing this for decades now. It’s time for Chicago to step up to the plate,” Cappleman said.

“It will hurt. It will hurt everyone….[But] when people do participate in this, people recycle more.”

Molly Poppe, a spokesperson for the city’s Office of Budget and Management, reiterated Emanuel’s pledge not to “burden those who can least afford it” with, what she called a “necessary” property tax increase for police and fire pensions. Poppe did not comment on the pay-as-you-throw suggestion.

“While the City continues to work in Springfield to pass the doubling of the homeowners’ exemption, we are also aware of the logjam and current unwillingness of the Governor to put policy ahead of politics, which is why the Administration is also exploring with City Council balanced property tax rebate proposals that minimize the property tax increase on working- and middle-class families,” Poppe wrote in an emailed statement.

To appease aldermen concerned that the garbage fee could escalate or be a prelude to privatization, Emanuel agreed to cap it at $9.50 per household until after the 2019 election and segregate the revenue generated in an enterprise fund.

Even so, Holt told the Chicago Sun-Times last month that a volume-based garbage fee was still a possibility. She said the Emanuel administration would begin to examine how a volume-based system might work in Chicago later this year after a billing process scheduled to begin in April gets rolling.

“That will require a lot of work and a lot of thinking. I know it works in a lot of communities. But we have some issues we need to work through. Sanitation is the primary issue. We want to make sure we continue to have clean neighborhoods,” Holt said then.

“We also need to think about a fee structure. What size can? How much do you charge? All of those factors need to be considered. In some communities, it’s absolutely more fair. But, we have to look at what a fair structure would look like in Chicago.”

The $588 million property tax hike approved by the City Council in late October will be phased in over a four-year period.

The first increase will total $318 million for police and fire pensions and $45 million for school construction. It will be reflected in second installment bills due to arrive in Chicago mailboxes this summer.

Emanuel had hoped to persuade Gov. Bruce Rauner and the Illinois General Assembly to double the homeowners’ exemption — from $7,000 to $14,000 — so that homes worth less than $250,000 would be held harmless from the record property tax increase.

But, Rauner, who wants to freeze property taxes for two years, has made it clear he strongly opposes Emanuel’s plan. And like the rest of the mayor’s ambitious Springfield agenda, the property tax break has been held hostage by the state budget stalemate over Rauner’s demand for pro-business, anti-union reforms.

On Tuesday, Moreno acknowledged that the homestead exemption is the “best option” because it would be an automatic discount taken off a homeowner’s property tax bill. That’s the opposite of a rebate that would require beleaguered low-income homeowners to lay out the money, apply, and hope to get reimbursed.

But, Moreno said, “That’s a Springfield law that needs to be changed. And I don’t think any of us have any confidence that Springfield is moving forward.”

Noting that Daley’s property tax rebate had paltry participation, Ald. Pat Dowell (3rd) stressed the need for outreach and marketing.

“If we move forward with a rebate program in order to make sure that it is implemented widely and deeply within the city, we’re going to have to spend themoney and the time to make sure that families take advantage of this rebate offer,” Dowell said.

“The last time we did that, it was not widely used, nor was it widely promoted. So, we need to make sure the promotion of this is done at the very beginning and goes to the very heart of our families and our communities.”