Fioretti proposes commuter tax to fix pension problem - | KTBC Fox 7 | News, Weather, Sports

Ald. Fioretti proposes commuter tax to fix state`s pension problem

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CHICAGO (FOX 32 News) -

Should Chicago tax the paychecks of those who work in the city but live elsewhere? A potential candidate for mayor proposed that Friday.

Alderman Bob Fioretti said revenue from an income tax on commuters could bail out Chicago's public employee pension funds.

Fioretti opposes the pension reform deal Mayor Emanuel announced last with several dozen public employee unions, calling the deal unfair, because it would reduce future cost-of-living raises for retired government workers.

"I think we gotta look at the state for an income tax that exempts people who live in the City of Chicago. I think a financial transaction tax. And, of course, the casino revenues ought to be directed to it," Fioretti said.

Fioretti, a close ally of the city's biggest public employee unions, is contemplating a potential challenge to Rahm Emanuel in next winter's mayoral election.

A spokeswoman for Emanuel told FOX 32 News: "The mayor would not support establishing a city income tax."

Emanuel's previously rejected proposals for a financial transaction tax on the Board of Trade and other big downtown exchanges. The exchanges have said repeatedly they would consider leaving town if such a tax were imposed.

The notion of a city income tax was denounced by an official of the libertarian-leaning Illinois Policy Institute: "Detroit imposed a commuter income tax. It was one more nail in their coffin. It would drive jobs out of Chicago. Look, we already had 200,000 people leave (Chicago) in the last decade."

Fioretti also favors abolishing tax increment finance districts, using the so-called TIF money to bolster public employee pension funds.

"Since 1986, the TIFs have siphoned off $5.5 billion off of our general revenue funds," said Fioretti.

Former Mayor Daley, in particular, argued that TIF funds were a critical tool he used to remake the face of Chicago and bolster its economy during his 22 years as the city's chief executive. Mayor Emanuel has made the program more transparent, while also insisting it's important for economic development.

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