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Council Hiking Chicago Phone Fees To Fund Pension Systems

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CHICAGO (CBS) – Aldermen have approved a plan to hike the city’s monthly 911 surcharge on phone bills by 56 percent to help shore up the city’s pension funds, and avoid a property tax hike before next year’s elections.

WBBM Newsradio’s John Cody reports the City Council approved a plan to increase the 911 fee for landlines and wireless phones from $2.50 a month per line to $3.90, starting Sept. 1.The tax on prepaid wireless phones would jump from 7 percent to 9 percent on Oct. 1.

Mayor Rahm Emanuel proposed the phone tax hike to raise $10 million this year and $40 million next year for two of the city’s four underfunded pension systems, in lieu of a property tax hike next year.

Originally, the mayor’s pension reform plan called for raising property taxes by $50 million a year for five years starting in 2016, but Gov. Pat Quinn balked at that plan at a time he was seeking to extend a temporary income tax hike set to expire at the end of the year.

After the mayor agreed not to seek a property tax hike next year, Quinn agreed to sign legislation increasing city employees’ contributions to the Municipal Employees and Laborers pension funds.

Though the revenue from the 911 fee will go towards funding the city’s 911 center, it will free up $50 million in revenue from other sources that will be diverted to pensions.

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