Water for Pensions

Sept. 28, 2016

About the author: Kate Ferguson, editor-in-chief, [email protected]

In September, Chicago news outlets were abuzz with Mayor Rahm Emanuel’s latest scheme to fund pensions for city workers: He proposed a tax on city water and sewer service that would raise bills by about 30% over the next four years. 

According to a September 2016 article in the Chicago Tribune, Emanuel “portrayed [the tax] as his latest tough decision to secure Chicago’s financial future.” The article delved into Chicago’s financial troubles, citing city aldermen’s opinions on the tax and whether they think it will be an effective pension-funding mechanism. (At the time I wrote this, the city council had not yet voted on the proposal.) 

Many times, I have shared my opinion that it is easy to undervalue water in the U.S.—most people just turn on the tap and clean, safe drinking water flows out. This is in large part due to the fact that municipally supplied water is cheap. According to the Tribune, the average annual water and sewer bill in Chicago is $684. By the end of Emanuel’s proposed four-year tax plan, the average homeowner would see an increase of about $226 per year—paying approximately $2.50 for every 1,000 gal of water used. Consider the fact that we pay that much or more for just 1 gal of gas (at least here in Chicago!).

So I’m not necessarily advocating against a tax or rate increase for water and sewer service—if we intend to repair or replace aging distribution systems to ensure that water arrives safely and without contamination at taps, rates inevitably will have to increase. (One could certainly insert an argument here in favor of implementing a final barrier water treatment strategy instead, but I can only fit so much on this page, so I’ll save that for another day. Suffice to say, that approach also would require funds and potential rate or tax increases.)

That brings me to some key terms that were missing from the Tribune’s nearly 2,000-word article: “water quality” and “lead pipe.” In the wake of the Flint, Mich., lead contamination crisis, the city of Chicago began testing for—and finding—lead in public schools and on “higher-risk streets.” Emanuel positioned his proposed tax increase as a “tough decision” for Chicago’s financial future—but what about the tough decisions for the city’s water future? According to an August 2016 Tribune article, Emanuel “pushed to increase water rates to finance a more aggressive effort to replace leaky water mains” when he first took office. More than 440 miles of main have been replaced so far—but oftentimes the new mains simply were connected back to old lead service lines.

I think Chicagoans could get behind a tax or rate increase if the money were being spent to protect them from lead and other waterborne contaminants. Using water and sewer bills to fund pensions, however, will be a much harder sell.  

About the Author

Kate Ferguson