Aldermen told mayor wants new 7-percent tax on water-sewer bills

Mayor Rahm Emanuel will slap a 7-percent tax on combined water-and-sewer bills to save Chicago's largest city employee pension fund, aldermen were told Wednesday.

The new utility tax is expected to raise at least $230 million over five years, putting the Municipal Employee Pension Fund, with $18.6 billion in unfunded liabilities, on the road to financial health.

The Emanuel administration is convinced that Chicago's sweeping home-rule power allows the mayor to impose the new utility tax without legislative approval.

Last year, Emanuel persuaded a reluctant city council to raise property taxes by $588 million for police and fire pensions and school construction.

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