Chicago Mayor Rahm Emanuel and Cook County board Commissioner Jesus "Chuy" Garcia will square off in April mayoral run-off.

CHICAGO — Chicago Mayor Rahm Emanuel faces a runoff in his bid for reelection after failing to win a majority in a contest where he was attacked on city finances, school closures, violent crime, and business ties.

Emanuel, who is seeking a second term at the helm of the third-biggest U.S. city, garnered 45.4% of the votes with nearly all precincts reporting in an election that saw near record low voter turnout of 34%. Jesus "Chuy" Garcia, a Cook County board commissioner, finished second among five candidates to qualify for a runoff with 33.9% of the vote.

The next term poses daunting challenges for the victor with a $550 million spike due next year in public safety pensions and investors questioning the city's solvency. The school system which is controlled by the mayor is facing a $1 billion deficit.

The city was stung during Emanuel's term with a series of credit downgrades, including two rare triple-notch downgrades from Fitch Ratings and Moody's Investors Service, primarily over the city's mammoth pension obligations of $19 billion. The Emanuel administration has stressed it was among the "legacy" debts he inherited and is attempting to fix.

Emanuel, 55, sought to highlight during the campaign the city's longer school day, a free community college education for students with strong grades, and the relocation of more than two dozen corporations to Chicago.

He touted investments in infrastructure, the absence of property, gas, or sales tax hikes in his budgets, and fiscal strides in reducing a structural deficit. He portrayed himself as the best candidate to tackle daunting pension challenges that lie ahead.

"We have come a long way and we have a little bit further to go. This is the first step in a real important journey in our city," Emanuel told a crowd of supporters on election night. President Obama in a recent visit to Chicago lauded Emanuel, who resigned from Congress to serve as his first chief of staff.

Garcia, who previously served in the City Council and state General Assembly, portrayed himself as an independent alternative who would best represent the populace in all neighborhoods. Garcia labeled Emanuel "Mayor One Percent," accusing the incumbent of being beholden to business and special interests and taking note of the mayor's campaign fund, flush with more than $16 million.

Garcia also attacked the city's debt load and borrowing practices during debates and capitalized on controversies during Emanuel's tenure including a teacher's strike, the closure of 50 schools, and city violence.

Garcia, 58, backs swapping to an elected school board. The current board is appointed by the mayor. Garcia called for the hiring of 1,000 police officers, but didn't say how the city could afford it.

"They said we didn't have any money while they spent millions attacking us," Garcia told his supporters. "Well, we're still standing. We're still running, and we're gonna win."

The results were in sharp contrast to Emanuel's first race in which he easily won a majority of 55% in a contest to replace former Mayor Richard M. Daley, who was retiring after six terms in office.

Over the last four years, Emanuel has trimmed the city's reliance on one-shot revenues to balance the books and halted the use of reserves Daley favored in his final years. Emanuel won state legislative passage of an overhaul for two of its pension funds - the laborers' and municipal employees. The reforms are being challenged in the courts by unions, employees, and retirees.

The city must tackle the $550 million spike next year in its pension payment for public safety pension under a prior state mandate and it's unclear whether the city will win legislative relief from the hike or reforms to the pension plans from state lawmakers.

Emanuel decided against addressing the spike in his $7.3 billion 2015 budget and has not said how will cover the costs absent state action.

Gov. Bruce Rauner's proposed fiscal 2016 budget would cut $125 million in annual income tax aid to the city.

The city's GO bonds are rated A-minus by Fitch Ratings, Baa1 by Moody's Investors Service, and A-plus by Standard & Poor's. All assign a negative outlook.

The city pays steep interest rate penalties to borrow by selling general obligation debt as investors worry over the city's solvency. Any further cut by Moody's would potentially trigger swap termination events. The city notified investors in a recent offering statement of fact, saying "further reductions in the city's general obligation debt credit rating could have significant adverse effects on the city's financial condition, including its ability to borrow and service its debt obligations."

The city's school system also is grappling with rising pension costs and faces a $1 billion deficit in its next budget.

Chicago's municipal elections are conducted on a non-partisan basis. If no one candidate for mayor, treasurer, clerk, or alderman reaches a majority, a runoff between the two top vote-getters is held. The upcoming April 7 mayoral runoff is a first for Chicago since it established non-partisan elections in 1995.

Other candidates in the field were businessman Willie Wilson, who received 10.6%, City Council member Robert "Bob" Fioretti who received 7.4%, and perennial candidate William "Dock" Walls, who garnered 2.8%.

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