For some who have worked for the city their entire lives, the news that the city's credit rating has been lowered yet again hits close to home. They know that in the discourse around balancing the budget, slashing pensions inevitably takes front and center. Yet neither politicians nor the dominant media seem to call into question whether it is the retirements of hardworking people that should be one of the first budget items to get sacrificed when we fall on hard times.
Moody's Investor Service downgraded Chicago's bond credit rating last week to Baa1, giving Chicago the second lowest credit rating of any major city in the country. Detroit has the lowest. This single level downgrade was made all the harsher because it followed an unexpected triple bond level downgrade in 2013. Now, Chicago's bond rating is classified as just three levels above a junk bond.
Water resource management, with impacts sweeping across public health, food production, security, energy, industry, and environmental sustainability, is one of the most consequential economic and societal drivers today.
Legislation currently on Governor Quinn's desk could dramatically alter the way Illinois manages its own water resources. House Bill 1379 would allow Illinois American Water and Aqua Illinois, two of the state's largest private water companies, to expedite acquisitions of municipal water systems and increase customer rates to fund their expansion.
The video's tone suggests a school science filmstrip, kind of quiet in view of the alarming numbers, but this is government, not advocacy. At 2:41, over soothing guitar arpeggios, a pleasant female narrator says, "In most cases, taxpayers outside the TIFs pay more to generate the revenue requested by [their own] taxing districts." TIF critics such as the Reader's Ben Joravsky have hammered relentlessly on this, how TIFs hike your taxes, but it's easy to miss in the video unless you pause.
Orr's press conference was both longer and stronger than the official video. Noting that Chicago's collective TIF districts pull in half as many tax dollars as the City itself, Orr expressed concern that so "many taxpayer dollars are diverted into the Loop," charged that "not enough is being done in the neighborhoods," and that there has been little transparency as to how $5.5 billion in TIF dollars has been spent. He urged Mayor Emanuel and the City Council to declare a TIF surplus this year "as soon as possible" for the benefit of Chicago Public Schools, asking, "How do you explain to the kids in many of these schools that gym, music and art classes are cancelled while profitable businesses downtown ... received 25, 30, 40, 50 million?" Good question.
Overall, the video capably illustrates TIF workings and numbers, whose magnitude needs time to sink in, and Orr deserves credit for shining further light on what is now a gargantuan but opaque component of local governmental taxing and spending.
Protesters blasted the plan for deep budget cuts that would put many schools in untenable situations. Demonstrators collected toilet paper donations as a nod to the fact that these budget cuts would leave many schools stretched so thin they'd be unable to pay for even the most basic of supplies--including janitorial supplies like toilet paper.
Roseland Community Hospital announced today it will keep it doors open with $350,000 in state emergency assistance until a more sustainable solution is reached. These actions come two weeks after 100 staff members were laid off due to a $600,000 shortfall to pay employees. Administrators and aid experts will review a financial plan to salvage the medical center.
This week it was revealed that the state owes Roseland Community Hospital $6 million for its children's behavioral health unit. Hospital administrators have reduced the deficit from $9 million to $5 million. Governor Quinn claims the hospital board has a history of monetary mismanagement which has led them to the current situation. President and CEO Dian Powell who resigned this morning disregarded financial irresponsibility led to the mess and said, "They owe us money." Powell's resignation comes after allegations of unfairly blaming missing payments from the state as a critical factor in the hospital's fiscal demise.
But while House Republican Leader Tom Cross (also a co-author of the bill, along with Rep. Elaine Nekritz) called it "the meat and potatoes of pension reform," it doesn't seem so clear that today's step is actually one in the right direction.
The Illinois pension problem has heated up in a major way over the past several weeks, with Standard & Poor downgrading the state's credit rating back in January and the SEC announcing charges against the state for misleading bond investors regarding the implications of unfunded pension obligations. Some lawmakers have even called for--gasp--skipping the upcoming break from session in order to settle the pension mess.
But while today's bill has the right idea (i.e. something has to happen), it doesn't seem likely that the bill will make it past (1) the Senate or (2) the Supreme Court. Yesterday, the Senate shot down a bill that was similarly far-reaching regarding pension reform. And even if the bill does pass the Senate, as CapitolFax guru Rich Miller put it on Monday, the Nekritz-Cross pension bill "makes almost no pretensions of being constitutional."
Rather than let Mayor Rahm Emanuel's 2012 budget go to a vote without any public input, the City Council "Progressive Caucus" -- aldermen Robert Fioretti (2nd), Roderick Sawyer (6th), Ald. Toni Foulkes (15th), Ricardo Munoz (22nd), Scott Waguespack (32nd), Nicholas Sposato (36th) and John Arena (45th) -- is holding a series of public hearings, beginning tonight.
"A constituent's idea may not be the best idea, that's OK," Ald. Sawyer told CBS 2 Chicago. "There's nothing wrong with that. There's no bad idea. The worst thing about it is having no input."
The first hearings are tonight at 6pm at the Copernicus Center, 5216 W. Lawrence Ave., moderated by the Reader's Mick Dumke. Ald. Carrie Austin (34th) will also hold a public budget hearing tonight at the Woodson Regional Library, 9525 S. Halsted St., also at 6pm.
Additional hearings are scheduled for Oct. 24 at Wells High School, 936 N. Ashland Ave., and Oct. 30 at South Shore International High School, 1955 E. 75th St. Both meetings will begin at 6pm.
Supporters and employees of the Chicago Public Library (CPL) will hand-deliver more than 500 letters tomorrow to the office of Mayor Rahm Emanuel. The letters were written by patrons of the CPL and gathered from SaveChicagoLibraries.com, according to a press release from the American Federation of State, County and Municipal Employees (AFSCME) Council 31.
SaveChicagoLibraries.com was home to a petition against the cuts to library funding, services and staffing that was part of Mayor Emanuel's 2012 Budget. As a result of laying off 181 employees--although AFSCME says the number is 176, the 76 neighborhood branches were closed on Mondays. After outrage from Aldermen and Chicagoans, Mayor Emanuel restored some funding and positions at the CPL. In the aftermath of the situation, Mary Dempsey resigned as the commissioner of the CPL in January and was replaced by Brian Bannon.
The letters that are being delivered will also be read aloud. According to the press release, this is modeled on a prior protest, "Story Time at City Hall."
According to the press release, the laid-off employees could be returned to work at barely $1 million a year.
The protest will occur at 10:15 a.m. tomorrow at City Hall.
A list of city employee reimbursements was posted on the City's data portal over the weekend, accounting for more than $1 million that the city has spent on various employee expenses over the last 13 months.
According to the Tribune, the State Senate has approved a plan that would give tax breaks to two specific companies, although the House of Representatives overwhelmingly rejected the Senate plan. The proposed plan would give incentives to Sears Holdings Corp. and the CME Group Inc., which is the parent company of the Chicago Mercantile Exchange and the Board of Trade, to stay in Illinois.
The companies had threatenedleaving the state over the rising income tax and there have been other stories involving other companies wanting to leave Illinois, including sandwich company Jimmy John's.
The City Council voted today to pass Mayor Emanuel's budget unanimously, 50-0. Chicago News Coop reporters Hunter Clauss and Dan Mihalopoulosdescribed Aldermen's comments as "near worshipful" though not without acknowledging the necessary pain that will come with cuts to front-line workers, library and mental services, and elsewhere.
The budget affects deep cuts, particularly around staffing, to close the $600+ million budget deficit the city faced. The budget came in at $6.3 billion. Aldermen lauded the Mayor for being inclusive in the planning process. While under Mayor Daley unanimous budget votes were often used as evidence that the Council was a mere "rubber stamp" for the Mayor's prerogative, a unanimity does not necessarily entail that. Aldermen seemed to feel like they got their words in during the preparation process, which is arguably much more important than voting against the final budget. Tracking how the budget has changed from its initial form to today would be more instructive; unfortunately that process is not particularly transparent, or at least self-evident.
AFSCME Council 31, which represents thousands of city workers, released a statement upon passage of the budget bemoaning the deep cuts to basic and needed social services:
"We're very disappointed that aldermen have voted to reduce access to libraries, cut mental health services, privatize health clinics and cut hundreds of good jobs. Many aldermen voiced serious concerns about these cuts today. While the vote is over, the work of minimizing these harmful cuts is an ongoing process in which AFSCME and our labor and community allies will be fully engaged.
Yesterday, mental health advocates staged a sit-in outside the Mayor's office that lasted into the evening to protest the cutting of services at about half of the city's mental health facilities:
The second protest will occur at 6pm and will address the proposed privatization of primary care clinics run by the Chicago Department of Public Health (CDPH), closure of mental health clinics in the city and proposed layoffs from the Department of Family and Support Services, according to a press release from AFSCME. The protest will be a candlelight vigil, and participants will speak-out against the planned cuts and closures. AFSCME Council 31, STOP, Mental Health Movement, City employees affected by the cuts and advocates will be participating.
In an attempt to close the Chicago's budget gap, the Chicago Police Department (CPD) announced that three district stations are being considered for closure. Among these stations is the 13th district station at 937 N. Wood St. and the proposed closure of that particular station has prompted residents who live in the district to join together to save the station.
"We have the second lowest number of beat officers in all of the 25 districts and we have a higher crime rate than the 12th district," Shaw said, referring to the district the 13th district would hypothetically be merged with.
As part of Mayor Rahm Emanuel's preliminary 2012 budget [PDF], all Chicago Public Library (CPL) branch locations will have eight hours cut from their schedule. In addition to those hour cuts, the city announced that 284 positions would be cut, approximately a third of the staff for the system.
Among the positions that will be cut are librarians, library clerks and library pages. Pages are part-time employees responsible for shelving and other tasks that keep the library running smoothly.
According to AFSCME Council 31 spokesman Anders Lindall, in addition to the library employees that will be laid off, there will also be 268 vacant positions that will be eliminated.
"Given the expansion of the library system, that capacity is needed," Lindall said.
The CPL has experienced deep cuts in the past two years, starting in 2009 when then Mayor Richard M. Daley laid off more than 100 library employees. The following year, hours were cut in an attempt to get by with a reduced staff.
"What we're seeing from Mayor Emanuel would be an action that would repeat and compound Mayor Daley's mistake," Lindall said.
Well, the title basically says it all, but the IG's office has provided .xls and .csv format versions of the Mayor's proposed budget (appropriations only). It's pretty useful, though it'd be helpful if you could play with the columns a bit to make it a bit easier to read--the description of what things are being appropriated for is way to the right. Check it out here.
According to a press release from the Mayor's office, the reduced hours are expected to save the city $7 million. The press release says, "While many other cities across the country are shuttering libraries in these tough economic times, Chicago will keep all of its libraries open by reducing service hours across the board. Despite reducing the weekly hours, all of the programs and services Chicagoans use at the libraries will remain intact."
This Op-Ed was submitted by Celeste Meiffren, Field Director of Illinois PIRG
No one will argue with the fact that Chicago's budget situation is dire--and has been for some time now. But Mayor Daley masked the drastic fiscal situation in Chicago with year after year of short-term budget gimmicks. The hope now is that, as he puts forth his first budget proposal next week, Mayor Emanuel will learn from his predecessor's mistakes, and avoid a lot of the budget shenanigans that Mayor Daley was known for.
On Tuesday, the Cook County Board of Commissioners will vote on the upcoming budget for the Cook County Health and Hospitals System (CCHHS). Tensions have arisen In the weeks since the CCHHS Board of Directors released their budget and the Cook County Board President Toni Preckwinkle informed the CCHHS Board of Directors that they could not request the required county subsidy because of what is set in the planned County Budget.
As explained in a previous Gapers Block piece examining the Fantus Health Center, the CCHHS receives a county subsidy that helps with their funding. The rest of their funding comes from insurance, Medicaid, Medicare, and patients paying for their treatment.
The current budget that will go before the board would ask for a $283 million subsidy; Preckwinkle has said that the maximum subsidy the CCHHS can receive is $248 million.
The Chicago Inspector General, Joseph Ferguson, released a report this morning with recommendations to the city government as to how it could close its considerable budget deficit.
There is constant harping in this space (e.g., from me) about the need for democratic control of institutions and meaningful public input into public processes. Any more than a little complaining about constant deference to more or less unaccountable technocrats. Make no mistake, though--technocrats and experts--and insular bodies--do have an important role to play. One of the best things about "third party" bodies that are insulated from politics yet still part of government is that they can make findings and issue recommendations free of the type of political considerations that the elected incorporate into everything. (Which is just one of many reasons why the IG's office should be well-funded and protected from meddling).
At the same time, being part of government means the recommendations these bodies make carry more weight, generate more instant attention, and carry some imprimatur of officialdom. So I read the IG's report with some interest late last night and early this morning.
One of the things that will strike you right from the executive summary is that a number of these recommendations could save enormous sums annually with fairly straightforward actions. It takes only another moment before you realize that they would be unpopular either with powerful special interests or with casual voters. Creating a 1% city income tax, for example, would cause a stir, and Mayor Emanuel has not shown the particular style of political courage necessary to try something like that. Similarly, this administration is unlikely to take the common sense step of eliminating some of the legions of appointed supervisors who supervise ever fewer employees but enjoy high salaries and benefits.
By Ferguson's estimation, that latter change could save the city as much as $100mn a year.
The option that generated buzz this morning was transforming Lake Shore Drive into a toll road, which is unfortunate because there are a lot of other common sense suggestions that, in the short term at least, could balance the city's budget without necessarily wreaking havoc among working families, including (from a release):
· Eliminating all Tax Increment Financing Districts to increase tax revenues to the City's general fund by an estimated $100 million annually
· Increasing the work week of all City employees to 40 hours to save approximately $40 million annually
· Create a Commuter Tax estimated to generate $300 million in annual revenues
· Implement Congestion Pricing for vehicular traffic that is estimated to generate an additional annual revenues of $235 million
· Broadening the City's Amusement Tax which would produce an additional $105 million in annual revenues
A lot of this is necessarily unlikely. They would be major, if simple, changes, and Emanuel's entire political career is one of risk-aversion, and the City Council is not really equipped to take any initiative. Still, having a body in government that can put forward options and recommendations like this, to at the very least make the public aware of what is conceivable and possible--and what politicians are unwilling, for their own person political reasons, to do--is essential to good government.
The state has released its annual report on "gaming" (gambling) in Illinois, and there are some surprising statistics in there. The most shocking to me is that Chicagoland is the third largest gambling market in the country, behind Las Vegas and Atlantic City, and really not all that far behind Atlantic City, considering it is the (filthy) East Coast Vegas between Philly and New York.
Most troubling to me personally is the lottery. Granted at least the cash all goes into education (supposedly) but it is still troubling to me that the state will generate $1.2bn just on the instant lottery games.
Mayor Rahm Emanuel is reportedly steaming ahead with plans to unlink the collection of Chicago's residential garbage (for single-family homes, two-flats, and three-flats) from the time-honored ward-by-ward provision of this critical municipal service, a move that may leave some aldermen equally steaming. The potential $60 million savings in play here from collecting garbage along routes that make the most sense for Streets and San, rather than by political boundaries, should make this a no-brainer. So why opposition? Because, while many think of politics as trashy, in Chicago, trash is politics.
The City is currently faced with a $635.7 million deficit for the upcoming budget year. Since the City is cutting programs that seem as if they would be necessary in order to save money, what could possibly be cut, or reduced in funding, to save the budget?
Taste of Chicago is, for those unfamiliar, a massive food festival that occurs for 10 days in Grant Park. In order to save money, in the past five years the Chicago Country Music Festival has been eliminated and merged with the festival, along with several other music festivals. This was the first year that the Chicago Park District ran the festival, as opposed to the Department of Special Events, which merged with the Department of Cultural Affairs. Prior to leaving office, Daley did attempt to privatize Taste of Chicago, but only found one bidder, who wanted to charge admission to the festival.
Here's the important thing: Taste of Chicago is free for admission, which is great if you're there for the music. If you want to eat the food, you have to buy tickets and use those tickets to pay for the food.
Chicago's enormous structural budget deficit, which could reach $700 million next year, is due in part to the cratering of the economy, particularly the free fall of revenue from real estate-related taxes and fees. But it is also due to the symbiotic lack of political will by politicians and political appetite by voters (and interest groups) to make painful decisions to meet the problem. The problem, by the way, is obvious: the city (you and me, the people who live in the city, not the abstract City) made promises to our employees--particularly our public safety employees, cops and firefighters--that our revenue simply cannot meet, and will not be able to meet without tax increases as well as cuts and reforms.
According to the Civic Federation, the city has a $14.6 billion dollar pension liability that is unfunded. To meet this liability, the city can rededicate revenue committed elsewhere to pension funding, raise contributions from current employees and decrease future benefits or eliminate cost of living adjustments, raise taxes, particularly property taxes, or some combination thereof. Solely raising taxes, particularly property taxes, would be politically unpalatable as well as eventually regressive--renters are already beginning to feel a squeeze. If we want to meet our obligations, some reasonable and fair combination of reform of the pension system, rededication of existing revenue (i.e., cuts to services in one place to pay for liabilities), and increasing revenue is necessary.
Yet the focus by the city to date has been almost wholly on "reforming work rules," in other words altering public worker contracts. Such reforms may very well be necessary, but they alone will not put a significant dent in the structural deficit. Mayor Emanuel and his team know full well that even with history's most efficient city government and not a single unionized employee, we would not be able to meet our obligations. Chicago News Coop columnist James Warren astutely observed that this is the strategy is meant to make future potentially unpopular actions--i.e., revenue increases--more palatable. If the Mayor also stokes unwarranted hysteria about thieving public employees, so be it.
The City's budget rests on several revenue streams. In descending order of quantity, the most significant of these are sales taxes, utilities taxes, the "personal property replacement tax" (a convoluted tax that boils down to a corporate income tax), transportation and recreation taxes, and business taxes. Licenses and fees provide a significant chunk, as do--or rather, did--income from parking meters.
Between 2007 and 2010, these revenue streams declined immensely, the biggest being the transaction tax, which is mostly a real estate transaction tax, which declined by over 40%, or $120 million, in that time. To make up these shortfalls, Mayor Daley recklessly privatized city assets. These privatization schemes (and they were schemes) amounted to little more than major borrowing programs that take up-front payments to compensate for revenue shocks. In an interview with the Chicago Tribune, University of Chicago Professor Julie Roin characterized the supposedly bold privatization moves this way,
"Politicians are calling these deals privatizations, but what they really are is secured loans....Whether you collect the revenue and pay it out to creditors or just divert the income stream to begin with is just inconsequential in terms of the financial ramifications of the transactions."
In response to an announcement on July 1 that state employees would not receive the 4 percent raise promised in their contract, the American Federation of State, County and Municipal Employees Council 31 has filed a federal suit saying that the withholding of the wage increases violates federal and state constitution provisions that bar against contract violation. According to WBEZ, Gov. Quinn said on Tuesday that the raises are not being given because the General Assembly did not appropriate the funds for the raises. However, the complaint also points out that Gov. Quinn cut $376 million from the budget through line-item veto and could have done something about the funds for raises. In the past, AFSCME has worked with the state to figure out how to deal with the budget crisis, salaries and employment for state employees.
Meanwhile, in Chicago, the Chicago Board of Education voted unanimously in June to rescind the 4 percent wage increases promised to teachers and staff members in their contracts and it was announced yesterday that CPS principals and assistant principals would also not receive their scheduled pay raise. (CPS principals and assistant principals are not unionized.) The contracts for both groups expire in 2012. With both agencies, there are large budget deficits--$715 million for CPS, $13 billion for the State of Illinois--but both unions have cited flaws with the budgets that are not allowing for their raises.
While AFSCME's lawsuit is waiting in court, CTU, along with Service Employees International Union Local 7 and 73, International Union of Operating Engineers Local 143 and 143b, UNITE HERE Local 1, International Brotherhood of Teamsters Local 700 and International Brotherhood of Electrical Workers Local 143 are waiting to schedule a meeting with the Board of Education to discuss negotiations, according to CTU spokeswoman Liz Brown. The two stories here seem to have a connection.
Should we bring casino gambling to Chicago, as Mayor Emanuel is aggressively pushing for? I've never been able to come to a solid decision on this issue, whether to oppose or not. Casinos are regularly trotted out as solutions to sagging tax revenues, particularly in declining urban areas like Providence, Hartford, Detroit and Cleveland. And while there is some initial surge in revenues, if Providence and Detroit are our glimmering examples of the wonders of casino gaming development, I'm not certain we should be encouraging their development here in Chicago.
Of course, Chicago is much different from Providence and Detroit. Chicago is a major convention city, the third largest city in the country, and the capital of the Midwest. We already draw huge numbers of tourists and conventioneers. Given that, the social ills that accompany casinos may not manifest; and perhaps their main function of merely sucking more money from low-income workers to enrich the casino developers and provide a trickle of extra tax revenue will be substituted for actually making money from tourists.
One thing does seem safe to say: if a casino attracts new tourists, it will make the casino operators very wealthy, which will have an attendant (small) impact on tax revenue. But it will not have any appreciable effect on other businesses. The Boston Federal Reserve Bank released a paper evaluating a proposed casino in Rhode Island and included this:
In general, whether a casino will benefit or harm a local economy hinges on whether the casino is likely to attract tourists to the region. Destination casinos, such as those in Las Vegas, essentially export casino services to tourists, bringing in new dollars to the local economy. A dollar spent by a tourist in a destination casino may fund a local supplier providing food and beverages to the casino, which then spends that income on other goods and services in the local economy, thus multiplying the effect of the first dollar spent. The tourist, however, does not generally spend much in the communities surrounding a resort-style casino. Steve Wynn, a major casino operator, expressed this point to local businessmen in Bridgeport which also considered a casino, in the 1990s: "There is no reason on earth for any of you to expect for more than a second that just because there are people here, they're going to run into your restaurants and stores just because we build this building [casino] here." Therefore, the main ancillary benefits are from indirect spending in the local economy spurred by tourists to a casino, rather than direct spending by tourists at local restaurants or shops.
In other words, the economic impact is strictly trickle down, and rests on some pretty big assumptions. So, in that way it is certainly a risk.
I have to believe however that Chicago given its existing reputation and infrastructure and steady convention business would be able to benefit from an appropriate casino (i.e., something a little classy). Most cities that pursue casino development do so to bring in the tourists; Chicago's casino would be another way for our extant tourists to spend money. If--if--we know that most of the casino's customers would be tourists, it's a good idea. If not, it's just another massive trickle-down project done out of terror of spooking away fragile mega-corporations who flee at the scent of any taxes that prompt a fair share.
(A Chicago Coalition for the Homeless protest in December 2009)
Advocates with the Chicago Coalition for the Homeless are taking 100 people to Springfield Wednesday morning, joining other citizens in a fight to prevent the further slashing of state-funded services that support homeless residents.
Budget cuts have been particularly brutal to homeless services, which benefit those who are continuing to have fewer and fewer options.
According to an e-mail organizer Hannah Willage sent out, funding for state-funded homeless programs were cut 41 percent this year, and they could be cut by up to 68 percent in the coming budget year.
Homeless prevention grants helped 2,322 households in 2010, 89% of whom were able to avoid becoming homeless. That same year, state funding was cut by $8.6 million, and another $1 million is to be cut next year, leaving just $1.4 million in the prevention grant program.
Staying true to his pre-election stance, Mark Kirk this morning, in practically his first official act as Illinois Senator, joined a solid bloc of Republicans and a handful of primarily blue-dog Democrats in voting against cloture of debate on a Senate bill to extend tax cuts to American families making less than $250,000 a year. Kirk then also voted against a softened version which would have extended cuts to those making $1 million or less a year. Both votes garnered 53-vote majorities, but under the "faux filibuster" rules of the Senate, a majority vote was insufficient to move the measures forward.
It's important, as Illinoisans and Americans look at these votes, to understand the background and context. Republicans are attempting to frame the Democratic move as a "tax increase" but that is -- how to say? -- well, I'll call it a lie. In order to understand that, let's review how we got here.
This editorial was submitted by Valerie F. Leonard
The Chicago Public Schools has been under Mayoral control for the past 16 years. Under the Mayor's leadership we have had School Reform, Renaissance 2010 which called for school closings and reopening them as charter schools, and attempts to qualify for the national Race for the Top (which seems to have been modeled after the local Renaissance 2010 initiative). The changing of the guard in City Hall could have serious implications for the direction of education in Chicago.
The Chicago Tribune ran an interesting article regarding the fact that the State's standardized tests have been made increasingly simpler over the last 5 years. ("Students Can Pass ISAT With More Wrong Answers"). It should be noted that the article does not mention the fact that Chicago Public Schools lobbied the State to simplify the test 5 years ago.
At the same time, the Chicago Tribune's Editorial Board is urging the next Mayor to continue the course that has been laid by the current Mayor, and suggested that the new Mayor keep the current CPS CEO on board to continue the reforms that have been made. ("Reform on the Ropes?").
Last week's public budget hearings took on a bit of a different hue, what with the knowledge that these would be the last of the Daley Era. At the brand new Westinghouse High School in Garfield Park on Friday evening, Mayor Daley brought out 26 members of his cabinet to sit and listen to the public-at-large voice their concerns in regards to the upcoming budget for 2011. While the budget may have been the reason for the public meetings, the forum actually rarely addressed the meat of the budget itself, and instead provided different individuals and interest blocs a chance to present their grievances directly to the powers that be. In reality, the meetings are simply a larger version of an open night at the local Alderman's office, but with a grander spotlight and a strangely off-putting feel that the whole event might burst into a populist pep rally. (No doubt contributed to by the shiny newness of Westinghouse's gymnasium where the hearings took place.)
The majority of comments were reserved for individual appeals on personal issues, of which Daley and Co. did a fine job of showing how bureaucracy in numbers can be a great mitigator to address such matters, even if results are stunted. Nearly every City Department was in full display at the hearings, and not just being represented in proxy by one of Daley's cabinet chiefs, but situated with full information booths and staffers to provide guidance. Certain speakers vented about highly specific issues- a particular vacant lot, for example- and after their allotted time to speak was up, a handler or two would whisk them away from the microphone, lead them to the back of the gymnasium and seemingly begin the work of at least giving the appearance of starting the fixing process. In all, the hearings are function of good government, in allowing people to express the daily issues they confront as Chicago citizens that obviously have an emotional effect upon them. Issues are emotional. Budgets, however, are not, and it is the job of the budget to harness the emotionality of issues into concrete plans to try and remedy things as best as possible.
State Representative John Fritchey, who will be giving up his seat in the state house representing the 11th District to replace Forrest Claypool on the Cook County Board of Commissioners (assuming he wins in November), is teaming up with the Chicago Teachers Union and the Raise Your Hand Coalition to push comprehensive reform of the tax increment financing, or TIF, program. The reforms could end the exploitation of TIFs by the Mayor's office as a cudgel, and restore significant funds to taxing bodies--particularly the schools--that have seen billions of dollars disappear over the last couple decades.
Tax increment financing was created by state statute in the 1970s as a way to provide incentives to develop blighted areas. TIF areas are designated by municipalities; within those areas, property tax assessments are frozen at the level they were at when the zone was designated. The land is still assessed and the taxes on the increase are still collected, but they are diverted into a site-specific fund rather than being paid to the various taxing bodies that typically collect them. Those bodies are, primarily, school districts, counties, the municipality itself, and sanitation and fire districts, among others. The idea is that without the incentive, that tax money would never have been raised in the first place, and so those taxing bodies are not actually losing anything.
Once upon a time there were three school districts, two of the districts were right next to each other and one was a few miles away and they were all informed that they could get new federal funding to help them retain teachers.
But once the school districts got to see the numbers they got three very different stories. The three districts were the Aurora East, Oswego and Yorkville school districts, all were consolidated districts so they taught K-12. The federal funding numbers come from the Beacon News.
But lets look at some of the numbers. First the amount that the new funding will provide to each district.
Governance by sloganeering results in things like this:
The private parking meter company that runs the metered street parking system in Chicago expects to reap at least $11.6 billion in revenues over the 75-year term of its lease deal with the city, according to a new report from Bloomberg News.
The Chicago News Cooperative recently reported that the 218 percent rate hike introduced since the parking privatization has barely reduced meter use, resulting in better-than-expected profits for the investors. The new profit estimate goes well beyond the earnings projected last year in documents uncovered by the Chicago News Cooperative, the first time that the internal financial projections of the privately held partnerships were disclosed.
Did you know profit-seeking organizations can do everything much better than government? It's a truism because lots of people say it. If you inject the profit motive into something, then it will work better. Every time. We don't need to study it. Just know that it's true because it's true.
Mayor Daley's reckless pursuit of "public-private partnerships" based solely on his wafer-thin rationale that the private sector can do everything better than government, has essentially cost the next three generations of Chicagoans billions of dollars both in lost revenue and jacked-up parking costs. At least, we should hope that is his sole motivation; because we could be less charitable and say that shameful impuissance also contributed. Mayor Daley is so terrified of making a "hard" (also obvious) decision regarding raising revenue that he would sell off city assets in a panic. This the "CEO Mayor" that BusinessWeek fell in love with?
[This piece was submitted by freelance journalist Shane Shifflett, photos by Andrew Huff]
Millions of federal dollars have been invested in miles of fiber optics in Chicago and more than 1,000 surveillance cameras to create one of America's most sophisticated crime-fighting networks. There is, however, a problem: No one knows how well it actually works.
Nancy La Vigne, the director of the Criminal Justice Policy Center at the Urban Institute, and her team of researchers want to rectify this.
Their conclusion, which has yet to be publicly released, seems unique among the small number of similar studies conducted in other U.S. cities.
"The use of cameras is cost beneficial," La Vigne said.
To reach their conclusion, researchers compared the number and types of crimes in Humboldt Park and West Garfield Park to other neighborhoods that were statistically similar but without cameras. They discovered that for every $1 spent on cameras, the city saves $2 by preventing crimes, she said. By reducing the burden on the legal system society saves money, La Vigne said.
An Op-Ed Submitted by Rev. Dr. Clare Butterfield and Herman Brewer
Some experts and policymakers believe our country could do more to prevent problems before they occur. In particular, instead of postponing our response to the nation's budget problems, we should use our resources today to prevent them from becoming worse. New reports show that current patterns in U.S. spending and revenue can't be continued in the long run. Decisions must be made about the goals we want our country to meet and how we raise the money to meet them; there are steps we can take today to prevent fiscal problems from becoming bigger and more costly to fix. The solutions we come up with will be important to all Americans.
Ben Joravsky and Mick Dumke, the Readers' star political reporters, had an important piece in the Reader a couple weeks back analyzing the TIF budgets and how exactly the money is dispersed. Much of what they found reinforced the suspicion that a lopsided amount of TIF dollars go to pet projects in non-needy neighborhoods, thus flouting the purpose of the state TIF statute. Interestingly, some of what they found actually overturned some conventional criticisms of TIFs, for example that it was weighted towards the clout-heavy (as an example, Finance Committee Chair and light tenor Ed Burke's 14th Ward received comparatively little from TIF funds).
Here's one important thing about their piece: it revealed no scandal.
In the larger sense of good versus bad government and policy, it certainly could spark outrage. But in the traditional sense of public corruption or betrayal of public trust or even rank hypocrisy, the Reader piece didn't serve the narrative of corrupt politicians swindling the public. Instead, it very methodically made a case that the current policy regime was ill-serving constituents, and did it in a sober (though entertaining) way. Yet even with that sober tone, it was enough to get people's cackles up.
That is the type of reporting that is threatened by the collapse of journalism. Yet, at the same time, the dailies aren't really known for this type of research and journalism--the type that doesn't look for a scandal as a hook, but rather just tries to tell the story of how the city works fundamentally, and make a case for fundamental change. That's not advocacy, that's just stripping the system down, rather than dressing politicians down. It's an important distinction.
At the beginning of the year I wrote a piece, Getting Past Daley, that tried to make the case that focusing on political personalities is beside the point, that the corruption that causes such outrage when it's reported in the Trib or Sun-Times is a result of material conditions and powerful institutions, not the whims of quasi-criminal elites. When we began organizing against the Olympics, we were disheartened by how much people wanted to focus on the Mayor as the problem, when the problem is clearly deeper than him.
Joravsky and Dumke in their analysis of the TIF program actually bust some myths about how the TIF money is spent--it isn't going to the clouted necessarily, it is money luring money, not petty local political clout dominating the process. By breaking down the mechanics of the process, Joravsky and Dumke create outrage out of picayune politics, not sensationalized scandal:
About a quarter of all TIF spending, or $358 million, went to a single ward, the Second, which includes much of the Loop and gentrified areas on the near south and west sides. That's more than the bottom 35 wards got altogether.
Approximately $267 million more was spent in the 27th and 42nd wards, which include the Gold Coast and near west and near north sides. Together the three downtown wards received about 43 cents of every TIF dollar spent between 2004 and 2008.
Portions of the Second, 27th, and 42nd wards are in fact struggling economically--but those areas are largely missing out too. Some aren't covered by TIF districts; in other places the TIF districts aren't collecting much money. For example, the 27th Ward reaches into parts of Garfield Park where the landscape is dominated by empty factories and vacant lots, but little TIF money has been spent there.
When we get analysis like this--and it's reasonable to disagree with the analysis itself--then we can start to really figure out how to attack the problem, including the politicians we reflexively blame for everything, despite a rotating cast of characters falling into the same pattern over and over, endlessly repeating.
A slate for union leadership run by the Caucus of Rank and File Educators (CORE) has defeated the incumbent United Progressive Caucus (UPC) leadership in a run-off election, and decisively. Approximately 60% of the teachers voting in the run-off (of a total of about 20,000 votes) chose CORE over the incumbents. CORE also swept all of the "functional Vice President" positions with the exception of one, the VP for "PSRPs", the clerical and support staff in the schools. The mandate for change is clear.
CORE began only two years ago as a caucus of teachers determined to push the union to take a more aggressive and adversarial posture on the issues of privatization, school closures, and to push the union to work more closely with community and parents organizations as a way to protect and improve public schools. CORE's leadership has been especially critical of Ron Huberman and Mayor Daley, indicating that the go-along, get-along posture of the CTU over the last decade will be coming to an end.
CORE forced a run-off after nearly out-polling the UPC in the first round of voting two weeks ago. Despite a contentious election, the other slates--the ProActive Chicago Teachers and the Coalition for a Strong, Democratic Union--quickly endorsed CORE and campaigned among their supporters to ensure an insurgent victory in the run-off. President-Elect Karen Lewis addressed the media this morning at King High School in Bronzeville. The leadership slate is rounded out by Jesse Sharkey (Vice President), Michael Brunson (Recording Secretary) and Kristine Mayle (financial secretary). More video to come.
Perhaps the Chicago Teacher's Union needs to take a page out of New York City's book, where teachers will have to forego projected two percent pay raises to save some 4,400 teachers their jobs, Mayor Michael Bloomberg announced Wednesday.
The layoffs would, according to the mayor, "devastate the school system and erase much of the great progress we've made," reports the AP.
Is the same not true of the CPS? In Chicago, the budget deficit may force the layoff of 2,700 teachers to provide for a four percent pay raise negotiated in the CTU's contract in 2007. These layoffs and other budgetary cuts will lead to class sizes of up to 35 kids and the loss of junior varsity sports and other extracurricular activities.
And yet the CTU doesn't seem to be willing to make compromises. In March, the CTU released a statement in which President Marilyn Stewart emphasized her commitment to keeping the contract consistent.
"Parents and students in Chicago should have both: small class sizes with quality educational programs and teachers who are paid a fair salary for the hard work they do," she said.
It's true that teachers often go underpaid and overworked, but is this a case of Chicago teachers wanting to have their cake and eat it too? The future for the CPS is likely to be either cuts in the classroom or cuts in raises, because the Illinois legislature doesn't look like it's going to be figuring out a solution any time soon.
The Chicago Public School system announced today that it has posted and will continually update the CPS Employee Position File, which records the names, positions, and salaries of all CPS employees.
Coming the day after a thousand-strong teacher rally at City Hall to protest CPS inaction on school budget cuts (where chants of "Hey hey, ho ho, Huberman has got to go" could be heard down the block), one has to wonder at the timing of this release. But this is undoubtedly not quite what those teachers were looking for in terms of "action," while the CPS is looking at a potentially $1.2 billion deficit for 2011.
According to a press release on the CPS website, CEO Ron Huberman considers this "an example of CPS making public information readily and easily available to the public" and evidence of their "ongoing commitment to transparency."
This may be part of it, and District 299's Alexander Russo muses that the publication of salaries will likely add some weight to CPS' call for salary freezes and its plea for funding, but the 834-page document is barely navigable. It certainly doesn't offer indisputable proof that CPS employees should forego their scheduled pay raises, but then again, who really knows what a Director of New Construction does, and if their job is worth $136,000?
Chicago teachers were out en masse yesterday, protesting against teacher layoffs and proposed expansion of class sizes outside of city hall.
Photos by Isaac Silver
A crowd of several thousand teachers were visibly fed up with the local and national discourse blaming them for Chicago's and the U.S.'s education crises. The most frequent target of their ire was Chicago Public Schools CEO Ron Huberman, who appeared on signs and at the end of chants calling for his departure from CPS.
Well, you won't find these in City Payments' database. The Chicago News Cooperative's Dan Mihalopolous brings us the story of $769m in undisclosed payments by the City of Chicago to vendors. That's just in one year. Yeah.
Dan is a real journalist, so I'm going to add some Mad Libs-y color commentary to this quote:
Mayor Richard M. Daley's hilarious assertions that he has run a transparent administration suffered a fresh blow following the release of a new one-freaking-year audit report showing that the city neglected to disclose nearly $769 goddamn million in payments made with taxpayer money.
The new unfreakingbelievable report from Inspector General Joseph Ferguson states that "direct voucher" payments, in which the city makes payments for goods and services that it obtains outside the normal quotecompetitiveunquote bidding process, weren't made public even after the city vowed to open up all contracts and payments made to companies for goods and services to public view through the Department of Procurement Services at www.cityofchicago.org.
You can catch the IG's full report below the fold.
Advocates of publicly-owned transit were over the moon with the announcement by the Obama administration that there would be serious investment in high-speed rail as part of the American Reinvestment and Recovery Act. Communities likely to be served by the high speed rail had tentatively begun community information efforts. Transit advocates like the Metropolitan Planning Council (MPC) have begun undertaking serious study of the benefits of the program as planned.
Following the much-ballyhooed $8 billion that the government allotted to states as part of the stimulus bill, it doesn't look like there's much more federal money after that. In 2010, Congress authorized $2.5 billion for HSR projects -- and for 2011, it's a mere $1 billion. And given the shambles condition of most states' budgets, it's highly unlikely that state governments will be able to write big checks to HSR projects in the next 2 to 5 years.
SEIU Health Care Illinois-Indiana, an SEIU "megalocal" that emerged after the fusion of Locals 4, 880, and 20, is taking to the airwaves to remind people of the costs of cutting programs like home care:
The ad's message portends just how grievous the cuts to social services will be if the public attitude towards public spending--vilified by anti-public zealots for generations--aren't improved. More than 50,000 senior citizens in Illinois are cared for by home care workers, allowing them to stay out of (expensive) retirement homes and maintain some of the dignity of living in their own home.
Probably the most difficult type of organizing is what's known as "coalition politics", pulling together existing organizations to move a grassroots program. The conflicting ideologies and tactics of different groups, differentials in resources, and often hard to manage personalities make coalition politics immensely frustrating. This makes the continued existence--and, in fact, progress--of the Responsible Budget Coalition particularly surprising.
It is also eye-opening. There is often a lazy false equivalence between left and right "special interest groups" when it comes to public spending; anti-tax zealots like to stoke resentment of "public employee unions" as a means to pressure legislators to slash public spending. Take a look at the RBC's roster of organizations and consider if these "special interests" are equivalent to large profit seeking firms that fund the "cut to the bone" think tanks and political funds:
The residents of Chicago's 49th ward will vote on Saturday to determine what to use $3.1 million of city money on. The far north side ward was covered with fliers urging residents to vote in what is the first attempt in Chicago to use a democratic process for determining how to use infrastructure funds.
Each ward is given a budget to use for infrastructure, and the money is usually spent by the Alderman's office on permanent items such as street lights and pavement repairs. However Alderman Joe Moore in the far north side ward decided to open the process to the community and to let residents vote on proposals created in open committees.
The Mess Hall, an artist space with anarchist tendencies has a display that highlights the various proposals on the ballot. The space has had extended hours and has been packed with residents hoping to find out about the proposals.
Some of the proposals include: street lights, repaved streets, police surveillance cameras, bike lanes, historical markers, dog parks, decorative and educational bike racks and free wi-fi.
Apparent gubernatorial candidate and poor black child Dan Proft faced off with Hank Scheff of the American Federation of State, County, and Municipal Employees (AFSCME) Council 31 to talk about Quinn's reform. While I agree with Scheff generally, both he and Proft are very smart guys and come from a sincere (non-partisan) place. That makes this very worth a watch:
Progress Illinois has a close look at the pension system reforms that Democrats quickly passed through both houses of the Assembly in the last twenty four hours:
In the blink of an eye yesterday, the General Assembly passed (by a wide margin) a historic overhaul of Illinois' public employee pension system. Facing the possibility that the state's bond rating might be downgraded next month when the state borrows about $1 billion to fund a portion of the capital construction plan, the Democratic leadership whipped into action, tossing together legislation that whizzed through the Statehouse in less than 12 hours.
It's important to remember that these cuts do not effect current employees; opening those contracts (the benefits are outlined here) would likely violate the state's constitution. The changes only apply to new hires in 13 of the state's systems. So let's review what the bill does and how much money the Pension Modernization Task Force estimates the changes will save between 2010 and 2045:
Follow the link for a thorough analysis by PI's Adam Doster.