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From: The TIF Illumination Project at the CivicLab
Date: Sun, 9/6/2015 10:18 AM
To: Brian;
Subject:Brian - Chicago is NOT broke - far from it
| | | | | WE ARE NOT BROKE.
FUNDING THE CITY WE DESERVE
September 6, 2015
Brian -
Chicago is not broke.
We are all familiar with the pronouncements from then Mayor Daley and now Mayor Emanuel that Chicago is on a fiscal life line and that we are broke.
We have been told repeatedly that Chicago iss broke and therefore we need to cut services, privatize public assets and continue a tradition of unscrutinized deals that scam the public over and over again.
Chicagoans have been asked and are being asked to put up with a whole host of hurtful public policies because they do not have the complete story of Chicago's financial health and options.
We also seem to be out of ideas on how to bring new resources to the city. After withering criticism of his faltering bid to get the 2016 Olympics became hard to ignore a visibly peeved Mayor Daley said "People can discuss this, but this is the best economic engine we have going. I have nothing else up my sleeve."
Mayor Emanuel recently hosted a series of 2016 budget town meetings. The bad news was delivered by Budget Director Alex Holt and Chief Financial Officer Carole Brown.
They said we are facing a 2016 operating budget deficit of $232.6 million.
Almost at the same time the Mayor announced he would be seeking a property tax hike of between $450 million to $550 million!
I would like to offer a different narrative.
Chicago is not broke. We have plenty of civic imagination here.
I’d like to offer three pots of money available to the city that would wipe out that forecast deficit and replace it with a surplus.
Here’s a way to fund the Chicago we deserve. A city where ALL her citizens flourish – not just the same set of prosperous people, insiders and the mayor’s campaign contributors.
BUCKET 1 – MONEY WE DID NOT HAVE TO SPEND
 This includes money lost through corruption, theft and patronage. This includes contracts given without bid to insiders at inflated prices. This includes ghost payrollers and triple-dippers who are on the public dime in multiple jobs at the same time and former employees who now collect multiple and inflated pensions.
This includes money wasted through endless judgments against the city –usually for police misconduct – the biggest expense here being the cost of prosecuting and repairing the torture cases against Police Commander John Burge. This abuse and expense is still continuing.
This includes unnecessary fees to consultants and financial institutions – such as the much reviled toxic credit swaps that the Chicago Board of Education is staggering under. One report estimated the total payments by the City of Chicago and the Chicago Public Schools of payments and termination fees was
$1.2 billion through August of 2014!
It’s hard to go back in time to – say – 1990 or 2000 – and estimate what the cost savings could’ve been had we ELIMINATED all this waste. It’s equally difficult to come up with an ANNUAL revenue number that would fall to our bottom line if all PRESENT corruption and waste were eliminated.
But I’m going to make a rough estimate here and say Bucket 1 would give Chicago $1 billion in new or released revenue annually.
BUCKET 2 – MONEY THAT IS HIDDEN FROM US
 This one is easy for me to articulate and estimate. Tax Increment Financing districts hold the most hidden public money in Chicago on an annual basis.
The TIF Illumination Project has analyzed all of Chicago’s 2014 TIF Annual Reports. Our work shows that in 2014 Chicago’s TIFs extracted $426 million from property owners. At the end of 2014 there was $1.44 billion in property tax dollars sitting in TIF accounts.
Cancel the TIFs and return all TIF funds sitting in bank accounts to the units of government that would have received those funds in the first place.
This would result in a one-time cash infusion of $1.4 billion to local government, with $784 million going to Chicago’s public schools.
BUCKET 3 – MONEY THAT WE ARE NOT COLLECTING
 This bucket is perhaps the most controversial and would be the most contested. We are leaving literally BILLIONS of dollars on the table in Chicago (and Illinois) every year.
The biggest source of potential revenue is a financial transaction tax levied on contracts at Chicago’s exchanges. Even asking traders to pay $1 per contract would bring in enormous revenues that would be split between the state, the county and the city. This small fee would not even be noticed by the traders. Eleven European nations already have such a tax.
One study calculates the annual total from a LaSalle Street Tax to be as high as $12 billion for Illinois overall, with $2 billion of that for Chicago annually!
A key ingredient in this fiscal menu is a progressive income tax for Illinois. Such a tax would take in billions more in revenue annually, with much more revenue sharing coming to Chicago. There have been a number of proposals to move Illinois out of the company of the most regressive and unfairly taxing states in America and each proposal would have a different net gain for Chicago.
Let’s say that a modestly progressive income tax for the state would net Chicago $500 million more annually.
That’s $2.5 billion in new revenue for Chicago from just these two sources.
I think that’s a good start. There are other, more creative, more radical ideas for saving money and generating revenue for Chicago – but for now, let’s total up what we could get from deploying our three buckets.
I think I just identified $4.9 billion in revenues for the city of Chicago.
What would YOU do with a first year harvest of almost $5 billion and then an annual increase of about $4 billion in NEW revenue for – say – the next ten years? What would you start or build to make Chicago the city we deserve?
My friends and neighbors, Chicago is most definitely NOT broke.
Mr. Mayor, do NOT ask the taxpayers to dig deeper until all these proposals have been discussed, evaluated and acted on.
Thomas Tresser
Public Defender
Let's get this message out! Please forward this email widely. If you are connected to a house of worship, a civic group, a block club or business group - book a presentation of "We Are Not Broke! Funding the City We Deserve" and let's get these ideas on the table and completely fleshed out for public debate! Contact us for details.
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