'Corporate welfare' to sports owner and charter school promoter Jerry Reinsdorf... Chicago Teachers Union study shows how tax breaks to United Center Bulls, White Sox drain money from schools
Ongoing research by the Chicago Teachers Union continues to expose the manipulation of tax breaks on behalf of the wealthiest people in Chicago. On January 4, 2013, the CTU released a report entitled "Nothing but the net..." outlining how the tax breaks given by city leaders to Jerry Reinsdorf and the Chicago Bulls/White Sox organization have taken money from schools and other public services. Part of Reinsdorf's denigration of Chicago's real public schools and unionized public schools teachers came three years ago, when the Chicago Board of Education gave the former Cregier high school building to the Noble Network of Charter Schools for use as its "Bulls" campus.
The "Bulls" campus of Noble Network of Charter Schools, like more than 50 other charter schools across Chicago, is located in a public school building (the former Cregier Occupational High School building) that is leased to the charter school for $1 per year. Like the other public school buildings that have been converted for the use of the charter schools, "Bulls" campus of Noble Street was rehabilitated at public expense prior to its occupation by the charter school.
The URL for the full report is: http://www.ctunet.com/quest-center/research/position-papers/nothing-but-net-profits-reinsdorf-property-taxes-and-corporate-school-reform
In addition to its annual defrauding of the city's public schools budget by dumping its low scoring students every January back into the real public schools system, Noble charter schools are non-union and aggressively oppose the unionization of their teachers and other staff. Noble Network CEO Michael Milkie, a former Chicago public schools teacher (Wells High School) has been promoted by successive city administrations (both Mayor Richard M. Daley and Mayor Rahm Emanuel) and by each public schools administration since the beginning of the 21st Century.
In a summary of the content of the 30-page study, the CTU website (www.ctunet.com) reports as follows:
"The city of Chicago has been good to Jerry Reinsdorf. Support from a large fan base has helped Reinsdorf transform the Bulls and White Sox into two of the most successful sports franchises in North America, with a combined value of $1.2 billion and over $70 million in total annual operating income as of 2012.1 According to the mainstream media, Reinsdorf has given back to Chicagoans by establishing himself as, in the words of the Tribune, one of the �leading philanthropists� in the professional sports business.2 Indeed, Reinsdorf has made several high- profile charitable contributions in recent decades. Perhaps most notably, he gave $4.5 million to help construct a new Boys & Girls Club on the Near West Side in 1995, and followed up in 1998 with a $3.5 million donation to after-school instruction programs run by Chicago Public Schools.3 More recently, Reinsdorf has directed his �philanthropic� efforts toward supporting the charter school movement in Chicago. In 2009, he donated $2 million to help launch Bulls College Prep, a Near West Side high school that belongs to the Noble Network of Chicago charter schools.4
"Commendable? It may seem that way. But while these acts of unselfishness make for good public relations, they are an altruistic sleight of hand. What the mainstream media fails to mention is that Reinsdorf�s seemingly generous and very visible donations are a drop in the bucket compared to the tens of millions of dollars in property tax relief that he and fellow owners of the United Center have received since 1994. New data obtained by the Chicago Teachers Union from the Cook County Board of Review reveals that, based on special legislation passed in 1989 by the state of Illinois, Reinsdorf and the owners of the Chicago Blackhawks saved at least $30 million on property taxes for the United Center between 2002 and 2007 alone! At the same time that he makes relatively small contributions to a local charter school� one with a history of pushing out the most vulnerable students�Reinsdorf benefits from an unpublicized system of corporate welfare that shifts the burden of paying for public schools onto ordinary taxpayers and ultimately diverts resources away from the city�s most vulnerable students.5
"By now, many Chicagoans are familiar with the anti-union tactics of charter school advocates like Penny Pritzker and Bruce Rauner. However, these high-profile union critics are part of a much larger network of real estate and private equity moguls who have created a toxic environment for public education.6 Less vocal members of this network, like Reinsdorf, also profit from lucrative kickbacks and political favors at the same time that they support a growing charter movement that threatens to privatize public education in Chicago under the guise of increasing �accountability.� This report offers a case study in why calls for increased accountability need to be directed at the corporate profiteers who make it impossible to equitably fund local public education, instead of at hard-working and dedicated teachers."
The CTU press release issued January 4, 2012, follows:
CTU Study Shows United Center Owners Shortchange Chicago Schoolchildren CHICAGO�Based on analysis of data obtained from the Cook County Board of Review, the Chicago Teachers Union (CTU) has unearthed yet another example of a Chicago �fat cat� lining their pockets at the expense of taxpayers and schoolchildren. The report released today comes at a time when the school district plans to close more than 100 neighborhood schools for alleged underutilization while simultaneously replacing them with new charter operations in the same communities.
�Nothing But Net Profit: Jerry Reinsdorf, Property Tax Relief, and Corporate School Reform on Chicago�s Near West Side,� a year-long investigation into the destabilization of the West Side of Chicago, provides a detailed analysis of the how billionaire sports mogul gamed the property tax system in order to maximize his own profits.
�It is important for people to understand how business really gets done in this city and how the richest people in Chicago do not pay their fair share of taxes,� said CTU President Karen GJ Lewis. �When asked, these individuals will say they support students, but if they really care about kids, they should pay their fair share and politicians should stop shifting the burden to small businesses and homeowners.�
�We could eradicate the effects of poverty on our students and our schools could afford the necessary wrap-around services and resources needed to give our kids the education they deserve,� Lewis said.
New data obtained by CTU from the Cook County Board of Review reveals that, based on special legislation passed in 1989 by the state of Illinois, Jerry Reinsdorf and the owners of the Chicago Blackhawks saved at least $30 million on property taxes for the United Center between 2002 and 2007. At the same time that Reinsdorf makes contributions to a local charter school�one with a history of pushing out the most vulnerable students�he benefits from an unpublicized system of corporate welfare that shifts the burden of paying for public schools onto ordinary taxpayers and ultimately diverts resources away from the city�s most vulnerable students.[i]
By now, many Chicagoans are familiar with the anti-union tactics of charter school advocates like Penny Pritzker and Bruce Rauner. However, these high-profile union critics are part of a much larger network of real estate and private equity moguls who have created a toxic environment for public education.[ii] Less vocal members of this network, like Reinsdorf, also profit from lucrative kickbacks and political favors at the same time they support a growing charter movement that threatens to privatize public education in Chicago under the guise of increasing �accountability.�
�If education reformers are genuinely concerned about budget shortfalls, they would do well to focus on the real source of the problem: a regressive tax system that puts the interests of the 1 percent over ordinary Chicagoans,� said report author Sean Dinces.
�Nothing But Net Profit,� offers a case study in why calls for increased accountability need to be directed at the corporate profiteers who make it impossible to equitably fund local public education, instead of at hard-working and dedicated teachers.
The investigation also revealed:
-- Reinsdorf, owner of the Chicago Bulls, Chicago White Sox and one of the many local elites who have helped bankroll the Noble Network of charter schools, pocketed at least $30 million in property tax breaks on the United Center between 2002 and 2007 as a result of a little-known piece of 1989 legislation passed by the Illinois General Assembly.
-- Adding years of property tax abatement at the United Center to the public moneys used to build U.S. Cellular Field amounts to hundreds of millions in taxpayer-funded aid to Reinsdorf and his associates. The contributions that Reinsdorf has made to Chicago Public Schools and community organizations on the Near West Side pales in comparison to the hundreds of millions in taxpayer-funded aid he has received through property tax abatement at the United Center and U.S. Cellular Field.
-- The tax breaks have been in place since the United Center opened and are set to expire in 2016. This means that the data from the Board of Review, which only covers 2002 to 2007, represents just a fraction of corporate giveaways received by Reinsdorf and his associates at the United Center.
-- These corporate giveaways, which are par for the course among Chicago�s charter school advocates, and especially those behind the Noble Network of Charter Schools, gut the tax base of the city. In doing so, they shift the burden of paying for precious public resources like neighborhood schools onto ordinary taxpayers and ultimately undercut the district�s ability to adequately fund public education in Chicago.
-- The CTU analysis suggests that, at most, Reinsdorf and his associates are paying only a quarter of what they would owe in property taxes under normal assessment procedures. If this sounds unfair, that�s because it is. When do ordinary Chicagoans get to pay only a quarter of what they owe?
-- Instead of blaming teachers and praising the alleged �efficiency� of charters and other market-based reforms, the city should be taking aim at local fat cats who are suffocating public education in Chicago by refusing to pay their fair share.
The Chicago Teachers Union press release came from Communications coordinator StephanieGadlin@ctulocal1.com, January 4, 2013 312/329-6250