Chicago finances. Alderman John Arena explains his vote in favor of the proposed budget submitted by Mayor Rahm Emanuel...
Chicago's 45ht Ward alderman John Arena has been a leader of the City Council's Progressive Caucus since his election five years ago. Substance photo.There have been fewer topics about which we have heard more at Substance recently than the proposed increase in Chicago property taxes. Although I was in favor of that proposal (as a first step towards more revenue seriousness, and a graduated Illinois income tax), most of our readers and many of my friends were against it. During our discussions, I had to point out over and over that I agreed with people about, for example, recouping the losses on the "toxic swaps" at CPS. Heck, the first studies that exposed those things were done at the table at which I am sitting, in my home. But the fact was, there was never enough power on our side to force the Board of Education to challenge those pricey attacks on CPS revenue. And while I believe that the cover up of all that was because Arne Duncan and David Vitale teamed up to illegally get the Board into the "swaps" during the early aughts, the fact was that as the deals went "bad" for CPS, the Board didn't challenge the deals and paid hundreds of millions of dollars as a result. While it's nice for people to continue to demand some "justice" against those ripoffs, the fact as of November 1, 2015 is that the ripoffs have been ripped off. And we can continue talking about it, but all that talk is Agitprop -- it will not have any influence on legislation or the current situation.
Similarly, the Chicago Teachers Union President Karen Lewis has basically jumped on the "Springfield Bus" with Rahm Emanuel and the Board of Education by refusing to have the CTU's School Finance and Taxation Committee exist for more than a year. And Karen told me, to my face, "You will never be chairman of that committee," even though we all know I know more about CPS finances than any "rank and file" CTU member. As a result of that nastiness (and silliness) CTU is now in the same position vis a vis the claims of CPS that we (the union's people) were back during the 1990s (when Tom Reece led the "it's all on Springfield") litany or in the early 2000s, when Debbie Lynch and Marilyn Stewart devoted the union to the same refrain.
The fact is, the largest percentage of revenue for CPS comes not from "Springfield" but from local property taxes.
The related fact is that because Chicago (and CPS, which is a separate taxing body) refused to raise property taxes, by 2010 (when we made Karen President of CTU and brought into being the "CORE years") Chicago homeowners and other property owners (this reporter included) were paying the lowest property taxes in the greater (six county) Chicago area. Relatives of mine who live in the New Trier district, for example, are paying double (per footage of property) what we are paying on Chicago's northwest side. And so, when Chicago and CTU people go to Springfield, we hear, over and over, "You get what you pay for..." -- based on facts, not the "racism" that some people launch every time someone disagrees with them.
We have a long way to go to dig us out of the holes that were dug during the Daley-Reece - Lynch - Stewart years. But the decision by the City Council on October 28 (same day as the Board of Education meeting) to raise Chicago taxes was necessary. And so I'm sharing here the explanation given by one of Chicago's most progressive aldermen, our 45th Ward alderman John Arena, as to why he voted in favor of the tax increase. The explanation came in John's weekly bulletin to ward residents...
ALDERMAN ARENA'S EXPLANATION FOR HIS VOTE....
My Budget Vote
As most of you are likely aware, the city council this week voted on the 2016 budget and the tax levies payable in 2016 through 2019. I voted for the budget and revenue package.
For decades I have watched as our city fooled itself. We want the services that provide for the common good, but we did not want to pay the bill to cover the cost. So the leaders we elected obliged us. They found a way to pay for everything while hiding the cost.
Many pointed this out to the Daley Administration, but budget after budget, the city borrowed more from the banks and our pension funds. Then we borrowed again to pay the debt. On and on.
We increased benefits, spent borrowed money on flowers and built grand corporate palaces with public TIF grants in the loop while the neighborhoods struggled.
Here is the reality - the bill was due then and continues to be due now. It took Springfield to act by mandating we fund police and fire pensions, and the Illinois Supreme Court to declare the pension benefits sacrosanct under Article XIII of the Illinois Constitution, before we acted.
I voted for the budget package because, as painful as it is, we have to pay the bill, and there is no other viable alternative. We cannot cut our way to $544 million of savings.
In the past 10 years, the city has reduced the total workforce by 14%, more than 6,100 full-time-equivalent workers. 1,400 of those positions have been cut in the last four years.
Yes, there are other efficiencies to implement and cuts that could be made, but none of those come anywhere close to $544 million over four years. I will continue to work for those cuts and efficiencies regardless.
But the painful truth is that the state has mandated that we increase our police and fire pension contributions now, and over the next several years. At the same time, the state has provided few tools for us to raise revenue: fines and fee, sales taxes, and property taxes. All of these options are blunt tools that place a disproportionate burden on the working class, middle class, and seniors.
That is why I authored a resolution committing the Mayor and the City Council to working with Springfield to secure better revenue tools that ensure that corporations and the wealthy are paying their fair share. Those tools include a graduated income tax (which would also apply to commuters), an expanded sales tax on certain services, a financial transaction tax on commodities and derivatives trades, and a luxury sales tax.
That resolution passed the council unanimously, and I plan to hold the Mayor and my colleagues to their commitment. However, any tool Springfield may give us would come in future years. It would not solve the problem we have today.
Today, we have a state-obligated contribution to police and fire pensions. If we failed to make that payment, the state Comptroller is required to withhold money from Chicago to make the payments. That would result in drastic cuts to police and fire protection, city services, and social services already hurt by the state budget impasse.
Additionally, I will join the Mayor in advocating for Springfield to double the homestead exemption on owner-occupied property taxes. If approved, everyone would see a smaller increase, and those with homes valued at under $250,000 in fair market value would see no increase.
You can see how the tax increase might impact you, with or without the exemption expansion, via this document created by the Office of Management and Budget, or on pages 55-58 of the report completed by the Council Office of Financial Analysis.
Should Springfield fail to act, the council is prepared to work through several different rebate options for homeowners. The rebate is a blunt and somewhat cumbersome tool, but it does not require Springfield approval, and all three existing proposals would provide some relief to seniors, lower and middle class homeowners, and those whose homes values have increased exponentially faster than their incomes.
This budget also does not include privatizing 311. To me, it was a somewhat absurd idea that we would privatize what is essentially the front door of your city government, antiquated as it may be. Working with the Office of Management and Budget, we were able to identify roughly $5 million in untapped funds that could be used to bring 311 into the 21st century.
In short, I voted yes on this budget because there was no viable immediate alternative to funding our state-mandated police and fire pension liabilities. However, I will keep fighting for more progressive revenue ideas, a more efficient and accountable city government, and a more just city for all Chicagoans.
This is just the beginning of the conversation of how we get to that goal.
