By now, we all know the numbers. $543 million in new property taxes to make the firefighters and police pensions whole. $45 million for “modernizing” public school buildings. $9.50 a month for garbage collection. Millions and millions more in cloud taxes, permit fees, boot taxes – all for a grand total, the Tribune says – of about $755 million in new taxes – all at one time.
But other numbers were surprising, too. Fifteen aldermen voted against the Mayor’s tax plan, but that meant 35 voted Aye.
WBEZ City Hall reporter Lauren Chooljian is our guest this week. It wasn’t easy for the Mayor to round up those votes, she tells us, but he made it happen by presenting a different, more approachable face to the City Council members.
“People have also been putting it in the context of, “well you saw that sweater ad,'” she tells us. “I mean that thing will not die… Well, he promised us that he needed to listen more. And I’m telling you, Aldermen will come up to you on the street or while they’re waiting for a cab or whatever and they will say ‘you know actually he will hold the elevator for me and let me come in and say what do you think about the budget? Has it been going well for you? What are your issues with it?”
There were actual concession made to key aldermen, as far as reporters can determine. For example, Aldermen got the Mayor to agree to a reporting mechanism for the pubic schools indicating how and why they spend the money from the $45 million schools modernization fund. They want to be sure, for example, that the money is used in the desperately underfunded neighborhood schools and not in charters or contract schools.
“I will say that aldermen who usually go right up against him will say, ‘Yes, he’s invited me into his office.’ I mean a couple of aldermen stood up yesterday, mind you aldermen who were close to him like Danny Solis and said, ‘Thank you for texting me and calling me and being there this whole budget process.’ Other aldermen who are usually Mayoral allies have said to me, ‘If I have a question I call Alex Holt, the Budget Director.’ I mean that’s a great line of communication to have if you’re trying to wade through the thousands of pages of this budget. Pat O’Connor, the same thing, said, ‘I’ve never seen a budget process go this way.’
But there were no celebrations when the budget passed.
Despite the massive tax increases, they still don’t make budgets whole for pensions or at CPS, the CTA and a number of other agencies. That’s because the State still hasn’t formulated a budget, and doesn’t seem likely to in the immediate future. The CTA, for example, needs the 20% of its budget it normally gets from the state, without which it will run out of money well before the end of the fiscal year. So some aldermen were advocating an even bigger tax bite to cover what the state’s not sending.
“I remember Aldermen Leslie Hairston this week was saying there’s no way that I could come back to these people,” Chooljian tells us. “Might as well just deal it all in one. Even Ed Burke said that last week.”
Ultimately, they decided to wait.
But what’s Plan B?
“It’s so interesting to watch them kind of walk this tightrope,” she says, “of aldermen saying – ‘Well we need to come up with a plan B.’ But then at the same time the Mayor’s office and those same aldermen are like ‘Well now wait a minute. We can’t come up with a plan B that’s solid enough that Springfield is going to say, well we have a lot of other things to worry about, so why are we going to worry about you?’
At the center of this swirling uncertainty is Governor Rauner. Chooljian tells us that the Mayor has said he has regular conversations with his friend the Governor. So what do they talk about?
“Mayor Emanuel always says, and I think the governor would say this too, that those are private conversations and to preserve that trust they’re not allowed to tell us what they talk about,’ she says. “But he does say relatively frequently that they do speak on weekends. So it’s not that they’re not talking, and the Mayor always says directionally Rauner moves in the same direction that Emanuel does on these things. I am not quite clear on the meaning of that, but that’s his argument.”
The pressure on some Aldermen was intense. Black Caucus member David Moore said the negative comments from his constituents against the garbage tax were so powerful that he voted against the tax package. Most of his colleagues, however, voted in favor.
The constituent concerns varied by geography.
“Some of these North side aldermen like Michelle Smith are really worried about the long-time homeowners who are 70 and 80 years old and they live in Lincoln Park and their property values have skyrocketed,” she explains. “They got their triannual assessments; they’re crazy. So now they’re worried about an additional property tax hike. And so behind the scenes, which was passed yesterday, they are working on a resolution that would rebate or protect, give some sort of relief to homeowners like that.”
The Mother of All Tax Increases wasn’t all that happened yesterday.
“We had 80 high schools in 2004 and now we have 140. And in one of those high schools there are just thirteen 9th graders,’ Chooljian asserts. But despite declining enrollment, climbing numbers of largely under-enrolled high schools, the CPS Board yesterday authorized the construction of two additional charter schools.
And while critics may say that the Chicago Bears don’t always play their football games all that well, their owners know how to play politics nicely. By waiting until the last minute and opposing the Lucas Museum, the team was able, in a very short time, to get major concessions from the City and Park District about naming rights, commercial signage and lots of other things it had wanted for years, in exchange for letting Lucas take one of its parking lots. There was no public debate about the matter before it passed.
And finally, there’s one thing that didn’t get put into the budget. That would be the privatization of the 311 center. Chooljian says it was a suspicious proposal right from the start.
“I mean Aldermen were coming up to me from the minute that got proposed and most of them were saying ‘I cannot stand for that,’ and then the rest of them were saying, ‘Well don’t worry, you’re not going to have to because this is something that’s just been tossed out there.” it was one of “Rahm’s throwaways,” an Alderman told her.
“And basically what they were saying is this is something that the Mayor is putting out there so that when people are upset about it he can take it back and say, “You know what, I’ve listened to you.” And it’s funny because Alderman would come up to me in confidence and say, “Well maybe the trash thing will be (too)…”
In 1995, the Chicago Public Schools were in crisis. In 1975, the Chicago Public Schools were in crisis. Also in 2005, and probably in 1955 and 1935.
So it’s useful to sit down with a journalist who’s been covering the schools for more than 30 years to ask – are Chicago’s schools actually better today than they used to be?
Linda Lenz was the Sun-Times’ education reporter for years before leaving in 1990 to found Catalyst-Chicago, a news-magazine devoted exclusively to coverage of the Chicago education scene.
Her answer? It depends.
CPS schools, she says, “serve some kids well. Other kids aren’t served well for a whole variety of reasons. They tend to be the most disadvantaged. And if you look at what Chicago Public Schools have done it’s been an awful lot of two steps forward and one step back. So one thing that’s been frustrating for me in covering this has just seeing how decisions have been made without regard to research, solid research or how schools work…”
During Lenz’s tenure there have been two major sweeps of reform. The first, initiated by Harold Washington, was his effort to decentralize the system and create Local School Councils.
“The definition of reform is what you don’t have right now,” she explains. “And what you had back then was a calcified school system where outsiders couldn’t get in, you know non-profit organizations, parents. And so yeah, it pushed forward the decentralization of the school system and there’s some evidence, hard research to show that that it served to improve a lot of schools.”
But decade later, Richard M. Daley was frustrated with the schools, and asked the Legislature for complete control over the system.
“The ’95 legislation returning unfettered control to the Mayor made a lot of changes that enabled the school board to put its hands on more money,” says Lenz.
But as we now know, that money they put their hands on was money that was supposed to be used for pensions and other important matters.
“Things that the accountants had put in the don’t-touch category – some of the pension money and stuff like that. So Gary Chico and Paul Vallas – they were able to start the recentralization which you would expect a lot of people to protest about,” she explains. Nevertheless, what protest there was didn’t have much effect. “With getting rid of red ink in the budget, a 4-year teachers’ contract, new programs, they came up with that at the beginning and it just sort of shut everybody up because there’s something there for everyone…also the economy was different. But there was no new money that came. They just kind of freed stuff up and the economy has made the difference.”
Lenz says there was little protest from the unions, either.
“Everybody was at the party. You know if they opposed it they did it behind closed doors and very quietly. Now, that makes no sense. I mean in theory they objected to that, but at that time actually I think it was like $65-million that was shifted over from pension taxes to general operating. And the system could sort of afford it at that time because the pension fund was much more well funded…but you know then with the economy going south it couldn’t afford that. It’s sort of a fie on all of us for not having caught that, you know. We journalists should have been paying closer attention…”
Our conversation turns to charters, which are claiming great success for their educational model, but Lenz says the charters have a huge advantage right from the start. “The kids who go into the charter schools and the Noble Streets tend to be better prepared than the kids who go into the neighborhood schools – which have become schools of last resort,” she explains.
“You can argue that they have been successful. But the idea of charter schools is that you are supposed to – one of several things, save money, well you haven’t saved money, come up with innovations and spread them – haven’t seen that much. Then sort of prompt competition that would make the other schools better. Well none of those things have happened, and so I am frustrated that there is no plan and what do you do about the kids who are left to the schools of last resort, in these huge buildings?”
But it’s not just charters the are straining the CPS budgets.
“And then you know they’ve started these schools for kids who have dropped out and come back in, and it’s online and they basically put in very little time. There’s very little teacher interaction. I mean that’s verging on being a sham.”
In the past week, Noble Network has announced plans to add many more charter schools in Chicago, despite the chronic under-enrollment in the city’s traditional schools. Noble is currently educating 10% of Chicago’s high schoolers, and with new federal money it just received it plans to advance to 15% in the next few years.
We ask Linda Lenz : are we on the path to the total privatization of Chicago’s high schools?
“I don’t think so,” she responds. “This City is so politically well organized, grassroots organizations who oppose the charter schools and they now have gotten to the aldermen who oppose the charter schools. Certainly the Chicago Teachers Union which has shown its organizing power opposes them, so I just think the politics run against it becoming a total privatization. Now there are very wealthy people who our Mayor plays around with and they are coming in to support these schools, but you know while they have money for a campaign ultimately they don’t have that many votes, you know.”
Lenz says Mayor Emanuel’s accomplishments in the education realm so far have been mixed. But there have been serious mis-steps.
“I think folks like mayors, they want to move quickly,” she tells us. “They don’t want to deal with the messy, sometimes drawn-out process of moving the schools forward. And certainly Mayor Emanuel found that out when he first got into office and just rushed in to do these reforms that everybody wanted, and I presume he thought everybody would applaud them, but he didn’t pay attention to how it gets done.”
Ben Joravsky’s our guest this week, And when Ben’s at the table the discussion has to include criticism of the TIF program. As it happens, Budget Director Alex Holt was our guest last week, and Ben had some reactions to several points Holt made on the show about, yes, the TIF program.
The reason mayors like TIF, the Reader columnist asserts, is that you can raise lots of money without having to ask all the taxpayers for their approval.
“It’s a surcharge on the amount they tell you you’re going to pay,” he claims. “And it’s not a frivolous trivial amount as she was sort of suggesting on your show. But last year when it was low it was $360-million (that was raised through the various TIF districts). If the City Council were to raise property taxes by $360-million with a direct vote there would be hand-wringing, there would be discussions.”
But the TIF program, he asserts, removes this significant amount of money each year from the total taxes collected, diverting the money to mayoral-controlled projects. And the shortfall, after these funds are deducted from the overall tax collection, must be made up by all of us. It’s a way, he says, “that you can raise the money without anybody…without a hearing, without public debate, without hand-wringing. You could pretend as though it’s not a tax hike at all.”
Alex Holt told us last week that the TIF program has directed hundreds of millions into desperately-needed capital programs, and has allowed the schools, parks and other agencies to repair buildings and facilities for which no other funding would exist.
“The honest discussion,” Joravsky insists, “is the government costs more money than we pretend it costs, and as a result we’re going to have to raise your property taxes to pay for expenses that in the old days were covered by the federal government…So if you want to have the honest discussion that you’re raising, which is that we desperately need this $360-million, this $400-million, this $500-million, whatever it is to pay the bills that the federal government is no longer paying, if you want to make that case to the property tax payers, don’t hide behind the program; don’t hide behind a hidden tax and pretend it doesn’t exist…”
We ask Joravsky for his reaction to the Barbara Byrd-Bennet guilty plea, and her admission that she sought to skim almost $2 million from the no-bid principal-training program awarded to her old associates at SUPES. Joravsky says he’s dismayed that so many people are taken aback more by her foolhardiness in putting the affair into emails than by her corruption.
“So yeah, that’s the typical Chicago reaction,” he says. “It is, so how could she be so stupid? I mean – the idea, how could she be so corrupt? Everybody assumes there’s a certain amount of corruptness.”
But Joravsky says the question today isn’t really about Byrd-Bennett. It’s about Mayor Emanuel. Was he told about the no-bid contract, the size of which was unprecedented at least for this Board? Did he authorize the CPS Board to sign off on it? Did he know that the action would be hidden in the Omnibus bill, which is a clearing-house action for all of the less significant actions of the board, thereby hiding it from public discussion?
“Somehow or other somebody in a position of power had to decide between, do I go with the advisors who are saying this looks bad, or do I go with Barbara Byrd Bennett who is insisting that ‘my credibility is on the line,'” he explains. “There’s only one person in Chicago who has the authority to tell all those advisors, “No, you’re going with Barbara Byrd Bennett,” and that’s the Mayor. So I don’t know if it will ever come out exactly how he said it, or if he put it in an e-mail or if he put it in a text, but it’s pretty obvious to any Chicagoan all the people who say how dumb she is for putting it in writing are the same people who are saying right now – of course the Mayor knew, and of course the Mayor signed on to it – because probably from a political calculation that $20-million contract was the money he had to spend; he had to commit to keep her aboard so that she could be the public face on his school closings.”
During the show we make reference to Sarah Karp’s reporting on the SUPES contract that led to the investigations that brought Byrd-Bennett down. You can watch her here explaining the whole process in one of her many appearances on Chicago Newsroom.
(In case you’re not in the mood for 40-minutes of conversation about Tax Increment Financing, we’ve provided times so that you can jump to that particular topic.)
Chicago’s budget director Alex Holt drops in to talk TIFs.
Holt argues that TIFs have funded a large number of capital improvements throughout the city – improvements that couldn’t have been made without the extra dollars the program brings in. This is especially true, she says, for CPS, which has caps on its property tax levy and is therefore unable to raise the funds it so desperately needs to replace roofs, windows, boilers and bathrooms – as well as build annexes and, in some cases, new schools.
We address the criticism that TIFs are actually hidden taxes. She argues they are not, but agrees, when gazing into our bathtub analogy, that we do all pay a little extra money each year in taxes to replace the funds drawn away by TIFs. But it’s a very, very small amount, she argues, asserting that the TIFs multiply the effect of that small contribution to build and remodel el stops, encourage companies to build factories and stores, and improve conditions in myriad public buildings. (about 10:30)
Alex Holt gives a clear-throated justification for the LaSalle Central TIF, which was created years before she went to work for the budget office. LaSalle wasn’t blighted 20 years ago, she argues, but it was slipping. Lots of second-rate office space was going unrepaired. The streetscape was sub-par. And the street was in danger of losing its appeal as a first-class Midwest destination for big capital. That’s not true today, she argues, and she stresses that TIFs played a role in the revival. (22:16)
We ask Holt to address the persistent criticism that Chicago’s schools have been robbed of hundreds of millions of dollars over the past 20 years as money was siphoned into TIFs. It wasn’t, she says, and you can see her response at about 24:50.
Finally, we talk about the 1.4 billion dollars that is currently parked in banks, money the critics have argued shouldn’t have been collected in the first place and should be “returned” to the agencies from which it was taken. It wasn’t “taken”, she argues, since CPS gets every penny it requests in taxes each year, by law. (31:30)
And she says that 1.3b of the 1.4 is encumbered for existing projects, many of which stretch over 4 or 5 years. Reminded that her office has been excoriated by Tom Tresser and the TIF Illumination Project for not responding to their requests (and FOIAs) for detailed lists of the projects, she responded that all the data is now publicly available.
The Chicago Sun-Times made an astounding announcement a few weeks ago – that they were laying off their Managing Editor, and would put out the paper and manage their digital presence without one. That editor was Craig Newman, and he’s our guest on this week’s Chicago Newsroom. The staff will carry on, he predicts. “They adapt so well to chaos and divisiveness,” he tells us.
But Newman points out that day-to-day editors are slowly being eliminated at news organizations, and it’s probably a sign of things to come. We talk about what the definition of a “news organization” even is today, because readers of the Sun-Times and any other publication can get their news almost anywhere. “…this is going to be a poor example because the current iteration of the Sun-Times Web site is a mess, but you can find the things you care about easily on the internet. You can find the things you care about by a curated twitter feed. You have your Facebook friends that are telling you things that they think are important or sharing back information,” he explains.
It’s imposible to have one of these conversations without discussing the economic model, if one even exists, for newspapering. He admits that he himself finds the printed paper less valuable, since he’s already read so much of it 6, 8 or 12 hours earlier. So are we finally at a point where we can accurately predict the end of the printed product? For some papers, it’ll be soon, he asserts. “It is hugely expensive to produce and it’s hugely expensive to maintain, but that’s still where the revenue structure is at, so you’re stuck with that for a bit. That said, 5 years from now it’s hard to make an argument that we’ll still be picking up any of these.”
There are still advertisers in the printed product, and that’s what’s keeping print alive, he explains. “I think fundamentally the advertising structure is completely invalid now but we’re still holding on to it because there’s a couple of pennies to rub together. If you look through the Sun-Times, Trib or whatever you’re going to find a couple of high end ads upfront and then it’s just a steep drop-off after that.”
We talk at length about the value of a newsroom. A place where smart people gather in a classic, chaotic scene to hash out what they collectively believe to be the important news of the day. That’s still valuable, he says, but much of that process has been democratized now. Each individual can make an assessment of the day’s news and make an independent judgement about what’s newsworthy. And as the country becomes more polarized the idea of a theoretically impartial newsroom has been severely challenged.
“It has to have a place of value within peoples’ minds,” he asserts. “and I think over the last five, maybe ten years the value of a backed news organization has lost a lot of value. People don’t want to believe that there’s accuracy. They want to believe conspiracy theories. They want to believe that there’s some sort of an agenda, the left or the right wing media. And there are some examples of that, to be clear.”
Newman has a new position with Techweek, but he tells us that, while this is a journalism-related job, it’s the first time in 25 years that he hasn’t worked in a daily news environment. Does he feel remorse?
“… so this position being gone I think hurts. I would like to tell myself just for my own ego that me being gone probably hurts them a little bit. I did know a lot about the inner workings, as you might imagine, and was something of a digital architect there.”
Here’s the presidential matchup for 2016. It’s Marco Rubio vs. Joe Biden. Who says so? Beyond the Beltway’s Bruce DuMont and Chicago Magazine’s Carol Felsenthal.
Bruce DuMont said last week that Biden’s appearance on Stephen Colbert’s new show was ‘the most significant appearance by a politician on US television ever.” And that’s from the founder of the Museum of Broadcast Communications. Why so significant?
“Most people mourn and go through the grief process alone,” he explains. “so the fact that he went on the show to me is yet another or another example that he is thinking seriously and is about to announce that he is going to run, so that’s one interpretation. I thought the fact that he was able to reveal himself unlike any candidate, and he also had a very sympathetic interviewer that was talking to him and sharing some of the sympathy and some of the problems that he has had in his career, so I thought it was a remarkable interview.”
In addition, Biden has been vey prominently adjacent to the pope during his Washington visit, greeting him as he landed, seated behind him during the joint session and attending the mass on Wednesday afternoon. DuMont sees a pattern.
“That is probably another example of Biden being in the right place and the President is aware that they want to get the right photo ops with Joe Biden'” he tells us.
DuMont believes that Obama has decided to go with Biden.
“I have always thought that one of the reasons why Joe Biden has been pushed out there and I think encouraged by the Obama administration, is I can’t believe there aren’t people in the United States government right now high up in justice and FBI they know exactly what’s on those (server) tapes, and they know that what’s on there is maybe not criminally incriminating, but it is politically dynamite. And I think that’s why they want Joe Biden because they know Hillary’s going down; it’s just a matter of time.”
“And remember what Obama said,” adds Felsenthal, “and his Press Secretary relayed this to the public, that the smartest decision he ever made in politics was selecting Joe Biden as Vice President.”
“But you don’t have your Press Secretary go out there,” DuMont concludes, “unless you really want to underscore that message. And so I think the fingerprints of the Obama administration on the draft Biden movement I think are very very thick.”
“Hillary’s people are beyond worried about this,” asserts Felsenthal.” So they are beginning to try to criticize Biden …Hillary did it. She did the other day, she came out and talked about Joe Biden when he was in the Senate and she was in the Senate as not being helpful on the bankruptcy bill.”
But if Biden wants it, he’s not going to have an easy time capturing it, both agree.
“He basically saved Clarence Thomas (during his nomination hearing) and I don’t think anyone is ever going to forget that,” DuMont claims. “They’re going to have to be reminded of it, but he had a very significant role and certainly liberals know that.”
“When you see those clips from those hearings it’s not going to work to his advantage and he didn’t put on witnesses, so some people blame him for Clarence Thomas” adds Felsenthal.
And there’s more. Our pundits think the full ticket could be emerging already.
“Last night Elizabeth Warren was on Stephen Colbert. She was knocking it out of the park,” DuMont states. “I mean she says she’s not running for President of the United States. That was probably the more powerful insofar as just getting out there and making her case. I mean she was going at 78 RPM.”
So if she doesn’t run for president, what about Biden/Warren?
“Well, that would definitely propel him I think past Hillary if he were to announce that,” DuMont opines.
And to be sure we understand that Hillary’s candidacy is troubled, DuMont discusses her record as Secretary of State.
“…all one really has to do is look at where we are in the world right now. Look at the advancement of Russia. Look at the aggressiveness of Russia. Look at Syria. Look at the Syrian refugees. Look at what’s happening in Libya. Look at all the areas where she was allegedly involved. What happened on her watch has led to exactly what we have today, and if anyone wants to argue that that’s a successful record I don’t know how you do it. And a way to stop a democrat in any conversation is say ‘all right she was a great Secretary of State. What did she do?’ They have no answer for that.”
Turning to State politics, things are getting ugly in the Democratic effort to unseat Mark Kirk. Carol Felsenthal wrote about it last month in Chicago Magazine.
“…a Washington group, the Democratic Senatorial Campaign Commission, came out early and endorsed Tammy Duckworth and ignored the moves that Andrea Zopp was making to run against her in the primary,” Felsenthal explains. “Andrea Zopp is African American. Tammy Duckworth her father was Caucasian; her mother was from Thailand, I believe. And she’s suburban. She lives in Schaumburg. She has a national reputation, even somewhat of an international reputation because she was so gravely injured …while piloting a helicopter in Iraq. She worked in the Obama administration. Andrea Zopp was head of the Urban League here but she is unknown. As soon as the DSCC made this ham-handed move because in 35 years they had not endorsed in a primary in Illinois, then that got the Reverend Jackson and it got John Rogers and it got Melody Hobson and Leon Finney and all of these prominent black leaders in Chicago to say, ‘She’s being disrespected, why are they doing that?’ So it galvanized groups of people in her favor, and I think in the end Tammy will win, but Andrea Zopp is going to have a shot at it that she wouldn’t have had otherwise.”
You can’t have a political discussion with two veteran political animals without talking Rahm Emanuel. His nearly $600 million in proposed new taxes is a massive political gamble. But he might be the right guy to do it, according to Felsenthal, since she’s sure he won’t run again.
“He doesn’t want to run again,” she claims. “I have never thought he wanted to run. I follow him so closely. He’s a two-term mayor. He’s not Rich Daley or Richard J. Daley who thought there was no better job in the universe than being Mayor of Chicago. He’s got other things on his mind and when he tells these aldermen to think of the larger picture, be heroes, Rahm Emanuel is a wealthy man and when he leaves office as Mayor his wealth is going to grow exponentially.”
“I think it is an act of courage,” adds DuMont.”He inherited an absolute mess from an alleged political messiah who destroyed the financial stability of this City and he bit the bullet. He barely got through a re-election effort and once I think he got through that re-election he decided I have no other option but to do exactly what needs to be done. The people are not going to like it. I’m not worried if I’m going to get re-elected again, but I’m going to right the financial stability of this City. That takes courage.”
Are you getting comfortable with the the notion that your taxes are about to go up as they never have in your lifetime? Well, that’s probably a good thing, because Aldertrack’s Mike Fourcher says it’s just the beginning.
“Every analyst I’ve spoken to from Muni bonds and who looks at the budget for the city says that this property tax increase and the money that is raised this year really only gets us to our minimum credit card payment for everything that we owe on debt and pensions,” he tells us. “So we’re going to have another property tax increase or we’re going to have something else that’s going to come next year because we’re really not looking at it very hard. And when you talk to people who are in City Council and staff they say, “Yeah, we know, we’re just not able to deliver everything at once because it’s too hard to take one big bite.”
As we know, Mayor Emanuel wants a tax exemption for certain lower or fixed-income homeowners, but he’d need Governor Rauner’s approval for that. And there’s the rub.
“Rauner, who is on a very devoted mission to eliminate collective bargaining for government employees says, “I’m not going to talk about anything until we eliminate collective bargaining,” which is a no-go issue for anybody that’s in the Democratic party,” he tells us.
And from a purely public relations standpoint, the Mayor would seem to have the advantage. He’s going to bat for the proverbial little old lady in her bungalow, while the Governor seems heartless. But Fourcher says he thinks it doesn’t matter. Rauner wants those anti-union changes.
“I think he doesn’t care. I mean if you take a look at his playbook the way that he has been successful is by buying companies and then basically saying to every other constituent that’s connected to the company, “I’m going to burn this place down unless you give me everything that I want. And so he’s basically been successful by convincing everybody that he’s crazier than anybody else.”
Transit-oriented development is a big deal these days in Chicago, though it may seem like little more than a geeky policy debate. As Fourcher says, it has been driving quite a few proposals for apartment developments around the city lately, because it envisions big buildings with few to no parking spaces due to to their proximity to public transit nodes. Largely speaking, the neighbors don’t like them and are fighting them vigorously.
But Fourcher says it cuts to the heart of whether a city chooses to grow or stagnate.
“If you look at Paris,” he says, “Paris has taken great pains in order to make sure that there’s no development above a certain height. That everything stays never-changing and it all looks like it was in 1870, which is very beautiful and wonderful, but it means that the potential for growth is very low and the density stays steady, and the result is that as the City of Paris itself becomes more desirable to live in, because it all looks like 1870, that it becomes increasingly expensive and out of reach for people except for the most wealthy. And so then you have this ring that goes around the City of Paris outside of which is where all the poor people live and where all the crime is and all the problems and they’re not addressed because they’re not connected to the main City of Paris.”
And there’s a lesson in this for Chicago, he asserts.
“If you look at neighborhoods like Lakeview or Lincoln Park what has happened is that since the 1980s those neighborhoods have gotten considerably less dense. I grew up in Lincoln Park in the 70s and most of the houses around me were three flats and those have all been turned into single families. That means basically a third of the number of people that once lived there live there, so it’s less dense, it’s more expensive. You really turned it into a very different kind of community than it was before. And this is what I think TOD is about, which is trying to find ways to increase density in limited areas, but people that have those communities don’t want to change that.”
We talk about the seemingly insoluble situation at Dyett High School, where the Mayor may have thought he found solution to the weeks-long hunger strike by giving the protesters most of their key demands, but cutting them out of any continuing association with the school. The hunger strike continues with no resolution in sight. We ask what will happen if, tragically, a protester is seriously injured or possibly dies.
“I think this is really a product of some of the larger problems that Emanuel has had with community organizations and with the community overall,” he explains. “There has been almost from the beginning of his first term a lack of trust between him and community organizations. And he rarely has tried to reach out to community organizations and build personal relationships with them, and this is a case where the community organization has very little trust, very little belief that the Mayor is going to act in their interest. And conversely the city organizations who are basically an extension of the Mayor don’t really trust that they can work with the community organizations. So I think the solution the Mayor has come up with is we’re going to create something that is going to be okay, we’ll satisfy your problem but you’re not going to be a part of it. And so the city can avoid having to deal with these protesters”.
Aldertrack, a mostly subscription daily report on City government, has added a new service. It’s a wiki-style database encompassing all 68 boards and commissions associated with Chicago’s governance. There are policy and operations boards associated with the Police Department, Library and Planning. There are commissions that oversee standards for crane operators, electricians and masons. And there are advisory Boards such as World Business Chicago, which has no governmental role but gives Mayoral status to dozens of business and civic leaders upon whom the mayor can call for advice or assistance.
“We took pains to find out who the members are, to confirm who they are, then we looked up their backgrounds. We cross-referenced it with past press releases and journal proceedings from City Council,” he explains. “And we found in a number of cases for instance the City Library Board which is really the governing body for the library. All of the members are currently on expired commissions, so they need to be reappointed. Legally they are not really supposed to be making decisions about how the library is operated. We’re told well no big deal; the state has never had a problem with that before. Still you know, let’s clean it up guys.”
So, it’s sort of quasi-official. We’re in for the largest property tax increase in modern Chicago history. Along with new fees for garbage collection and new taxes on all kinds of other activities. We’ll know officially in a couple of weeks, but news reports about the plan haven’t been denied by the Mayor. Sun-Times political reporter Natasha Korecki says there’s some validity to the criticism that Chicago’s property taxes should have been raised gradually over the years.
“The dirty little secret about property taxes in Chicago is that they are pretty low and they’ve been artificially low for a long time,” she tells us. “If you look at the property taxes out in the suburbs, I mean, they pale in comparison. Of course schools are much stronger in the suburbs as well. So yes, it’s the same thing, politicians just kicking the can down the road and if they had done it gradually the increase wouldn’t be this (dramatic).”
“It’s more than nickel and diming this time around,” asserts the Tribune’s City Hall reporter Bill Ruthhart, talking about the calculus the Emanuel administration must use in advancing such a big increase. “So at what point does that property tax increase – yeah, maybe it’s still lower in the suburbs, but the stuff starts to add up and the math is done. Some people pay for private school because they want to stay in the City. The calculus starts to change. I think that’s part of what the City Hall is trying to figure out right now is how high can they raise the property taxes without making that gap too small, and the same goes for businesses downtown, office rent spaces and all that and the impact it has on that market.”
Mayor Emanuel called three large public meetings to talk about the budget, and they really didn’t go all that well. Protesters calling for a re-opened Dyett High School dominated the hearings and at one point rushed the stage, ending the second meeting.
“I don’t think he was surprised there was going to be some venom at these things,” says Ruthhart. “It built to the point where people were so angry they literally decided to step on stage and shut the meeting down. I don’t think he expected that. But he’s been protested for much of his first term ever since he closed schools. When he goes out they put out the notice right before he goes somewhere so protesters can’t show up, and this has long been a concern of his. But I do think the surprise was that it ratcheted up to the point where it did, and part of the reason it did is because he sat on stage and did not answer peoples’ questions when they were directly asking him questions. He just sat there and refused to answer and it just made people angrier than they already were.”
“He very clearly did not want to leave the stage because he knew the narrative of that,” Ruthhart continues. “He lost control of his meeting and finally a security detail said, “Look man, you’ve got to go.” And even when he was backstage he was trying to find a way to come back out. But the choices for him and his security detail at that point were two. It was either forcibly remove people at the meeting so they could put him back on stage or remove him from the situation, so they had to take the better of those two choices.”
Amid loud protests from hunger strikers, the Mayor and newly-appointed CPS CEO Forrest Claypool met with the protesters demanding a re-opened, CPS-run technology high school at Dyett, and announced two days later that they had agreed with the demand. They would re-open Dyett as a CPS-run school, almost as the protesters from KOCO had demanded, But KOCO would not be a part of the new school. The hunger strike still continues. But as Ruthhart explains, the Mayor may have won this round.
“To the general public who has not been following every twist and turn of the Dyett hunger strike they know that these people want their school reopened. And Rahm Emanuel and Forrest Claypool came up with a solution to reopen their school. Now, when you’re talking about the nuance of it’s not a green technology high school that the Dyett people wanted in the exact same form, well that’s a much more nuanced argument that does not fit into 140 characters on Twitter. It does not fit into a 30-second sound byte on the evening news, and that’s where the Emanuel administration got the upper hand. Here’s a plan to reopen the school. This is what these people wanted, and to the average Joe taxpayer sitting at home – well they gave them the school back. What more do they want? But, the issue is way more nuanced than that to these protesters.”
Korecki says there’s similar, though unrelated, media battle going on with the Governor, who is taking heat from the months-long budget stalemate.
“The Democrats are blaming this big looming shutdown on Bruce Rauner,” she explains. “So Rauner signs education funding, schools are open. Okay – he took that issue out. Then he went to court and made sure that state workers all got their paychecks and sent these e-mails out saying, ‘You’re all going to get paid. I’m going to make sure that you get paid’ when really you know he’s the one who is putting his foot down saying ‘I’m not going to approve it.’ He vetoed the budget, right? So again, to the average person, well schools are open. State workers are paid. Of course,” she adds, ” there’s a lot of people suffering right now.”
We ask whether the tactic is working. Has Rauner bought enough time to begin winning a war of attrition against the Democrats?
“What can Rauner really point to and say this is what I did for you?” Korecki asks.” He can’t point to anything. Everything he’s tried to float in the legislature has been killed. It has not been called. Mike Madigan has been controlling everything there. He’s saying he wants a property tax freeze with all these caveats. So it’s going to be a very interesting election coming forward with all the State Rep races, but I can’t say that you point to Madigan or Rauner and say either are winning right now.”
Bill Ruthhart gets the last word. Why haven’t Aldermen and State Legislators been able to deal with these looming pension deficits and funding holes on a regular, predictable basis? “Well'” he says, “If we’ve learned anything about politics in Springfield and Chicago, these guys don’t ever want to do anything until they have to.”
Wanna spend a half-hour talking about the Illinois budget mess and the neutron-bomb that is the Illinois pension situation? No? Who could blame you?
But this conversation’s a little different, because it’s with a guy who was there. For pretty much the whole thing. A reporter who covered the Thompson 3% compounded COLAs, the Edgar Ramp, the Ryan Buy-Out. The Blagojevich borrowing and the Quinn/Madigan “pension reform” that got killed in the Illinois Supreme Court. And the unions who went along with it all. And the City officials who accessed the money to build new, gleaming schools and maybe pay off a few of their own pensions.
Dave McKinney tells us that, in essence, nobody who ever got involved with the pension mess has clean hands today.
For 19 years, McKinney covered the goings-on in Springfield as the Sun-Times Springfield Bureau Chief. He’s not with the S-T any more, but in recent weeks he’s done some excellent work for Crain’s and for Chicago Magazine, in which he laid out the whole sordid 30-year history of under-funded pensions – and he attempts to pin a letter grade on Bruce Rauner.
No episode of Game of Thrones to House of Cards has ever depicted the level of deceit, ignorance, pandering and raw power-politics as this. And the best part? The folks who make these decisions know they won’t be around a generation later when the bills come due.
Ladies and Gentlemen, we present a full, unedited transcript of today’s conversation.
Ken: Dave McKinney for the first time is sitting at our table and I am thrilled to have you here, David. Good to have you.
Dave M: Thanks Ken.
Ken: So, there is a vast amount to cover, but I thought I would begin the program today by quoting you to yourself.
Dave M: Okay.
Ken: This is from your Crain’s piece which we will talk about later.
“For more than a quarter of a century governors and state legislatures, republicans and democrats alike made a series of financially toxic moves in the pension system for state employees and public school teachers. Proposals to fix the perennially underfunded pensions were based on botched calculations or no calculations at all. They were driven by misguided rationales that weren’t fully vetted. Everyone was to blame yet few people accepted the responsibility, even the public sector Unions that stood to lose the most sometimes embraced those choices.”
Dave M: Well that spells out 25 years of dysfunction in the state pension systems. And it’s an issue that a lot of Illinoisans if they’re not one of those people getting a pension or in line for one have a hard time getting their arms around it. We’re talking about a $104-billion problem right now for the state and it gets worse every year. And what I saw – I went back and I looked at four or five critical moments going back all the way to the late 80s where time after time after time these decisions get made, they are doing them without really any hint of what the long-term ramifications of them might be. The Unions as you mentioned are sometimes going along for the ride and supporting these things. Pension holidays for example…
Ken: Are they getting little sweeteners to help them along?
Dave M: Yeah. But in the end what we see is this problem getting worse every year to the point where now it’s crippling the state and will continue to do so for the next 30 years. One out of every four state dollars are going to be going to pensions.
Ken: What’s most fascinating to me about this is the narrative of course, that we’re all asked to swallow, that the cause of all of this is those greedy teachers and cops and social workers and firefighters and all these public employee people who have caused this to happen. Now it may be that their leadership was complicit in it, but the blame is not there. The blame is in pandering politicians who in order to get re-elected are willing to throw these different things on the fire.
This is the coolest thing of all, this piece in Crain’s. This is a graphic (copied above) that I’m sure you can’t really see all that well on television, but this is kind of where the unfunded pension is over the years and this is the Thompson years and so forth. Here, my friends, is the Edgar Ramp. Tell me about the Edgar Ramp. Governor Edgar is supposed to be one of the smartest and cleverest governors we ever had. How did he commit this to us?
Dave M: Well this was a scheme… I called it a scheme, it was a plan that Edgar and House speaker Michael Madigan came up with in 1994. And at the time to their credit it was viewed as a responsible way to finally get this pension problem under control, because for years, especially under former Governor Thompson when it came time to put together a budget and X-amount needed to go to the pensions they would always short the pensions and put it towards schools or whatever else. And so in 1994 they came up with a plan that set out over 50 years to get these pension systems at 90% funding, and that involved basically about a 15-year ramp-up where these payments would gradually increase to the point where finally in the early to mid 2000s they would start going up. That’s the ramp part that has just thrown the state on its back now.
Ken: But it’s important though from the way I understand your description of this, the next few years in 1994, those adjacent years when these guys would all still be in office, that ramp didn’t go up very far. It was pretty flat.
Dave M: Well it was pretty flat and there were some who would say that was by design. It helped them manage a budget in the late 90s and early 2000s without having to commit enormous sums of money. But in the process, the Supreme Court opinion in May that tossed out Senate Bill 1 pointed to the Edgar Ramp as one of the main causes for our dysfunction. And effectively what those 15 years did, it shorted the pension systems what they were really owed. I mean in the mid to late 90s I think it was like about $600-million the state was committing to the five pension systems. You know now, this year we’re on the hook for $7.6-billion.
Ken: So it’s fair to say that Edgar’s policies coughed up this hairball onto our carpet in the last few years. I mean that’s not an unfair statement, right?
Dave M: Well I mean that ramp is what’s still in place. I mean every year we’re following the dictates of that ramp and what the dollar amount every year is prescribed at. But what Edgar would say and in his defense he would say that there were a series of actions after this ramp was put into place that changed the whole equation. Things like pension enhancements, things like the early retirement program you alluded to under George Ryan. Pension holidays under Blagojevich, these things should have necessitated that ramp being recalibrated and it never happened.
Ken: But it wasn’t, so we ended up with it. I’m just so intrigued by all of the different levels on this. We kind of started in the middle but we really needed to start with the great Governor Jim Thompson, right, because Jim Thompson gave us the 3% compounded raises that we keep talking about. I mean everybody says these raises, if compounded, look what they’ve compounded to over the last 20-25 years. That was a Jim Thompson creation. Why?
Dave M: It was something the Unions were pushing at that point. They wanted to basically do more to protect the retirement annuities of their members which is exactly what they should be doing. At the time, though I went back and I looked at the floor debate, this preceded my time in Springfield, but I went back and I looked at the floor debate in both the House and Senate and really nobody was talking about what this might cost. And there was only as I recall one legislator who stood up and said, “Hold on guys, this is going to really be an eye-opener once we get it in place. It went into effect anyway. Thompson signed it and a short time later there was an estimate that came out I believe in 1990 that said that the cost was about a billion-3 of this, and that figure has not been updated since then, but I would just about guarantee you that that number is way out of whack. It’s probably much much more than that.
Ken: Now you got to interview pretty much all of these guys didn’t you?
Dave M: Yeah.
Ken: For this piece you wrote for Crain’s Thompson told you in essence I just had no idea it would be so expensive.
Dave M: Well yeah, I asked him particularly if he remembered anything about this pension omnibus bill that came to his desk in 1989 and in particular the compounding cola. And he’s like, “I don’t remember the cola part, I just don’t. It’s been so long ago I can’t remember it.” But he pointed out, “If I would have known it was going to cost a billion dollars I would have vetoed it.” And so there’s the first example we have of somebody not having numbers in hand when they make a decision about something that winds up costing the state a great deal of money.
Ken: And it is just the way of legislators everywhere. It happens in the City Council with the parking meter thing. When these big things come in they are given to you 12 hours before you have to vote. Most of these legislators let’s face it aren’t really sophisticated in these ways. They just look at it. The leadership tells them you’ve got to vote for this, they vote for it.
Dave M: That’s right, and you know I found that time and time again that the numbers that were generated ahead of these either they didn’t stand up or the numbers didn’t exist at all. And you know if you fast forward from Thompson into the Blagojevich years I started this piece looking at a bill that passed in 2005 that allowed the state to skip two years of pension payments, make partial payments.
Ken: With the City’s complicity. Everybody wanted that, right?
Dave M: Well they wanted it. It was part of a bigger thing designed to save the state money on pensions. There were other things in there that took aim for example at school districts that would award school administrators late in their careers these massive pay increases and then the state would have to pay the pension based on those. So they aimed to cut back on that, but these pension holidays I was really curious about what did they cost? Because that wasn’t ever spelled out ever that I remembered. And so I went digging and I found that on the floor the sponsors of this legislation said the whole package would save the state about 30 or $35-billion.
Well two or three months later the research arm of the General Assembly called COGFA they drew up some estimates that said that actually the whole thing was probably going to cost the state close to a billion dollars, and in particular these pension holidays along with clean-up from the Ryan period could wind up costing as much as $6-billion.
Ken: It’s unbelievable. And we really have to talk about George Ryan and this early retirement plan thing. I worked for the City at the time and this was the big thing, and we can’t forget Mayor Daley’s role in this because he and George Ryan were connected at the hip. I mean they agreed on everything. And this was George Ryan’s idea which helped Daley unload a lot of people off the City payroll and George Ryan was doing the same thing with state payroll, right?
Dave M: Well this was aimed strictly at the state. I mean this is something that both Ryan and Madigan embraced. When it came in late 2002 it’s a point if you remember it’s when George Ryan when his political career was really in ruin because of the license-for-bribes scandal and the federal investigation of him. It was clear at that point that the democrats had won the right to redraw the legislative boundaries and would take control of the legislature, and it was pretty clear that there probably would be a democrat running the governor’s office.
And so all that being told, there were all these government employees that that had gotten their jobs under republican administrations – Thompson, Edgar, and Ryan. And what this packaged aimed to do was to give those folks a way out. It came at the time too, post-9/11, where there was a true revenue drain and they justified it saying look, if we can clear the payroll of 7,000 people it’s going to cut down our operating costs and thus save money. Never minding the fact that you know by putting those people under the pensions it was going to increase it.
Ken: The people who are 55 years old and would be on it for maybe 40 years.
Dave M: This allowed people to retire as young 50. What it did it proved so popular that the estimates were way off. You had people taking out home equity homes to buy enough service credits and time credits to get into this. And so this plan to knock 7,000 people off grew to like 11 or 12,000 and it wound up being about a $2-billion boondoggle for the pensions.
Ken: Just another one.
Dave M: Right.
Ken: I do remember – my view is more from the City side of course, but I know that I was working in the mayor’s office at the time and when that was proposed I was 50 probably, just a little over 50, and if I had been able to come up with $22,000 I could have bought whatever it was, however many years it was that would have allowed me to have retired at full pension. And nobody – nobody stopped to think about wow, is that going to cost our children some money somewhere down the line? It’s insane. It’s just absolutely insane the way it was being done. But as you say, in the state it takes on an even additional level of sinister-ness because it’s actually political. It’s like trying to save some of the folks that would lose their jobs otherwise.
Dave M: I mean it had a twin purpose. And don’t forget I think everybody’s attitude about money at that point in time was a little different than it is today. Because I mean even though we had 9/11 and the revenues dried up after that, you know we were coming off the late 90s and the housing boom, and so people just thought that money was out there.
Ken: Money was everywhere.
Dave M: It would just all take care of itself.
Ken: And I think Dave that is such an important issue to help put this in perspective, because it is true, in the late 90s and all the way into the 2000 era the tax revenues were going up like crazy. The housing boom was in its zenith and it was possible to kind of think it was going to go on like that forever. The same thing in your personal life right? If you bought your house for $150,000 and suddenly it’s worth $200,000 and you know that soon it’s going to be a quarter of a million dollars.
Dave M: Oh exactly. When Edgar left office in 1999 I mean the state had a surplus of over a billion dollars. I mean contrast that with what we have now.
Ken: So let’s also bring our beloved Governor Blagojevich into this because Blagojevich introduced this new concept of borrowing as revenue. It was like oh we have a huge hole, I’ll just borrow $10-billion that will…and it did, it staved it off for a couple of year didn’t it?
Dave M: It did. They wound up putting I think about 7.8-billion of that 10-billion into the pension systems and almost overnight it changed the unfunded ratios from like 49% to like the low 60s. So for a couple of years you could see the effect of it, but then they used that spike upwards as justification then to get into that pension holiday thing that we talked about a little bit ago.
And one thing I didn’t mention about that was that here we are, you know that pension holiday in 2005 winds up coming onto the laps of the legislators two days before adjournment, no clear-cut estimates on how much it’s going to cost. And then kind of the cherry on the sundae is there were so many things on the docket as there always are at the end of session that they limited the debate with a stopwatch to talk about what eventually could become a multi-billion dollar expenditure. So I mean that gives you an idea of government at work.
Ken: I want to talk about a few other things in that, but this just takes me off on a little diversion. The now infamous 9% pension pick-up. When did that happen? Do you know? Was that before even Edgar and Thompson?
Dave M: You know what, that one goes back a ways. I didn’t really delve very deeply into that one to be honest with you, so I need to spend a little time looking into the history.
Ken: It’s been there for a very long time is the point.
Dave M: Correct, it has been. Absolutely.
Ken: Is it reasonable for the CTU to say taking whatever it is, 7% of that away is the same thing as a 7% pay cut? Is that a logical thing to say?
Dave M: I mean if you’re them it’s absolutely a logical thing to say. But I mean there’s an interesting thing and I think the Tribune had a piece a few days ago that looked at some of the suburban school districts and how it’s written into all the teacher contracts that the various school districts are going to be paying the employer share of that and not passing it on to the teachers, so it is a bit of a double standard.
Ken: It is especially – I have lots of friends on CTU who are not going to like hearing this, but when the Unions say ‘hey, this is all on the government because we made our payment every single time. It was the government that was on pension holiday.’ Well yeah, except that that was taxpayer money that was coming in to make those pension payments. You weren’t paying them out of your pocket.
Dave M: That’s true, that’s true. You know the thing with the Unions is they obviously want what is best for their members, but when it comes to the long-term security, the pension systems what I found in this piece is that desire often conflicted with the desire to have money up front to put into classrooms, to put a roof on a building. I mean those things seem to take precedence over the…
Ken: And that’s what makes this so complicated and not just so black and white that there are just a bunch of villains here. Because during some of these years I mean if you think about it there was an astounding building boom in Chicago for the public schools. Beautiful new buildings were built and a lot of older buildings were rehabbed, so there was a lot of money spent, appropriately so, for this. But again, what it comes down to is well if we could just put that little pension thing off for another 20 years we could use that money now.
Dave M: It’s so easy to do and you can understand why that behavior happens if you’re on a state legislature or city council or whatever because you’re not going to be around when the bill comes due. And what you have to face is that immediate need to make sure the school is open on time or that people have a contract to work under.
Ken: So talk to me about Rahm Emanuel. I’m baffled by Rahm Emanuel and all of this. He appears to be engaged but then I’m not seeing – again, this is easy for me to say, but I’m not seeing what appears to me to be clever leadership on this. We think about him as being the guy who was with the DNCC who was the arm twister in Congress who could make all things happen and he’s reminded us many times of how effective he was. So why isn’t he more engaged in Springfield and saying – this is what you are going to do?
Dave M: Well because I think he still doesn’t have the gravitas that a Richard J. Daley had. Richard J. Daley could order up something like that.
Ken: Richard J. Daley?
Dave M: Correct, and you know to some extent Richard M. Daley, but Richard J. Daley set the template. You know and Emanuel during my time there Emanuel came to visit I believe one time. And even Richard M. Daley would make it a habit every year of at least coming down once in May and opening up a big tent, Taste of Chicago tent. It was really kind of the goodwill, and with Rahm it’s much more kind of behind the scenes, on the phone, meetings in his office, stuff that we don’t see out in the open often.
Ken: Does this lead you to a conclusion that he’s decided that it’s just not possible and he’s not going to spend political capital on it?
Dave M: You mean on the pension question about how to solve it?
Ken: Yeah.
Dave M: You know in terms of the state pension problem I would guess he views that as somebody’s else’s problem. He’s got his own problems with the various pension funds on his watch, and what’s pretty clear is as long as there is the dysfunction in Springfield between Governor Rauner and Mike Madigan, you know Rahm has to be on the sidelines like the rest of us. I mean those two have to get on the same page before there can be any kind of movement on some of these other problems that the state faces including local pensions.
Ken: I just thought that he was going to be the perfect logical connective tissue between Rauner and Madigan, that he would be able to sit them both down and just say, “Shut up, do this.” Apparently that’s not the way it works though.
Dave M: That would be nice, but I mean don’t forget in Rauner and Madigan you’re dealing with two exceptionally strong-willed people, and Rahm is that way too, but Rauner is not accustomed to taking orders from anybody, nor is Madigan.
Ken: Right. None of them are. None of them have ever had the experience of having somebody say no.
Dave M: Right.
Ken: Especially our delightful governor, which again is sort of like the whole thing about him leading toward…just bankrupt it, because that’s the way he handled businesses, right. Come in, bankrupt it, you take the money out, you reconstitute things and you take the profit out and you move on.
Dave M: Yeah.
Ken: And guess what, this doesn’t work quite that way.
Ken: So maybe your grades have changed, but you gave the governor a C+ average although I find that kind of deceptive when you add all the things in because you gave him a D for fixing the budget, a D for playing well with others, a D for reforming pensions. The only thing he got an A on was taking on the Unions.
Dave M: Well he deserves an A for taking on the Unions.
Ken: Yes he does, I agree.
Dave M: He came into office at every opportunity saying he was going to do that. Now has he succeeded in getting concessions from them? Has he succeeded in changing the landscape much with them? No, not really, but I think what you have to measure any governor on is what’s the product. And at that point in time when I was looking at him, you know I went back all the way to Edgar in 1991 and the first six to seven months in office, that’s that honeymoon period that new governors have and goodwill is out there, and I just looked at kind of what did they all get. And when I did the piece for Chicago Magazine at that point Rauner the only thing really that he could point to was he had kind of patched together a fix to the fiscal ’15 budget and he had signed off on the legislation for the Obama Library in Chicago. Two things that in the broader scope of our problems don’t seem to amount to much. You look at other governors you’re talking multi-billion-dollar capital programs. You’re talking about under Blagojevich there was all this pent-up social stuff that was done.
Ryan had a first 100 days that would blow you away and even Edgar. Edgar had, in 1991 when he first took office he had a democratic-controlled Senate and House and he was able to wrest a lot out of Madigan then. I mean he got property tax caps. He got the education piece with the income surcharge back then extended permanently, two major concessions that he got in a budget stalemate then.
Ken: I think that’s what’s been one of Edgar’s frustrations, right, is looking at this and saying why can’t you do this? I won’t say it’s not hard but it’s doable, even if you’re on opposite parties you can get some of these things done.
Dave M: Rauner as much as he went after Unions he also went after Madigan, and since being elected those attacks against Madigan have not stopped. And you know most of these people who after they get elected there’s a certain pragmatism that takes hold because they know that they have to get things passed through the House, and starting with a budget. And if they don’t get just those basic things done they don’t get anything else, and I think that’s the challenge for Rauner going forward.
Ken: So Dave what happens now? I mean we’re, I don’t know how many months into this; we have no budget. The courts are basically running the state as I see it now because the different…people go to court and say ‘I need this money’ and the court says ‘Yes, you can be paid,’ and then the comptroller says, ‘Well we don’t have a budget; we don’t have any money.’ This is insanity. Things are always wacky in Illinois, but this is a level of wackiness that’sunprecedented.
Dave M: I think most of government now is functioning one way or the other with the exception of the human service people. Their money is still being held up and that’s the choke point here, and that’s where I think Rauner is hoping to leverage movement by the democrats on some of this turnaround agenda that he wants. And on the flip side, the democrats are saying look, we’re not going to let you gore labor unions or the trial lawyers and we’re prepared to just wait and let you take ownership of this. And so I don’t know. I think under Blagojevich in ’06 if I’m not mistaken we had an impasse that lasted all the way into November until we had sort of a final conclusion on the state budget. And I would not be surprised to see us go to that point if not beyond this year.
Ken: You know I had really intended for us to spend a good deal of time on the show today talking about the schools’ funding inequity, the systemic inequity that exists in Illinois that sets us apart from so many other states, but we really don’t have quite enough time for that and I’m hoping maybe sometime we can get you back just to talk about that.
Dave M: Sure.
Ken: Because that is a really interesting thing. But in the meantime, we just saw the Board of Education yesterday, CPS Board passed unanimously, as always, the budget. And if Blagojevich introduced the concept of borrowing his revenue the CPS has introduced a whole new thing of fantasy budgets. I mean this is like an entirely new concept. Oh there’s 500-million in there. Trust me, it will come sooner or later maybe, and if it doesn’t how many schools do we have to close? What do we have to do? Well don’t worry about it; we’re going to get it somehow. So this is the kind of game that the mayor and the governor and Madigan are playing with each other. They’re just playing chicken on this stuff.
Dave M: That’s absolutely right and as a result the state and these… Mark Brown, my former colleague at the Sun Times had a brilliant column today.
Ken: I highly recommend it.
Dave M: Yeah. It was about the effects of all this on a family with a developmentally-disabled child and those are the folks that are on the front lines here being subjected to this nonsense.
Ken: It’s cynical to say but it’s almost as though the governor said, “Well now here’s some sympathetic people who will get media attention. If I screw them then maybe the others will come around and give me what I want in the Union deals.” I don’t get it. I really honestly don’t understand it, but you’re the guy who has been around. You were in Springfield for 19 years or whatever it was, so if you don’t understand it I know I won’t.
Well we’ve run out of time, as we always do. Dave McKinney it was really a thrill having you on the show today because you really are one of those people who have just been around and seen it all and you’ve written so beautifully on it for so long and I hope you will still continue to write in Chicago for a long time to come.
Dave M: Thanks Ken. That’s really nice of you to say.
The City Council Progressive Caucus. It’s been around for years, and for much of that time it has prompted giggles at the mere mention of its name. But after the last election, the Caucus found itself with eleven declared members and several other Aldermen willing to ally themselves at least partly with the Caucus agenda. And there’s some evidence that Mayor Emanuel’s at least been listening to some of their ideas.
The major – perhaps only – issue on the agenda right now is the gaping budget hole. And the Mayor and the Caucus are far apart when it comes to finding solutions. But there could be consensus on the need to impose Chicago’s first-ever garbage collection fees.
“It might be a good idea to charge people $5 or $10 a month for trash and kind of force people to recycle more,” explains Ald. Scott Waguespack, who chairs the Caucus and is generally considered one of its founders. “But you have to have an education component with that and we do not do that in the City, and that’s what’s really sad about the fact that he came in, he cut out the Department of Environment. We no longer have one and we need to get that back in. And I think we’ve been talking about a lot of these environmental issues as a progressive caucus and trying to show people that there’s ways to do things better and we just haven’t seen it yet.”
But Waguespack says when it comes to controversial issues like a whole new fee, the Mayor’s quite happy to let the Aldermen lead.
“When you look at the Mayor basically coming out and saying ‘hey, this is a great idea,’ this is one of those things where he kind of throws it to the aldermen because he knows it might be pretty unpopular,” he explains.
As always, it’s about the details. Some aldermen have called for a “pay as you throw” system where a household would pay a separate fee for each container they have. But Ald. Susan Sadlowski Garza, recently elected in the 10th Ward, says that won’t work. “I don’t think pay as you throw is a good idea,” she explains. “We’re going to have people in the middle of the night going and stuffing other peoples’ garbage cans and then we’ll be getting thousands of complaints saying ‘they’re throwing garbage in my can.’”
There’s pretty general agreement that property taxes are about to go up, possibly by a lot. But the Progressive Caucus says it wants to explore cost-saving first. “You can minimize that by doing all the other things that people have pointed out is wrong with the City first and that’s what we haven’t done,” Waguespack explains. “So when the Inspector General says -look, I’ve given you these audits of how you’re poorly running all of your systems within your departments, fix those things first – that will shave off a few hundred million dollars from what could be a major property tax hike.”
And when it comes time for new taxes, the Caucus says there are other sources that could raise large amounts of revenue without hitting homeowners so hard.
“Look, let’s make it fair and equitable,” Waguespack says. “We did propose a financial transaction tax. That’s a State issue as well. (It needs approval by the Legislature.) That could equalize us in terms of what we need in revenue to slow down that property tax hike. The Mayor has flat-out said I’m not interested in most of what you guys have offered. His whole focus is on putting in a casino.” The Caucus members don’t believe the casino will generate nearly as much money as it proponents forecast.
The casino was a big part of Mayor Emanuel’s re-election campaign. But Waguespack says that was never enough.
“He had a plan,” the Alderman asserts, “And the plan was basically I’m going to borrow $1.9-billion and then I’m going to borrow $1.1-billion. And so you look at the borrowing that he’s done that has been his solution. Basically that falls on us now and for our next couple of generations of children who are getting stuck with that bill.”
A key issue for the Caucus is an elected School Board. But their plan has an extra layer.
“You bring people up through the Local School Councils. You have a regional LSC that they go to and then those people would then be able to run for a citywide board. That’s sort of a very simple model,” Waguespack explains.
“Some people say hey, have a hybrid,” he continues. “The Mayor could appoint two or three people, the rest get elected, but they have to have served on LSCs at a local and regional level to get that point so that they already understand it.”
Alderman Garza has a personal connection to the schools funding crisis. “I spent 21 years inside of a school and what’s happening in these schools is an atrocity to me,” she asserts. “Why are charter schools getting more money than neighborhood schools? There has to be somebody that sits on this elected school board that knows what’s happening inside the classroom, and I agree with Scott there has to be a vetting process. But we need people that know what’s happening in the trenches…Bowen High School. Right next to it is a charter school, I’m not going to even say its name, they have literally plucked and plucked and plucked these kids with a marketing scheme and rhetoric and they’ve plucked these kids out of Bowen which has been doing some really great things. And they can’t compete because Bowen’s budget was cut $1.3-million when the school right next door their budget was increased. So I mean you don’t stand a chance.”
We ask whether either Alderman feels optimism about Forrest Claypool, a respected administrator, taking the reins at CPS.
“Not really, no I don’t,” Waguespack claims. “There’s a directive from the Mayor and he takes the directive and that’s what everybody else has done that was before him.”
And finally, TIFs. “We have a city that is one-third of it, I think covered in TIFS,” explains Waguespack. “That’s more than any other city in the United States. We divert billions of dollars a year. I don’t know what the number is going to be at the end of this year, but we divert billions from the overall tax base. So what that is is basically you and I as homeowners are going to pay more in property taxes because of this imbalance and that’s what people need to understand. Now the Mayor and his floor leader and some of these other folks out there will say – hey, we’re going to have a boon of money when these things end 20 years from now – well, guess what, we have a crisis right now.”
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