With the city’s public schools facing massive budget deficits and cuts, house speaker Michael Madigan has apparently decided that it’s in Chicago’s best interest if Mayor Emanuel is more like me.
No, he’s not urging the mayor to drink wine, eat chicken, and stay up late watching old Richard Pryor comedies like I did last weekend. Instead, Madigan sent one of his key legislative allies to a recent City Council hearing to tell aldermen that if the city wants more money from Springfield, it will have to clean up its financial act, starting with TIFs.
(Next thing you know the speaker will be calling for a financial transaction tax and bashing the mayor’s DePaul basketball arena/Marriott hotel deal. I know, baby steps.)
Specifically, I’m referring to the testimony delivered by state rep Barbara Flynn Currie at a July 10 hearing of the council’s education committee—chaired by Fourth Ward alderman Will Burns. A close Madigan ally who represents Hyde Park, Currie was there to discuss the ongoing financial crisis at the Chicago Public Schools.
On the table was Mayor Emanuel’s proposal to have the state pick up about $200 million of the annual payment CPS has to make to the teachers’ pension system.
In a nice way, Currie told the alderman it’s not going to happen—if it happens at all—unless the city changes its ways.
“I was passing on some of the responses I’ve heard from my legislative colleagues,” Currie told me.
One of her legislative colleagues was a little blunter, at least off the record: “Barbara’s testimony was Madigan’s way of telling the mayor, ‘Hey, Chicago, there will be no help from us if you don’t put some skin in the game.’ ”
Let’s start with the pensions. As Currie pointed out, it was only five years ago that Mayor Daley sent his top school aide—former CPS CEO Ron Huberman—to Springfield to ask the General Assembly for a “holiday” on pension payments so CPS could get its financial act together.
The General Assembly gave CPS that holiday. But now things are worse. “Many believe that the three-year pension holiday we approved earlier this decade should have been a breather for CPS to figure out a more stable way to make payments,” Currie testified. “Instead pension liabilities ballooned after the three-year break.”
I have mixed feelings about this issue. As a property taxpayer in Chicago, I’d just as soon that someone else—and I don’t care who—pays the obligations Mayors Daley and Emanuel allowed to balloon so I don’t have to.
On the other hand, I know our local leaders can’t be trusted to prudently spend the money the state gives them. So chances are they’ll just take advantage of a greater state pickup to do something stupid, like funnel $20.5 million to a company that once employed former CEO Barbara Byrd-Bennett to train principals. Just to give you one example I don’t think I’ll ever get over.
Instead of using the pension holiday to find money to pay the teacher pension obligations, Mayor Emanuel tried to muscle Chicago Teachers Union president Karen Lewis into accepting pension cuts for retirees.
Think of it as akin to Napoleon losing his empire for having the audacity to invade Russia. Not that I’m comparing Rahm to Napoleon. Though both of them are short. (I know—cheap joke, Mr. Mayor.)
After talking about how Chicago messed up the pension holiday, Currie moved on to the tax increment financing program—one of my favorite subjects, right up there with Richard Pryor movies from the 70s.
Currie said, “Many wonder whether Chicago is in fact over-TIFed, with negative consequences for school budgets.”
Count me among the many!
“According to the Illinois Department of Revenue, TIFs cost CPS nearly $230 million in [fiscal year] ’13,” she added.
She did note that the mayor had given the schools $25 million from TIF reserves. But there’s still up to $1.7 billion left in those reserves. And TIFs continue to siphon off around $200 million a year from the schools.
So how can the mayor claim this crisis is an emergency that demands a state bailout if he’s diverting all that money from the schools to TIFs?
Look at it from the state’s perspective. If the state gives CPS more money for its schools while the city just keeps diverting property taxes to TIFs, then in reality state educational aid is at best a break-even deal.
Currie also gently chided CPS for the various balloon borrowing deals it signed with lenders that have jacked up the cost of debt by hundreds of millions of dollars.
“Some question whether the city is taking aggressive enough action to forestall banks calling in $228 million in loans, given bond-rating downgrades,” Currie said.
Most definitely count me in as among that “some.”
For his part, Alderman Burns says he welcomes her testimony even though she criticized the city. “Barbara is giving a perspective from the House of our situation,” says Burns. “And we have to take it seriously.”
Currie also advised the city to consider holding a referendum on raising property taxes to fund the schools.
Would voters approve a tax hike, even for schools? It’s hard to say.
On the one hand, I speak from experience when I say no one likes paying taxes. On the other hand, Mayor Emanuel did convince 55 percent of the electorate to reelect him.
Currie closed her testimony by urging everyone to see Trainwreck.
Not really. I can’t imagine Representative Currie advocating a movie as raunchy as Amy Schumer’s sex comedy, as funny as it is.
But that’s my recommendation. Anything to divert our attention from the mess our mayors keep making of our public schools. v