Mayor Rahm Emanuel already has a list of educational accomplishments that I can refer to as noteworthy, including a teachers’ strike and a book ban. But I have to admit that he’s breaking new ground with his latest plan to finance public education: he’s turning our teachers into loan sharks.
That’s the best way to describe the mayor’s latest idea, in which he finally pays the $634 million we owe the teachers’ pension fund, then turns around and asks the teachers to lend most of it back, with interest.
The maneuver comes in the midst of heated contract negotiations, during which he’s been telling the teachers he might have to cut their pay because we’re so broke.
I think there’s something out of whack when we have no money to pay teachers to teach but millions of dollars to pay them to act like Tony Soprano.
If you recall, during the mayoral campaign, challenger Jesus Garcia was royally ripped for not having a plan to deal with our pressing financial obligations. Now it’s clear that Mayor Emanuel’s plan is to borrow money, get aid from Springfield, build a casino, and wait for the economy to improve. As most of these things don’t seem to be happening anytime soon, he’s left with the borrowing part.
Since winning the April runoff, the mayor has come up with at least three borrowing schemes. Let’s see—on June 17 he convinced the City Council to borrow $1.1 billion to pay off various debts and deals left over from the reign of Mayor Daley, who remains Chicago’s king of bad ideas.
A week later he got the Board of Education—compliant as always—to approve borrowing another $1.1 billion to have enough cash to get through the summer.
And then on July 1 he had his top financial adviser—Carole Brown—ask the teachers’ pension fund to lend the schools about $500 million at 7.75 percent interest.
In other words, to help pay back the loan he took out to make that pension payment, he’s asking the teachers to lend most of the money back. Basically, he’s paying off one obligation by creating a new one.
It’s not as though Mayor Emanuel didn’t know he had to pay the teachers’ pension fund. That obligation has been steadily growing since before he took office.
He wasted his first couple years trying to bully the teachers into accepting a cut in their pensions. When that didn’t work he got the General Assembly to allow him to postpone a few payments.
Earlier this summer he tried to get Springfield to give him another extension. But some Democrats said no thanks, and Governor Bruce Rauner—Rahm’s old wine-drinking and money-making pal—failed to round up the Republican votes to get him another extension. So the mayor made the payment on June 30.
Afterward the mayor held a press conference to moan and groan about it, saying the pension payment would require him to lay off 1,400 employees and make other cuts.
In other words, don’t blame me—blame those greedy geezers.
My guess is the teachers’ pension fund will take up the mayor on his offer and lend CPS the $500 million. Why not? In the age of Rahm, it seems the only people who get paid around here are the bankers.
I should remind you that we didn’t see any mention of these Rube Goldberg borrowing deals in the mayor’s campaign ads or mailings—paid for with contributions from a number of wealthy bankers—even though they skewered Garcia for not having a financial plan.
I know this because I keep a big pile of the mailings on my desk, despite my wife repeatedly urging me to throw that junk out. In fact, I have a mailing in which Emanuel bashes Garcia for voting to approve a property tax hike when he was an alderman back in 1986.
That was during the days of former mayor Harold Washington, who would have been mercilessly pounded by civic and corporate Chicago if he racked up debt like Mayor Emanuel.
Instead, Washington did the reasonable and mature thing: he raised taxes. For which he was mercilessly pounded by most of Chicago’s white elected officials—in case you forgot our fair city’s responses to our only elected black mayor.
Look, I realize these choices aren’t easy. Mayor Emanuel can either drastically cut spending or raise taxes. Neither option will win him many friends.
I suggest he try something a little out of the box, like a transaction tax on stock or options trades. Or a commuter tax. Or a tax on marijuana, presumably after leading the charge to get it legalized.
That one may take a while. Emanuel was also a little slow to back gay marriage and gun control. I guess we just have to give him time to evolve.
He has proposed slapping a 9 percent tax on streaming services like Netflix and Spotify, which will bring in about $12 million a year. I suppose every little bit helps.
You know, the mayor’s borrowing plans are giving me renewed appreciation for the great debate I had during the runoff with a Rahm volunteer who showed up at my door. This is the debate that culminated with me telling him to get off my porch before I called the police, and him telling me to fuck off.
It was practically a repeat of the Lincoln-Douglas debates.
Wearing his “I’m with Rahm” button with pride, he told me that the mayor had a plan to “stick it to the unions.” Garcia, though, would “jack up our taxes and give the money to the unions.”
In retrospect that sounds like a better approach than what Mayor Emanuel ultimately came up with. v