I guess you don’t have to be from Chicago or Illinois to know who Rahm Emanuel is. The current Mayor of the City of Chicago, Rahm Emanuel is the former chief of staff to President Obama and a former Congressman. He is also a former investment banker. It has been alleged that this former investment banker has been crying poor since he entered office and proposing that city workers must pay more into their pension funds and get less pay and benefits.
“If you’ve read the financial news out of Chicago the last few weeks, you’ve probably heard that the city faces a major pension shortfall, supposedly because police officers, firefighters, teachers and other public workers are selfishly bleeding the city dry.
You’ve also probably heard that the only way investment banker-turned-mayor Rahm Emanuel can deal with the seemingly dire situation is to slash his public workers’ retirement benefits and to jack up property taxes on those who aren’t politically connected enough to have secured themselves special exemptions.” Pandodaily
I guess the idea that a politician would want to claim that union workers and municipal workers are destroying the city’s finances is not a new claim. It is one of the favorite dog whistles of politicians of various stripes. You recognize the claim. The pensions are in trouble because the workers have demanded too much over the years. That audacious, and false claim has been made repeatedly in recent years. We have discussed the pension shortfalls before.
The most amazing part of this latest claim that pensions are destroying the City of Chicago’s finances is the disclosure that Mayor Emanuel may be hiding a large trove of cash from the public eye. Enough money to pay the yearly pension payment.
“Chicago is the iconic example of all of these trends. A new report being released this morning shows that the supposedly budget-strapped Windy City - which for years has not made its full pension payments – actually has mountains of cash sitting in a slush fund controlled by Mayor Rahm Emanuel. Indeed, as the report documents, the slush fund now receives more money each year than it would cost to adequately finance Chicago’s pension funds. Yet, Emanuel is refusing to use the cash from that slush fund to shore up the pensions. Instead, his new pension “reform” proposal cuts pension benefits, requires higher contributions from public employees and raises property taxes in the name of fiscal responsibility. Yet, the same “reform” proposal will actually quietly increase his already bloated slush fund.
But it gets worse: an investigation by Pando has discovered that Emanuel has been using that same slush fund to enrich some of his biggest campaign contributors.” Pandodaily
That is an amazing claim, but I am not surprised that a politician would hide money to benefit his campaign contributors. However, in light of the latest Supreme Court decision in McCutcheon vs. FEC that removed most of the campaign donation limits, the Supreme Court Majority would be shocked that a politician might be serving his/her campaign contributors at the expense of the citizens!
To be fair to Mayor Emanuel, this secret slush fund was not his idea. It was started years ago, but Mayor Emanuel seems to have welcomed the idea with open arms.
“The new report, from the taxpayer watchdog group Good Jobs First, shows how Chicago’s roughly 150 “tax increment financing” (TIF) districts divert property taxes out of schools and public services and into what is now known as Chicago’s “shadow budget.” That’s a slightly nicer term for what is, in practice, Emanuel’s very own sovereign wealth fund.
Living up to his billing as “Mayor 1%,” Emanuel has used the fund to (among other things) offer up $7 million of taxpayer cash for a new grocery store, $7.5 million for a proposed data center, $29 million for an office high rise and $55 million for a huge new hotel (and that latter project is on top of $75 million more in tax money Emanuel has offered up to build a private university a new basketball stadium). And these are just a few of the corporate subsidy proposals in a $300 million spending spree Emanuel has championed at the very moment he has pled poverty to justify pension cuts, property tax increases and the largest school closure in his city’s history.
Contrary to the story of public employees bleeding taxpayers dry, the Good Jobs First report proves that the slush fund is the root of the city’s true fiscal problem. As the municipal budget figures show, over the last 14 years Chicago refused to make its necessary pension contributions. Yet, at the same time, the city’s TIF-based “shadow budget” skyrocketed. In effect, more and more public revenue that was contractually obligated to pensioners was being diverted by politicians to fund TIF subsidies, many of which go to subsidize wealthy corporations.” Pandodaily
I recommend that you review the “shadow budget” article linked above for a full description of how the funds are channeled into its deep pockets controlled by the Mayor and mostly hidden from voters, and even alderman. Mayor Emanuel has kept the shadow budget hidden from the media and has even claimed that he has diverted some of it towards schools.
“The scheme has gotten so out of control that, according to Good Jobs First, annual TIF revenues now far exceed the annual cost of funding the city’s pension systems. The report shows that in 2013 Chicago’s pension costs were $385 million whereas Emanuel’s slush fund that year received $457 million.
For his part, Emanuel has insisted that roughly a third of TIF funding goes into schools (at his sole discretion, of course). Yet, his slush fund is so opaque there’s little way to verify this claim. Indeed, Chicago’s local public radio station WBEZ recently noted that it “has repeatedly requested a breakdown of all current TIF-funded projects, but [the Emanuel administration] has not yet provided it.” ‘ Pandodaily
Can any so-called public servant be any more arrogant and corrupt than when he cries poor and hides a multi-million dollar slush fund and refuses to disclose how much is in that fund and how he disburse monies from that fund? What do you think should be done to force the Mayor to disclose the shadow budget?
How can any city or state administration be trusted in their claims that the money isn’t available to pay pensions and to keep schools open, when so-called Shadow Budgets are controlled by politicians, corporate and institutional beggars and wealthy contributors?
Mayor Emanuel, while you probably don’t read this blog, I challenge you to show us the money. Show the citizens of Chicago the money. Show the media the money and let them see the books. Just stop showing the money to your corporate sponsors and controllers! Mayor Emanuel, we will be waiting for your response!
The whole world is watching! Well, maybe not the whole world!
Respectfully submitted by Lawrence E. Rafferty (rafflaw)-Weekend Contributor
“The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.”