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Mr. Mayor, Show Us the Money!

 

220px-Rahm_Emanuel,_official_photo_portrait_colorRespectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor

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.”

 

 

 

 

 

 

128 thoughts on “Mr. Mayor, Show Us the Money!”

  1. Karen S.,
    For purposes of clarification, the citizens do have someone at the bargaining table. They elect their representatives who hire and fire department heads who deal with the union contracts. One of the main points of the article is that the union contracts were not the problem that has caused the pension shortfalls. The city admits not paying its required amounts to the pension plans for decades, just like the State of Illinois. How does that purposeful underpayment equal fault on the parts of the unions?
    Can you provide some documentation that charter schools perform better than public schools? Prior articles on this blog have suggested the opposite. I think our discussion will benefit from your sources.

    1. Chicago charter schools expel many more kids than district schools — new data

      By Valerie Strauss

      February 26 at 1:41 pm

      New data released by the Chicago Public School system reveals that the city’s public charter schools — whose expansion has been pushed by Mayor Rahm Emanuel for several years — expelled about 12 times the number of students last year than did traditional public schools.

      The Chicago Tribune reported that in 2013, charter schools with a total enrollment of about 50,000 students expelled 307, while the traditional school system, with more than 353,000 students, tossed out 182 students. That, the Tribune said, meant that “charters expelled 61 of every 10,000 students while the district-run schools expelled just 5 of every 10,000 students.”

      The high charter school expulsion rate is not singular to Chicago; such practices have been documented in many other cities where charter schools have grown as well. My colleague Emma Brown wrote in this January 2013 story that

      D.C. charter schools expelled 676 students in the past three years, while the city’s traditional public schools expelled 24, according to a Washington Post review of school data. During the 2011-12 school year, when charters enrolled 41 percent of the city’s students, they removed 227 children for discipline violations and had an expulsion rate of 72 per 10,000 students; the District school system removed three and had an expulsion rate of less than 1 per 10,000 students.

      What these statistics do is underscore the unfairness of comparing charter schools and traditional public schools in terms of student achievement. Why? Many (though not all) charter schools are very aggressive in separating the school from students who are seen as especially difficult to educate. Traditional public schools don’t have the same luxury; they have to take all students — including the ones thrown out by charter schools — and have a much harder time expelling them.

      This, of course, affects school-wide standardized test score averages, which are the chief metric by which schools and districts are being evaluated in this test-obsessed school reform era. Even if you take charter advocates at their word that charter schools don’t toss out kids to improve their academic record (and in some cases that is known not to be true), the fact is that claims that charter schools are educating the same population of children as traditional schools are simply not true in many cases.

      This was the first time this data was released in Chicago, and the district’s chief executive officer, Barbara Byrd-Bennett, acknowledged that the statistics will be controversial. The Tribune quoted her as saying:

      “I think there’s been a lot of supposition and conversation about what and how the charter success is measured, whether they throw kids out or they keep kids in. I think having the data is going to now lead to productive conversations.”

      For there to be productive discussions in Chicago, Emanuel will have to face some facts. On her blog, education historian and activist Diane Ravitch noted that Emanuel “once praised the Noble network of charter schools in Chicago” for having a “secret sauce” for success, and part of it was fining students $5 for every disciplinary infraction — leaving some families owing thousands of dollars to the school. According to the Tribune, the three campuses in the Noble network expelled between 2 percent and nearly 5 percent of their students in the last school year. That sounds like it could be a “secret sauce” ingredient, too.

      © The Washington Post

  2. Karen S, I agree with you 100% and you said it very well. The unions are corrupt and bias. Our local, state, and national government has become very corrupt. I was a teacher in CA for several years and can vouch for what Karen is saying.

  4. Having once held cards in two unions in California I appreciate your rant Karen. S. I have often felt like the soldier in the trench being overrun. The only weapon at hand that I can use is one that has nasty concussions.

  5. Annie – we have a nurse in the family. Staffing ratios and lack of sick time is an atrocious problem. It seems like it’s pretty common for very ill nurses to have to work, even though the patients they come into contact with can be in fragile health, or have just received a surgical implant.

  9. Dupes are not hard to dupe, when you speak to their inner greedy, selfish , jealous selves. The Plutocrats like to make the average worker see themselves as someone who has a chance at becoming wealthy. I can see them chuckling.

  11. The people of Wi. have spoken, TWICE. The spoke louder the recall vote. Elections matter, rhetoric does not.

  12. What I saw during the WI protests is that the Plutocracy managed to divide the working class people of Wisconsin. Worker against worker, jealous of the small amount a Public Union worker’s wages were over a private sector worker. Why do worker class people trust their employers to do right by them? Do they really think HR is their friend? Workers are expendable, with the decline of unions we have seen the wages go down, protections and safety for workers in decline. Look at Germany a country that is doing well financially, a strongly unionized workforce with worker satisfaction at a much higher percentage than here in the US. We are so on the wrong track, many people are duped into voting against their own best interests. Serfs to the Pluocracy.

  18. Chicago has the highest taxes in the nation now, and the best paid, pension, public employees. The Chicago Teachers fail as teachers and the public employees are corrupt. Gee, sounds like Motown! “Turn out the lights, the parties over.”

  19. My experience with nursing unions has only been very positive. The CNA has been instrumental in getting decent nurse/ patient ratio laws passed in California. That benefitted the patients and the nurses.

  20. Full disclosure here. The only time I’ve heard Rahm Emanuel was in several very smug interviews where I really disliked him.

    First, slush funds, funneling funds away from schools, earmarks, pork, discretionary funds, quid pro quo to campaign contributors and cronies – all has to stop. Sometimes there are spending limits on “discretionary funds” that preclude them from beings used in other areas that have run out of money. That’s absurd. The best defense we have against wasteful government spending, fraud, and financial neglect is the ease with which information can be disseminated. Just look at how much was accomplished in Bell, CA where politicians were draining the funds of their city, populated mainly by people of modest means.

    Second, do take articles by Good Jobs First with a grain of salt. They are not a non-biased, non-partisan think tank. They received $3.8 million since 2005 from labor unions, and $6.9 million since 2003 from various openly Liberal foundations. That does not mean that they are wrong, but they are about as partisan as a group funded by Anne Coulter.

    Third, unions can and do fail in their stated goal of looking out for workers. Members of my family have had troubling experiences with unions. And then there are the unions that demand that bread trucks transport only breads and pastries, and nothing else, even if there is room on the truck. When faced with benefits demands that companies felt they couldn’t pay, some have completely closed up shop. Since everyone lost their job, the union didn’t exactly look out for workers’ best interests.

    And I take issue that they take money from every worker and funnel it towards mainly Democratic politicians, regardless of the political affiliation of the worker. In essence, they are bundling campaign contributions that are forced from the worker. Inevitably, every single time that workers are given the right to opt out of political contributions through their union, the majority opt out. Unions contribute around $250 million a year to mainly Democrats. That is serious money.

    And there are unions who get government contracts, and private companies are not allowed to even submit a competing bid.

    There are the teachers’ unions who fight better performing charter schools, and protect convicted pedophile teachers. In CA, it takes several years through the court and hundreds of thousands of dollars to fire a teacher, even with a conviction of molestation. So we’re stuck with pedophiles having nice, fat, taxpayer funded pensions waiting for them when they get out of prison. Pensions that were earned while they used schools as hunting grounds. Those same teachers’ unions have tenured teachers who basically sit there like hockey pucks while bright young teachers with great ideas get laid off. My friend’s child went to a school where the teacher just stopped showing up. No medical illness was claimed. He had a different substitute teacher every day, almost, and some of the kids in his class were held back. I myself have had a few glorious teachers in the public school system, and several who were just absurdly awful but totally protected by tenure. I would rather have a meritocracy in public schools, with the best teachers staying, and getting the best salaries, and the worst performers let go. Why should my child be stuck with a teacher who wants to read a novel all day?

    But my main issue is that the taxpayers who pay these government union contracts essentially don’t have a seat at the table. They don’t get to vote on benefits packages or contract renewals. If a politician who was funded by unions decides to make a deal where a worker can get full pay pension benefits after working only 5 years, there is nothing the public can do about it.

    These are not the days of Upton Sinclair’s The Jungle. I would much rather that every employee enjoy the protections of the law, including workplace safety, than that he had to belong to a union.

    I understand that there must be some unions out there that do some good. But my own research and family stories about unions have been negative.

    http://www.illinoispolicy.org/policy_posts/average-government-pensions-in-illinois/

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