November 11, 2015
CITY COUNCIL'S "TOUGH DECISION" IS NON-SENSE
ANALYSIS & OPINION BY RUSS STEWART
by RUSS STEWART
Beware the politician who loudly proclaims that he or she just made a "tough decision." It invariably means the wrong decision, it's always the expedient decision, and it is perpetually used as an excuse for raising taxes rather than cutting spending.
So it was on Oct. 28, when Chicago aldermen made the proverbial "tough decision" to pass Mayor Rahm Emanuel's $7.8 billion budget, with $720 million in new taxes, fines and fees, by a 36-14 vote and approved a $543 million property tax hike spread over 4 years by a 35-15 vote. Another $45 million property tax hike will go to school construction. The increases will not be reflected until the second installment of the 2015 bill is issued in August of 2016.
"It's just plain stupid," first-term Alderman Anthony Napolitano (41st) said of the "tough decision" mantra, which he said has been used in Chicago for 20 years. "It is our job to make the right decision, and increasing property taxes was not the right decision, and it certainly was not a tough decision," Napolitano said. He said that using the $530 million in unallocated tax increment financing district funds would have been the "right decision."
"If we didn't do it the courts would have made us do it," Alderman Nick Sposato (38th) said of the property tax hike to fund the shortfall in police and firefighter pensions. "It was neither a right nor wrong decision. It was the only decision." Sposato was among the "Emanuel 36."
Other aldermen joined a chorus of excuse making. Alderman Pat O'Connor (40th), who has been in office since 1983, said Chicago has a "municipal illness" and that there is "no option of saying no." Alderman Carrie Austin (34th), who has been in office since 1994, said that "none of this is easy." They were present at the creation. They supported the Daley Administration budgets that systematically looted the pension funds, but nobody had the guts to say "We take the blame. We wrongly spent the pension money."
Napolitano, who is a firefighter on leave and a former cop, said that he received "hundreds" of phone calls and e-mails, and even office visits, from 41st Ward constituents, praising him for his anti-Emanuel votes, even from police officers and firefighters, both active and retired. "Their attitude is that the politicians squandered the (pension) money, and they should find a way a way to recover it. In effect, they will now have to pay twice," Napolitano said.
Alderman John Arena (45th), who is no lapdog for Emanuel, nailed it when he said the city had an obligation to those who risk their lives and deserve their pension, but that didn't necessarily mean that it had to be paid for by property taxes. Nevertheless, Arena voted with Emanuel.
Napolitano said that a lot of people think that the property tax hike is a "one time proposition," which he said is not true. "It's spread over 4 years, through 2019, and taxes will rise each and every year," he said. "There is no 'sunset,' and more pensions will need to be funded." Napolitano said that his ward has $800,000 homes in Old Norwood Park and $600,000 homes in Edgebrook. "They are going to be hit hard," he said.
Chicago has $41.4 in unfunded pension debt, plus $36.7 billion in structural and bonded debt and another $13.4 billion in Chicago Public Schools debt. Going into 2016, Chicago had a revenue deficit of $754 million. During 2013 to 2015, the city borrowed $300 million, of which half was spent on day-to-day expenses such as landscaping, building board-ups and lawsuit settlements. The worst fiscally is yet to come.
Here are some interesting take-aways from Oct. 28:
Race: Of the council's 50 members, 18 are black, 10 are Hispanic and 22 are white. Only two of the "Funky Fourteen" are black, while four are Hispanic and eight are white. That means that 89 percent of the black aldermen, 60 percent of the Hispanic aldermen and 64 percent of the white aldermen aligned with the mayor.
Geography: Every South Side black aldermen (including newly minted clerk of court slate candidate Michelle Harris) backed the mayor on the budget. The only of the 14 among them are West Siders Chris Taliaferro (29th) and Jason Ervin (28th). South Sider David Moore (17th) made it 15 on the tax vote. The common presumption is that city black voters, at least half of whom are tenants and at least half of whom get some government benefit, are not the least intolerant of an alderman who votes for a tax hike, but even though throngs of upwardly mobile blacks have fled to the south suburbs, there are still substantial pockets of home-owning middle class blacks in the Far South Side 9th, 34th and 21st wards, as well as in the south Lakefront/Hyde Park 4th, 5th, 7th and 8th wards. They will suffer some tax hike, although most of the homes are valued at less than $250,000. Every alderman from those wards backed Emanuel.
Of the anti-Emanuel white aldermen, the only alderman from the outlying nine wards on the Northwest Side and the Southwest Side, where most police and firefighters reside, is Napolitano. Sposato, O'Connor, Arena, Marge Laurino (39th) and South Siders Patrick Daley Thompson (11th), Marty Quinn (13th), Ed Burke (14th), Matt O'Shea (19th) and Mike Zalewski (23rd) voted "yes."
Of the six white aldermen from the North Lakefront -- Joe Moore (49th), Harry Osterman (48th), James Cappleman (46th), Tom Tunney (44th), Michele Smith (43rd) and Brendan Reilly (42nd) -- only Reilly (from the North Loop/Michigan Avenue Gold Coast) and Osterman (from Edgewater) opposed the budget and the tax hikes. Reilly's ward, with a multitude of $1 million-plus condos, would be socked with huge property tax hikes.
Then there is the "Inner Lakefront," composed of predominantly white upscale areas like Wicker Park, Ravenswood, the South Loop, South Albany Park and, to a lesser extent, Jewish-dominated West Rogers Park. Four of those five aldermen voted against Emanuel: Debra Silverstein (50th), Scott Waguespack (32nd), Deb Mell (33rd) and Brian Hopkins (2nd); only Ameya Pawar (47th) voted with the mayor. Mell got 50.2 percent of the vote in the February election, barely avoiding a runoff, and she can ill afford to be portrayed as a tax hiker in 2019. Waguespack is positioning himself to run for mayor in 2019.
Four of the 10 Hispanic aldermen, representing six North Side Puerto Rican-majority wards, opposed Emanuel: Milly Santiago (31st), Gil Villegas (36th), Carlos Ramirez-Rosa (35th) and Roberto Maldonado (26th); Ariel Reboyras (30th) and Proco Joe Moreno (1st) backed the mayor. This is noteworthy, as Puerto Rican home ownership is below that of Mexican Americans. Raising taxes is less combustible. Why the rebellion? The four South Side Mexican-American aldermen backed the budget and the tax hikes.
Seniority: Seven of the 14 who voted against the budget were first elected in this year. "They voted for political self-preservation," Sposato said. Those seven are Napolitano, Santiago, Taliaferro, Villegas, Hopkins, Ramirez-Rosa and Susan Sadlowski Garza (10th), who won her Far South Side/Hegewisch ward by 20 votes. Full of verve and enthusiasm and at the start of a new career, the freshmen understood that a pro-Emanuel vote would complicate their 2019 re-election.
The mentality among the more senior aldermen ranged from "take a hit for the team" to "take a hike." For veterans, being an alderman ain't what it used to be. At least 3 years of "tough decisions" lie ahead. They have their city pensions, and those with 20 years in office max out at 80 percent of the annual salary, which ranges from $105,939 to $117,333, depending on whether the aldermen take their annual $2,000 salary hike. That comes to about $8,000 a month in pension payments for life. Aldermen such as Laurino and O'Connor, both in their 60s, will be out the door in 2019, along with Moore.
The "Emanuel 36," however, have collected a lot of chits, from both the mayor and the public sector unions. The Service Employees International Union dumped nearly $700,000 into Arena's re-election bid and $120,000 into Sposato's. Police, firefighter and teachers unions will remember their "36" friendlies, with both endorsements and money. Oct. 28 was a crucial test: Will union cash outweigh voter anger? Thirty union-paid or Emanuel-paid direct mail pieces over 2 months in 2019 can make a voter forget whether he's even wearing socks.
Mayor in charge: "There was no pressure from the mayor," Sposato said. Obviously, Emanuel needed 26 votes to pass his budget, and he got 36. Now it's payback time. Emanuel spent $24 million to get re-elected. He could snatch a premier cabinet post in a Hillary Clinton Administration, but he's never going to be an Illinois governor or senator. To maintain his credibility, Emanuel must propagate the illusion that he's running in 2019, which means raising money. He can easily raise $10 million annually. Whether or not he runs in 2019, he can spend some of it to aid his "36."
2019: Two aldermen are seen as potential mayoral contenders: Waguespack, who is white, and Roderick Sawyer (6th), who is black and who is the son of former mayor Eugene Sawyer. "He's the kind of black (candidate) who will sell well among whites," one alderman said of Sawyer. Waguespack voted against the budget and tax taxes, and he will continue to do so; Sawyer backed the mayor. Arena also might run for mayor, and he reportedly is grooming a replacement as alderman, but he would go nowhere without union cash.
Over the next several years, expect to hear all about Emanuel's "tough decisions." Watch your wallet.
Send e-mail to russ@russstewart. com or visit his Web site at www. russstewart.com.