My Blog

Tag: Rahm

  • Rahm: Higher Cigarette & Amusement Taxes

    Mayor Rahm Emanuel is considering an increase in city taxes on cigarettes and entertainment to help close an anticipated $369 million gap in next year’s budget, City Hall sources said Wednesday.  …

    It’s unclear how much the cigarette tax might be raised. A city tobacco tax increase would come on the heels of a $1-a-pack state hike that took effect July 1. The city last increased its cigarette tax by 20 cents — to 68 cents a pack — in 2006.

    Taxes on a pack of cigarettes in Chicago total $5.67, the second-highest per-pack tax in the nation, behind New York City’s $5.85 a pack. The city expects to bring in $18.7 million in cigarette taxes this year, compared with $32.9 million just six years ago, according to city financial records.

    via Chicago Tribune.

    Cook County has already proven that when you raise cigarette taxes you lose revenue.  The city’s own numbers are another example of that.

    Does Rahm have any plan to cut ANY spending?  Anything other than police officers?

    Why don’t we shut down the TIFs?  Take fund necessary to pay off the bonds and do so; take the rest of the funds and return them to the general fund.  That would be quick and easy.

    Enough with the !@#$^ taxes.

  • Ald. “New Tax” Cardenas Wants $5/mo

    Chicago should impose a “safety and security fee” — as high as $5 a month on homes and businesses — to generate the $70 million needed to hire 700 additional police officers, an influential alderman said Thursday.

    Ald. George Cardenas (12th), chairman of the City Council’s Health Committee, said Chicago desperately needs a surge in police hiring to ease a severe manpower shortage that has hamstrung the city’s ability to stop a surge in homicides and shootings.  …

    Police and Fire are the very definition of general funds.  This is nothing more than a $60/year tax on everyone.

    Fraternal Order of Police President Mike Shields said he would welcome “any new source of revenue” that could be used to bolster a police force that stands at 11,799 after a three-year hiring slowdown.

    Through Aug. 15, 420 police officers had retired, but only 127 new officers had been hired, he said.

    But, Shields said, “Why is it that we have to go to another source of revenue to pay for these officers? Policing is a basic city service that should be in the budget without a new fee. The mayor eliminated 1,252 police vacancies. The 2012 budget should not have been balanced at the expense of public safety. Those vacancies should have been filled.”   …

    Cardenas is the aldermen who championed Chicago’s nickel-a-container tax on bottled water.He also proposed an anti-obesity plan to tax Chicago consumers of soda pop, energy drinks and other sugary beverages anywhere from 15 to 30 cents-a-contain to a penny-an-ounce.

    via SunTimes.

    How about we eliminate the TIFs and put all that money back into the general fund?  Then we’d have money for police, fire, and all kinds of other services.  Heck, we might even be able to fund the teachers’ pensions.

    Ald. Cardenas, we’re taxed to death already!  Enough.

  • Illinois Unemployment at 9.1%

    Unemployment across Illinois rose to 9.1 percent in August, the third straight month of increases in the state, the Illinois Department of Employment Security said Thursday. …

    Unemployment in July was 8.9 percent. Increases in the unemployment rate in June, July and August followed nine months of slow but steady declines. The federal government said earlier this month that the national unemployment rate dropped from 8.3 percent to 8.1, but the decrease was thought to primarily be driven by people dropping off unemployment rolls because they stopped looking for work.

    via Crain’s Chicago Business.

    Not a good sign.

    It’s time for Madigan, Rahm, Quinn, and the rest of the cabal to stop lining their own pockets and start balancing budgets and becoming a little more business friendly.

    Do anti-business people understand that  no businesses = no taxpayers.  No taxpayers = no tax revenue.  No tax revenue = no government jobs or services?

    Government in and of itself creates nothing of value.  It’s all done with other people’s money.  What about that is so hard to understand?

  • One Word for CPS Teachers: Save

    Save.

    Save as much money as you can.

    Live well below your means.

    The pension time-bomb is coming.

    One of the most vexing problems for Chicago and its teachers went virtually unmentioned during the strike: The pension fund is about to hit a wall.

    The Chicago Teachers’ Pension Fund has about $10 billion in assets, but is paying out more than $1 billion in benefits a year — much more than it has been taking in. That has forced it to sell investments, worth hundreds of millions of dollars a year, to pay retired teachers. Experts say the fund could collapse within a few years unless something is done.

    via NYTimes.com.

    and;

    “Each day we wait to enact comprehensive pension reform, the problem gets worse,” Quinn said in a statement. “The unfunded liability will grow to more than $92 billion by the end of next fiscal year. Illinois is currently on track to spend more on pensions than education by 2016 and that is unacceptable.
    — Pat Quinn

    via Des Plaines, IL Patch.

    If you think that taxpayers are going to fund your pensions, forget-about it.

    If you think you can tax the rich to fund your pensions, forget-about it.

    If you think that people are going to move into a community where their property taxes increase by 7% every year in order to fund failing schools, forget-about it.

    If you think you’re going to get your COLA every year, forget-about it.

    You have two options:  Save every nickel and dime you can, or plan to work until you’re in your 70’s.

    Consider:

    Illinois has an unfunded pension liability of at least $83 billion, according to state figures. It had 45 percent of what it needed to pay future retiree obligations as of 2010, the lowest among U.S. states, data compiled by Bloomberg show.  …

    Illinois had about $28 billion of general-obligation debt as of May 8, according to bond documents. The state of about 13 million people plans to sell $50 million of debt next month for technology projects, John Sinsheimer, the state’s director of capital markets, said in an interview.

    via Businessweek.

    Further:

    Illinois’s backlog of unpaid bills has risen to more than $9 billion because of pension costs and falling federal aid, leaving the state “essentially treading water,” Comptroller Judy Baar Topinka said.

    via Bloomberg.

    $83B + $28B + $9B = $120,000,000,000 in debt.  The extra $50 million at 0.42% of the total is a rounding error.  It should also be noted that this does not include the City of Chicago (or any other municipality or county debt) which is another $12-16 billion in debt depending on who you ask.

    12,869,257 people in the state of Illinois.  Every man, woman, and child owed owes $9,324.54 to the state.  If you live in Chicago you owe another 5,910.34 locally for total of $15,234.89.  (Are you feeling good about your new contract yet?)

    I was just looking over the FY2013 Illinois State Budget as prepared by Gov. Quinn.  On Pg 37 we’re told that Debt Service is 5.42% of all outlays.  That’s over $3.3B per year paying principle and interest on money we borrowed.  That’s $3.3B per year we could use to hire police officers, or teachers, or fully fund the pension funds but will instead go to pay for our bad fiscal decisions of the past.

    More importantly, total expenditures are $61.0B.  That means that if we (a/k/a the State of Illinois) completely stopped operating, fired all the employees, shuttered all the buildings, and spend 100% of the budget on paying off debt we’d be debt free in 2 years.

    Oh, I know what you’re going to say… You’re going to tell me all about how the Chicago Teachers’ Pension Fund is not as underwater as the general state fund.  True, but it’s still broke and broken.  And there’s no money to fix it.

    Then you’re going to say that this is a right guaranteed by the Illinois Constitution.  Oh ya?  Well where’s the money going to come from?  The rich?  You wish:

    When New Jersey governor Chris Christie heard British Prime Minister David Cameron invite France’s wealthy to decamp to England to escape a proposed 75% tax rate, he felt something akin to déjà vu. Every day top executives of Johnson & Johnson (JNJ), Merck (MRK), and other companies commute from their homes in Pennsylvania to offices in Christie’s state, saving roughly two-thirds on their state income tax bill — and costing New Jersey’s treasury $50 million, by one estimate.

    via Fortune (a/k/a CNN).

    You don’t understand the Laffer Curve.

    The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a “millionaire’s tax” pushed through by Gov. Martin O’Malley. The tax, which expired in 2010, in imposed a rate of 6.25 percent on incomes of more than $1 million a year.

    The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.

    via CNBC.

    You’re confused how a state and raise taxes and lose revenue.  It happens all the time.  I wrote a piece about cigarette taxes in Cook County; raised taxes, lost revenue.

    The more you tax something the less of it you get.

    You tax income, you get less income.  You tax babies, you get less babies.

    Even the left-loving Bono (of U2 fame) moves his wealth around to avoid taxes.

    In Illinois, if we quadrupled the state income tax on those with adjusted gross income over $500k it would take over 13 years just to get current state pension liabilities square.  This would not cover the additional debt of Chicago Teachers, Chicago Police & Fire, or any of the billions and billions of general debt.

    So take your 16% raise and start saving.  Save like your life depends on it.  Because it does.

  • CTU Deal Will Lead to School Closings & Layoffs

    Four years of up-to-the-limit property tax increases for Chicago homeowners and businesses. Closing scores of under-enrolled and underperforming schools. Thousands of layoffs of teachers and other school staff. More cuts to the central office.

    That’s what could await the Chicago Public Schools, thanks to the tentative agreement between teachers and the district that is expected to put an end to the five-day teachers strike.

    Civic Federation President Laurence Msall said the 16 percent pay raise included in the tentative agreement will almost certainly trigger massive layoffs and scores of school closings.

    via Chicago Sun-Times.

    Well Duh!

    This comes as a surprise to no one.  What did CTU think was going to happen when you have a broke and bankrupt system giving 16% raises to it’s staff?  You balance the budget by having less staff.

    This is just like the minimum wage discussion:  If the minimum wage was $25/hour there would be fewer people working… not more.  And the price of your hamburger and groceries would be 20-50% higher.

    When you artificially increase wages in the private sector you get inflation.  When you artificially increase wages in the public sector you get a bankrupt public sector.

  • Teachers’ Unions vs. Children

    When schoolchildren start paying union dues, that’s when I’ll start representing the interests of school children.
    — Albert Shanker, former president of the United Federation of Teachers

    I wrote about this before, how the truth is that CTU, WEAC, and all other teacher’s unions have a fiduciary duty to the union members.  The union cannot do anything which would advance the interests of non-members (i.e. children) to the detriment of the members (i.e. teachers.)

    This is a very simple legal principle that most educated people easily understand.

    Of course there’s the greater philosophical discussion that should take place as to whether of not unions of government employees are to anyone’s benefit.

    The process of collective bargaining, as usually understood, cannot be transplanted into the public service.
    — F.D. Roosevelt, in 1937 to the National Federation of Federal Employees

    The idea being that when private sector employees collectively bargain they can overplay their hand only to their own detriment as well and to the detriment of their employer.  Another company will be the beneficiary of the higher wages (and cost of goods/services) of the first.  This is not true in government where there is no competition.

    Anyone seeking more and more from the public coffers should be considered with extreme skepticism.

  • Illinois – 4th Worst Legal Climate for Business

    Illinois, along with California, Louisiana, Mississippi and West Virginia, are among the worst states in the country for businesses because of their legal climates, according to survey of corporate attorneys released Monday.

    Two Illinois counties did not fare well in the survey by the U.S. Chamber of Commerce’s institute for legal reform, either. Cook County was named the most unfair and unreasonable jurisdiction, and Madison County was named the sixth most unfair county.  …

    Illinois’ ranking this year, 46th among the 50 states in terms of the fairness of its litigation environment, compares with previous rankings of the 45th worst state in 2010 and the 46th worst in 2008.via Chicago Tribune.

    So we’ve been terrible; no one’s done anything about it so we’re still terrible.  I see.  Hey Gov. Quinn, Anybody home down there?

    We have the worst pensions in the country and and a unfair and unreasonable legal environment.  It’s no wonder that businesses don’t want to be here.

    Add to that mess that fact that:

    Chicago, the city that brought us deep-dish pizza, Oprah and “da Bears,” is also home to the nation’s highest tax burden for travelers.

    via Chicago Tribune.

    So if you’re a business here you know that it hard to do business with other businesses because it’s expensive to travel here.  This is also a huge burden on tourists… who used to come here in droves until downtown wildlings become common-place.

    Rahm has a full plate.  Maybe he should get busy trying to solve a few of these problems instead of non-stop fundraising for Obama.

  • Chicago Teachers Union: It’s About Children Greed

    According to the Chicago Tribune key issues separating Chicago Public Schools and the Chicago Teachers Union:

    SALARIES AND BENEFITS. The district offered 16 percent increase over four years and “modified step increases that both reward experience and provide better incentives for mid-career teachers.” The union said it’s closer on pay but is still concerned about rising health care costs and other benefits. Teachers sought a substantial raise in the contract’s first year because of the longer day and want to keep raises for experience.

    This is insane.  There is no one in the private sector who’s planning on seeing a 16% increase in their income over the next four years.  Plus these people make tons of money already!

    A Chicago Public Schools spokesperson said average pay for teachers, without benefits, is $76,000.

    via CBS Chicago.

    The average family in the city only earns $47,000 a year.  Considering a regular school term of 40 weeks, at 6.25 hours per day…. The way I figure that’s $76,000.00 / (6.25 * 200)  = $60.80 / hour.  Plus they get benefits — excellent benefits.

    So what we have is a group of people who on average make over $60/hour — the highest paid teachers in the nation — and are complaining about it.

    Next issue:

    JOB SECURITY. The union has pushed for a system to recall teachers who have been laid off when new openings occur. This has become important because of rumors the district plans to close up to 100 schools in coming years. The district says teachers displaced by school closings will be eligible for a job at new schools if there is a vacancy — or may elect to take a three-month severance.

    I got some news for the CTU:  CPS is dying.   For the second year in a row, CPS is taking the maximum possible increase to property taxes permitted by law.  Further, Chicago is shrinking and here.

    There is no job security when you’re product is crappy & overpriced.  People do not want to live in a place where they’re taxed to death to fund under-performing public schools.  At CPS just 15 percent of fourth graders are proficient in reading and only 56 percent of students who enter their freshman year of high school wind up graduating.  If you want job security you need to excel at what you do… not completely suck at it.

    Next Issue:

    TEACHER EVALUATIONS. The union wants to lower how much student performance contributes to evaluations. CPS has said the new evaluation system, created in collaboration with teachers, was negotiated and settled in March under state law.

    I happen to know a few people who are tight with a couple of principals in the CPS system.  The first things they will tell you is that it is impossible to get rid of a bad teacher.  Everyone knows this.  So to improve schools CPS and CTU sat down and came up with a system to evaluate teachers back in March.  Now, CTU has decided that it doesn’t like the system it already agreed to.

    Not only is the Teachers’ Union is specifically fighting to keep bad teachers in the classroom but it breaking a promise it already made.

    – – –

    The only possible explanation for all this is that CTU cares very very little about education.  There is no talk about reducing class sizes, getting new blackboards, reimbursement for further education, or improving safety in the schools.  Nope.  It’s all about money & clout.  Money & clout.  Protecting their own at all costs.

    CTU is nothing but a bunch of bullies.  Rahm should treat them as such.

  • Fioretti: 35 Member Council & Term Limits

    Alderman Robert Fioretti (2nd Ward) believes Chicago would do fine with just 35 aldermen instead of 50 — especially now that workers are handling garbage pickup and street cleaning on a system of ten “grids” instead of 50 wards.  …

    Besides a smaller City Council, Fioretti is calling for term limits. “Just look at the 2nd Ward and all we’ve done so far” in fewer than two terms, he said. “If they [aldermen] have got to stick around and wait years to get anything done, they should not be aldermen in the first place.”Fioretti admitted he probably has “made some waves” downtown with such “maverick” views.

    via Gazette Chicago.

    Indeed!!

  • Less Cops = Less (Reported) Crime

    In the city’s most violent districts, police officers say, they may be assigned half a dozen jobs or more—covering everything from traffic accidents to assaults—at the start of a shift. Their watches are spent racing from call to call, while anything that requires investigation stacks up. Officers describe having to weigh whether to make an arrest. The process “downs” their car, taking it off patrol for a few hours or so, which leaves their beat uncovered and puts more pressure on their fellow officers.

    Sometimes, they say, when it comes to minor offenses, they just look the other way.

    via Chicago magazine – August 2012.

    This is from a fairly long piece about Garry McCarthy but it’s this paragraph that struck me.

    In Chicago No Report = No Crime.  You have beat cops who are overworked / overloaded they and cannot focus on the little things.  So what happens?  They let some of the little things go because they have more important — higher priority — calls already waiting for them.  When this happens the little things don’t get reported.  It’s like the crimes never even happened.

    Of course Compstat is at the center of this.  It gives the Mayor and McCarthy the plausible ability to say things like, “Well overall crime is down.”