Budgets

  • Democracy elusive in Chicago public schools

    12 December 2013

    Interview with the Chicago Reader's Ben Joravsky on how moving special programs out of Lincoln Elementary could solve overcrowding, and more.

  • Detroit financial mess manufactured, says expert

    11 December 2013

    In a recent interview, a former Goldman Sachs investment banker said Detroit's financial crisis has been partially manufactured by financial institutions, and by their governmental and legal cohorts.

    The interview aired Saturday, December 7, 2013, on WNUR-FM's "This Is Hell." Host Chuck Mertz interviewed lawyer Wallace Turbeville.

    Turbeville described how Detroit's debt is overstated, why pensions aren’t the budget problem that many believe, and how the city’s emergency manager has, himself, created new emergencies.

    The raiding of Detroit's assets and of municipal employees' pensions provides a template for what could happen in other U.S. cities.

    Audio: Interview with Wallace Turbeville

  • A look at the mayor's budget proposal

    6 November 2013

    Interview with the Chicago Reader's Ben Joravsky on the city's budget "process," excerpted from an interview originally published on November 10, 2011.

  • Corporate subsidies shore up Cullerton's "no pension crisis" claim

    24 October 2013

    "I don't think you can use the word 'crisis' to describe" Illinois' pension-funding problem.

    So said Illinois Senate President John Cullerton on Sunday, Sept. 20, 2013, on WGN radio's "The Sunday Spin" show.

    Cullerton spoke of the pension fixes that the state legislature has considered this year, and still might pass. He estimated that those fixes, mostly in the form of cuts to pensioners' benefits, "will save annually anywhere from $750 million to $1.5 billion." However, Cullerton said, Illinois will lose about $5.4 billion in annual revenue when the state's personal and corporate income tax rates go down in 2015.

    A partial transcript of WGN's interview with Cullerton appears below.

    The Chicago Sun-Times, in an Oct. 23 editorial, called Cullerton's assessment "nonsense."

    If state legislators heed Cullerton, wrote the Sun-Times, Illinois will lose something "the state needs most—a bill that significantly reduces pension costs."

    In contrast, a recent report identifies a different source of states' budget woes: corporate tax subsidies.

    The report, written by David Sirota and published by the Institute for America's Future, says that "the amount states and cities spend on corporate subsidies and so-called tax expenditures is far more than the pension shortfalls they face."

    The report says that proponents of pension reductions claim "that cutting retiree benefits is the solution [to state revenue shortfalls] rather than simply rolling back the more expensive tax breaks and subsidies."

    According to data collected by The New York Times and cited in the report, Illinois governments spend at least $1.5 billion annually on tax subsidies, including:

       • $874 million in sales tax refunds, exemptions, or other sales tax discounts

       • $452 million in corporate income tax credits, rebates, or reductions

       • $11.9 million in personal income tax credits

    The Times analysis identified the four corporations receiving the largest subsidy amounts: Sears, Google, Archer Daniels Midland, and Chrysler.

              •           •           •

    Partial transcript of WGN Radio's interview of Illinois Senate President John Cullerton on Sept. 20, 2013

    [Sen. Cullerton said that he supported the pension reform bills passed earlier this year by the Illinois House and Senate, respectively. And he spoke optimistically of a proposed "compromise" bill currently under consideration by the legislature's bipartisan pension reform committee.]

    "It's not that we owe a hundred billion dollars to somebody right now. It's just that folks don't wanna put as much money into pensions. They'd rather spend it on something else. Or they'd rather have their taxes lowered.

    "And these pension bills that we're gonna vote on—and hopefully pass, and I'm supportive of it—the overall effect is gonna allow us to lower our income tax about a quarter of one percent. So if we pass the bill it'll be easier to lower our income tax by a quarter of one percent; if we don't, it'll be more difficult. And that's really what it's about.

    "Now, I wouldn't call that a crisis. I think that people should put that in perspective."

    "[The current income tax rate is] 5 percent for individuals, going to 3.75 [percent in 2015], and the corporate is 7, it goes to [5.25]. That, on an annual basis, is a drop in revenues of about $5.38 billion . . . and these pension bills that we've talked about will save annually anywhere from $750 million to [$1.5 billion]. So you're still gonna have real huge cuts we'll have to make if we don't raise that income tax higher than what they're scheduled to go down to.

    "The pension reform, then, is about tax reduction, not about the solvency of the pension fund or about diverting money to spend more money on education."

    "There's a great, strong feeling out there in the general public. Ya know, there's 720,000 folks that are affected by the pensions—both retirees [and] actives. That's all of the teachers outside Chicago, that's all the university employees and community college employees, and all the state employees and the judges and the General Assembly. But there's, ya know, almost 13 million people here [in Illinois]. And a lot of folks don't have a defined benefit plan as we do. And, by the way, the inflation rate now is [1.5] percent; these pension [benefits are increased annually by] 3 percent. So there's a strong argument to lower these benefits—that's why I've supported this legislation.

    "But just keep in mind: It's not going bankrupt. The money that we save by lowering those benefits is gonna be used to lower the tax rates.

    "This would surprise people, I guess: We have a balanced budget in Illinois. Nobody would know that, right? We are not spending more money during this budget than we have taken in. We passed a budget that says you can only spend this much money and this is the amount of money that we take in."

    "Let's talk about [the state's unpaid bills.] Within that budget we include money to pay down old bills, including pension obligation bonds that we borrowed—and thank god we did—for the two years we were in the recession. Because we borrowed money, we put it in the pension fund, we've earned 800 million more than what the interest rate has been.

    "But we're also paying down bills to vendors. We've paid down [$3.5 billion] in the last three years, and by the time we get to the end of this fiscal year, we'll have about [$2.5 billion] in bills over 60 days out of a $71 billion budget. So we've made tremendous progress in that.

    "Remember, just like anybody's home budget, they have to pay mortgage, they have to pay student loans . . . they don't pay 'em all off in the first year. But they keep on including in their budget enough to pay what they owe. That's what we've been doing."

    "Businesses are not fleeing Illinois because our taxes are so high. The fact is that our state tax rate is lower than all the other states that surround us, and almost about the same as Indiana."

  • Just how many Metra investigations are we paying for?

    26 August 2013
    Leading up to and in the wake of Metra executive director Alex Clifford's resignation in June of 2013, a number of public and private bodies investigated or are investigating Metra. All of these efforts are being paid for by taxpayers and Metra riders. Here's a rundown.
  • How I spent my summer break: firing teachers

    15 August 2013

    Interview with the Chicago Reader's Ben Joravsky on the mayor using school principals as propaganda show ponies, and more.

  • Deciphering the city's “20 percent” surplus

    6 August 2013
    In my 7/25/13 interview with Ben Joravsky, we couldn't bring clarity to a statement that appeared in a 7/23/13 Sun-Times editorial ("TIF cash only a start for CPS"):

    The city estimates a surplus this year (half of which goes to the schools) may yield only $10 million for CPS, but it could be larger. It all depends on how carefully the city scrubs each TIF—determining how many dollars are already spoken for and how many aren’t—and what percentage is counted as surplus. The city currently uses 20 percent.


    The city uses 20 percent of what, for what?

    The answer came in another Sun-Times editorial, this one on 8/4/13 ("A small lifeline for our schools"):

    . . . the city historically allows only 20 percent of uncommitted cash to count as surplus. City Budget Director Alex Holt told us last week that 20 percent was "probably the starting point" this year.


    In other words: Of each year's budget surplus for which the city has no plans, the city's been able but unwilling to spend four-fifths of it.

  • How Chicago's five-year school plan was dead on arrival

    27 June 2013

    Interview with the Chicago Reader's Ben Joravsky on why CPS's tax levy has increased while it cuts its budget, and more.

  • Hard cuts for neighborhood schools

    21 June 2013
    Neighborhood public schools will see drastic budget cuts for the coming school year, reports the Sun-Times.
  • The Public Weighs in While the Mayor Skips Out

    1 November 2012

    Interview with the Chicago Reader's Ben Joravsky on how and why ward remapping disposes of certain aldermen, and more.

  • The Stand-Up Guy

    26 April 2012

    Interview with the Chicago Reader's Ben Joravsky on who voted against the mayor's proposed infrastructure trust and why, and more.

  • The Mayor Has Big Plans for the City's Infrastructure Trust

    12 April 2012

    Interview with the Chicago Reader's Ben Joravsky on whether the proposed infrastructure trust must actually comply with Freedom of Information Act regulations, and more.

  • All I Want for Christmas Is a City Council with a Backbone

    15 December 2011

    Interview with the Chicago Reader's Ben Joravsky on veteran aldermen who might not have voted for the mayor's budget proposal, and more.

  • As Mayor Emanuel Cuts, His Hometown Shows How to Invest in a Library

    24 November 2011

    Interview with the Chicago Reader's Ben Joravsky on how Ben justifies a comparison of Wilmette and Rogers Park, and more.

  • Water + Sewers = Slush Fund

    10 November 2011

    Interview with the Chicago Reader's Ben Joravsky on a beginner's guide to the city's budget document, and more.

  • What to Tell an Alderman Who Fibs to You About TIF

    27 October 2011

    imagenameInterview with the Chicago Reader's Ben Joravsky on the first step for true reform of the city's budget process, and more.

  • Mayor Emanuel May Be Breaking Budget Promises, but at Least He's Not Mayor What's-His-Name

    8 September 2011

    Interview with the Chicago Reader's Ben Joravsky on why Mayor Emanuel's tax-increment financing reform doesn't constitute reform, and more.

  • Public schools, private budgets

    21 July 2011
    Interview with the Chicago Reader's Ben Joravsky on the disparity in availability of charter vs. neighborhood school financial data, and more.

  • Go On, Smash It

    19 August 2010

    piggy-bankInterview with the Chicago Reader's Ben Joravsky on whether the Daley administration's really lied about tax-increment financing, and more.

  • The Vanishing Beat Cop

    12 August 2010

    Interview with the Chicago Reader's Ben Joravsky about the effects of crime cameras on policing, and more.

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