Rahm's budget speech filled with whoppers and half-truths | On Politics | Chicago Reader

Rahm's budget speech filled with whoppers and half-truths 

The mayor did what he does best: avoid reality and praise himself.

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click to enlarge If Emanuel really was ridding Chicago of “fiscal smoke and mirrors” he’d be looking for more progressive forms of taxation that would enable the city to borrow less money.

If Emanuel really was ridding Chicago of “fiscal smoke and mirrors” he’d be looking for more progressive forms of taxation that would enable the city to borrow less money.

Rich Hein/Sun-Times Media

It's just a coincidence that Happy Death Day hit movie theaters not long before Mayor Rahm Emanuel unveiled his 2018 budget with a big speech before the City Council. The film is a grisly Groundhog Day in which a college student wakes up over and over again to the same day that culminates in her getting murdered. Her challenge is to decipher the murderer's identity and kill him before he kills her again.

In the equally horrifying Happy Rahm Day, the mayor heads over to the City Council this time each year to give a budget speech in which he basically says: I'm great. My predecessor was lousy. Feel free to thank me anytime! Clearly, every day is Happy Rahm Day as far as the mayor's concerned.

There's not enough space in one column to chronicle all of Rahm's whoppers and half-truths from his October 18 budget speech. I'd like to point out a couple of the biggest ones.

"This year, Chicago made lasting and historic progress in Springfield," the mayor said. "The dawn of a day for Chicago students has just begun."

In this passage Emanuel's referring to the school aid distribution bill, signed last month by his new best friend, Illinois governor Bruce Rauner, which brings roughly $200 million a year to help Chicago pay its teacher pension bills. So that's good.

What the mayor conveniently failed to mention is that Rauner agreed to sign the bill only after strong-arming Democrats into agreeing to a provision that allows rich people to get a tax credit for donating up to $1 million a year to scholarship funds for religious and other private schools. The wealthy sending their money to private schools is great if the desired result is starving the government. Democrats protested that the tax credit would further deplete the public schools. But Rauner said he wouldn't sign the school funding bill without the tax credit. And so the Dems went along.

My bet is that Rauner will only demand that more money be earmarked for tax credits, should he be reelected next year. As state rep. Will Guzzardi put it, "As far as I'm concerned the nose is under the camel's tent now, and I'm very concerned about the prospect of this money only growing, and more and more over the years of our public dollars being diverted away."

In short, this was beyond compromise—it was budget blackmail, hardly, something we should be celebrating.

In his speech, Emanuel also pronounced that "the days of fiscal smoke and mirrors are behind us. The days of selling off assets to balance the budget and pay Chicago's bills are behind us. The days of raiding the rainy-day fund to keep the city afloat are behind us."

He was referring, in part, to the dreaded 2008 parking meter sale, in which the city received about $1 billion up front by agreeing to turn over as much as $10 billion in parking meter proceeds over the next 75 years to a group of investors put together by Morgan Stanley.

Ironically, Rahm's budget speech came just a week after he convinced the City Council to approve, 43-5, something known as the sales tax securitization plan. This program earmarks the sales taxes Chicago collects each year (about $661 million) for a fund that will be used to pay back the loans the city borrows for various obligations. For lenders, the securitization plan is great because it guarantees they'll get paid back even if the city goes bankrupt—always a possibility around here. Emanuel argues that dedicating sales taxes to Chicago's creditors will lower interest and save the city money on borrowing costs.

"What we are seeking to do today is to take a public asset—sales tax receipts—and turn that over for 40 years to Wall Street, to the banks," said 35th Ward alderman Carlos Ramirez- Rosa, who voted against the measure. "We are setting ourselves up for a long-term loss for a short-term gain. When we privatized the parking meters, yes, we got a lot of money. And if we move forward with this, we'll get a $3 billion credit line. But we will lose $660 million per year in sales tax receipts."

Of course, if Emanuel really was ridding Chicago of "fiscal smoke and mirrors" he'd be looking for more progressive forms of taxation that would enable us to borrow less money and not have to turn over the sales tax receipts to Wall Street in the first place.

Obviously, the mayor is not quite ready for progressive taxation. In any event, he just sold off an asset in the name of never selling off assets to balance the budget again.

The mayor also spent a good chunk of his speech praising himself for making tremendous progress with the Chicago Public Schools. (Speaking of municipal entities using fiscal smoke and mirrors to pretend its books are balanced!) "Chicago's education system," he said, "has gone from a national laggard to a national leader."

Coincidentally, parent activists from the Raise Your Hand Coalition held a press conference at City Hall a few hours before the speech to demand that the mayor's handpicked schools CEO, Forrest Claypool, be fired for making cuts in special education.

Claypool's been in the news lately for denying he's making school cuts even as he whacks away.

WBEZ recently published a piece by reporter Sarah Karp documenting that CPS had spent about $14 million to pay consultants from the accounting firms of Crowe Horwath, PricewaterhouseCoopers, and KPMG to effectively make it harder for kids to get into special education classes.

That way CPS gets to spend less money on special education teachers and more money on high-priced consultants. It's like they're taking money from the poorest, most vulnerable kids in the system to devise new schemes to take even more money from them. Man, if CPS is a national leader, as Rahm says, I feel bad for kids around the country.

Not surprisingly, the mayor made no mention of Karp or her report in his budget address.

He also made no mention of his romance with Amazon. He and Rauner have pledged to hand over untold hundreds of millions of public dollars to one of the world's largest corporations in hopes of convincing Jeff Bezos, its billionaire CEO, to open a second headquarters here.

Hmmm . . . money for billionaires while the public schools look for ways to cut special education. Doesn't look like the dawn of a new day—just life as usual in Rahm's Chicago.   v

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