Chicago Mayor Rahm Emanuel Cuts Schools, Pensions While Preserving Fund For Corporate Subsidies
Months after Chicago Mayor Rahm Emanuel said budget constraints forced him to push for pension cuts and mass school closures, an analysis of government documents reveals the city has $1.71 billion in special accounts often used to finance corporate subsidies. While the Emanuel administration has rejected open records requests for details of the subsidies, evidence suggests at least some of them have flowed to companies connected to Emanuel’s campaign donors.
The analysis conducted by the TIF Illumination Project evaluated the city’s 151 tax increment financing, or TIF, districts, which divert a share of property taxes out of accounts obligated to schools and into special accounts under the mayor’s control.
The report shows $412 million was diverted last year alone into the TIF accounts and out of traditional property tax funding streams, many of which are dedicated to the city's schools. In 21 of those districts, the report says 90 percent or more of all property taxes were diverted into the TIF accounts.
Citing Chicago subsidies offered to S&C Electric Co., LaSalle Street Capital, United Airlines and the Chicago Mercantile Exchange, an earlier study from the taxpayer watchdog group Good Jobs First found in the last 25 years, $5.5 billion of taxpayer money has gone into TIF accounts, and “much of the city’s TIF revenue was spent on subsidizing corporations, nonprofits and developers.” The amount of money diverted into TIFs has exploded in the last decade, and transparency advocates say under Emanuel, TIF projects have been shrouded in more secrecy than ever.
In its annual budget, the Emanuel administration defends the TIF programs, saying their goal is “promoting business, industrial and residential development in areas of the city that struggled to attract or retain housing, jobs or commercial activity.” The administration further argues the money is needed “for community projects, public improvements and incentives to attract private investment to the area.”
The latter argument has been used by Emanuel to spend hundreds of millions of TIF dollars on corporate development deals in some of the city's wealthiest neighborhoods. The rationale echoes the claims made in places like New Jersey, Detroit and Miami where lawmakers have been simultaneously slashing public services and municipal workers’ pensions and using the savings to expand taxpayer subsidies to corporations. Those subsidies have supported everything from arenas and NBA practice facilities, to corporate office towers and shopping malls -- and the subsidy recipients have often been major political donors.
With Chicago's high-profile shootings and nation-leading murder rate reigniting scrutiny of Emanuel's austerity budget policies for the city's police department, Chicago Mayor Rahm Emanuel Cuts Schools, Pensions While Preserving Fund For Corporate Subsidies:
