It’s not every day that I read American Banker, but then again, not every day does a story involving Mayor Rahm Emanuel, the trial of President Donald Trump confidant Paul Manafort and a Chicago bank CEO pop up.
And, to be honest, I don’t even care about the Manafort part. The real bombshell are the shamefully creative ways that Chicago’s mayor shovels cash to the connected at the same time he cuts funding for schools, mental health facilities and city services for the rest of us.
This particular Chicago bank CEO, Steven Calk, received $3.6 million in tax increment financing (TIF) funds from Emanuel for creating “new” jobs. In effect, Calk received the money for laying off people from a bank he was closing and hiring them at a new bank he was building. Naturally, the mayor took this opportunity to crow at a press conference—as is his style—about all the new jobs he and the bank were creating.
The problem is that at the same time this TIF scam effectively shoveled risk-free profits to a wealthy CEO, Emanuel had just closed six of Chicago’s twelve mental health clinics, thereby putting thousands of the city’s most vulnerable citizens at risk. The value of those cuts was $3 million. And the article notes another important point: Rahm’s elimination of a corporate head tax to save large corporations $23 million a year. This occurred in a city where hundreds of schools had no librarian. That annual head tax, already too low, would have meant more than a room full of books for 230 Chicago public schools.
To add insult to injury, Emanuel rushed payment of part of the grant so that the Federal Savings Bank could book the money by the end of the year and top a list of “most profitable banks.” In contrast, the mayor has slow walked a program to create sustainable community schools that would provide physical and mental health care, language classes, and other vital wraparound supports to students and families at 20 schools across the city, even though this highly successful strategy is already used in dozens of other school districts across the country.
This article is a cautionary tale about the unaccountable, inequitable and race-to-the-bottom nature of Chicago’s corporate subsidies. The rich and connected keep winning, and everyone else has to pick up the tab. It’s time we take a different path and invest in communities throughout the city.
We need a corporate head tax that ensures Chicago’s elite, who just received massive Trump tax cuts, pay their fair share locally. We need an automatic TIF surplus that routes money to the city to develop job programs in neighborhoods with high unemployment and schools in need of lower class sizes—especially since those TIF hauls skyrocket with property reassessments and higher property taxes. The Chicago Tribune recently reported that a record $660 million in tax revenue will be generated in the 2017 tax year from 143 TIFs controlled by the mayor and his City Council. Nearly half of that money goes to wealthy Chicago neighborhoods, which coincides with a proposed Chicago Public Schools budget that disproportionately favors North Side neighborhoods and again shortchanges South and West Side schools.
We need community benefit agreements as a condition of any city subsidies of private projects like the Barack Obama Presidential Center. Finally, we need to end corporate welfare handouts like the windfall of cash for Amazon. Jeff Bezos doesn’t need it; he’s the wealthiest man in the world. We could use that money instead to hire Chicago residents to build affordable housing for the thousands of families in our city who need it.
That’s one press conference where the mayor could actually take credit for creating jobs.