The Vise

Unfortunately, Michael Barone’s post at RealClearPolitics on Chicago Mayor Rahm Emanuel’s decision not to seek re-election isn’t news for anyone who’s been following Chicago politics. It is remarkably lacking in insight.

As to his assertion that Rahm Emanuel has “done it all” the operative definition of “all” must be raising money and strategizing elections because otherwise his accomplishments are quite thin. He was a lackluster Congressman—the only Congressional representative I’ve ever had who sent me a form letter in response to a constituent letter. As mayor he’s been worse than lackluster.

Let me try to fill in some of the blanks. Illinoisans pay the highest property taxes in the country. Chicagoans pay the highest sales taxes in the country. The man likely to be Illinois’s next governor is running on a platform of increasing the state’s income tax and imposing a graduated income tax. That will require a constitutional amendment.

I challenge Mr. Pritzker to acquire commitments from state legislators to vote in favor of his amendment in anticipation of the upcoming elections. IMO there’s no chance of enacting such an amendment.

To understand the problem with increasing taxes as a strategy for pulling Illinois’s onions out of the fire, Illinois’s population is already decreasing and the median income of those leaving is notably higher than the median income of those remaining. I’d like to see some hard numbers and some credible projections from the Pritzker campaign. It’s not clear to me Illinois can actually derive an increase in tax revenues by increasing the income tax at this point. 4% of something is better than 6% of nothing.

Borrowing is no solution, either. We’re borrowing to pay operating expenses, always a desperation move, the more we borrow the more we pay to borrow and that debt will be serviced by fewer taxpayers than there are now.

Illinois’s basic problems are that the Democrats have complete control over the state government with or without the governor’s mansion, the Republicans are supine, our problems can’t be solved by increasing taxes, and Democratic legislators recognize that they can’t make the reforms the state needs without antagonizing the constituencies they need to win elections.

We’re caught in a vise and I don’t see how anything short of disaster will release it.

2 comments… add one
  • Gray Shambler

    What does “disaster” look like? The Federal Government has run a deficit all my adult life, less four fiscal years, since 1970, increasing almost geometrically. Leave out WWII and the great recession, (maybe), it was never necessary. Despite warnings of doom and gloom, the debt defies gravity.
    I know Chicago is a different case, not having their own currency, but still it seems new funding is found through longer term bonds, higher interest rates, higher taxes, which, as you say have negative consequences, but still they will raise them. So, wheres the end? Is Detroit the model? Sell city parks, privatize city services. If police, fire, ambulance, teachers pensions cannot be renegotiated maybe they need to privatize the services. Or just go on swimming upstream, losing ground, until your four years is up.

  • Basically, there is no strategy for coping with major decreases in a city’s population. Chicago and Illinois are very nearly at the end of the borrowing rope. We pay a higher rate of interest to borrow than any other major city in the country and there isn’t much farther to go before the city won’t be able to raise money by borrowing at all.

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