The answer to the riddle above isn’t “a newspaper” but Chicago’s budget. The editors of the Chicago Tribune in anticipation of Mayor Lightfoot’s upcoming State of the City give her the following helpful advice:
- Don’t borrow more.
- Cut spending.
Going hard at city expenses to balance the budget is the responsible strategy. Virtually every city operation will need to be vetted and then trimmed or restructured. Beyond core services, every program Chicago government provides will need to be justified or eliminated. Shrinking budgets and killing popular if unessential programs isn’t fun work for politicians. But it’s crucial and will give the mayor credibility. In tandem — provided she delivers the belt-tightening — Lightfoot can make her second ask: to raise taxes and fees.
- Get pension reform from Springfield.
There are longer term fixes to pursue. Among them, the mayor can go to Springfield and ring the bell for pension reform. In Rahm Emanuel’s waning days in City Hall, he got on board with the idea of amending the Illinois Constitution’s pension clause to allow changes to government retirement benefits. He came to understand that there’s no viable alternative.
Lightfoot has said she wants to protect the pension benefits city workers have earned. So do we all. But that doesn’t preclude a constitutional reform that would let City Hall limit pension benefits those workers earn in the future.
What remains unmentioned in the editorial is that Chicago’s population is declining. That Chicago cop in 1985 had three million people to support his pension. Now he has 2.5 million and the 2020 decennial census may reveal that it’s a lot lower than that. Don’t be shocked if Chicago’s population has fallen below 2 million. That means a lot less sales tax and fees than when there were 3 million Chicagoans. Making it up by raising property taxes is a mug’s game. High property taxes is one of the reasons they’re leaving.
Chicago’s teachers, police officers, and firefighters are all working under contracts up for renegotiation and it is not unreasonable to assume that they will want raises that the city simply cannot afford. The new mayor will be tested.
I seem to recall that Chicago sends out more in state taxes than it receives back from the state. Assuming I remember correctly, a dangerous assumption, is there any chance of getting some of that back from the state?
Steve
I usually point out that when you exclude the GSP attributable to Chicago and its “collar counties” the per capita GSP of Illinois is about the same as Mississippi’s.
The state legislature has shown little interest in giving Chicago a hand. The aggravating factor is that citizens of the city of Chicago pay for the pensions of Chicago’s teachers and the pensions of teachers outside of Chicago via the state tax they pay while the reverse is not the case.
The new mayor needs to have a nice talk with the Madigans. If she makes it worth their while, I’m sure Dad would be able to strong-arm the legislature and the governor into providing Chicago enough assistance to at least see her through her first term.
“I seem to recall that Chicago sends out more in state taxes than it receives back from the state. Assuming I remember correctly, a dangerous assumption, is there any chance of getting some of that back from the state?â€
“The aggravating factor is that citizens of the city of Chicago pay for the pensions of Chicago’s teachers and the pensions of teachers outside of Chicago via the state tax they pay while the reverse is not the case.â€
Heh. Welcome to the party. Now you know how aggravating it is to pay more in taxes, sometimes in one year, than someone else does in a lifetime, yet be berated for not paying your “fair share.†Or worse, being berated as a greedy no good SOB for not paying even more.
Being your neighbors plow horse is over rated.
The only tax for which that could not be true is a head tax. Prior to the adoption of the 16th Amendment that is what the federal government could legally impose.
If limited to a head tax the federal government could not support a modern standing army, people doing food inspection, a Food and Drug Administration, or the federal courts.
A flat tax (one in which everyone pays the same percentage of income) able to support a modern regulatory state and some base-level entitlements, e.g. Social Security, would need to be high enough that many of the highest income earners would actually pay more than they do now.
My point here is not that we’re stuck with the system as it is but that it is quite difficult to construct a tax system able to generate enough revenue to pay for the things we really need and remain fair. It would be easier in a more egalitarian society but that’s even harder to maintain.
Well, there’s that sports gaming windfall coming your way, but I suppose the tax is at state level.