Municipal Finances

Chicago’s finances are broken. An honest conversation about fixing our finances has to include new sources of revenue. We also must recognize that we cannot tax our way out of this problem. Burdensome fines, fees and taxes are contributing to a cycle of relocation from our city. New sources of revenue will provide some breathing room to allow us to govern and grow our way out of this.

Pension Governance

  • The pension crisis has two, related, components: there are insufficient assets available in the fund  and the liabilities are increasing. Without a solution, liabilities will continue to increase at a greater pace than their assets. Educating the public about the problem and the potential solutions, as well as complete transparency in implementing solutions, are cornerstones of our fiscal agenda.
  • Using the City’s own numbers, the required combined pension contributions to the City’s four retirement funds (excluding CPS) grows from $1.184 billion in 2019 to $2.130 billion in fiscal year 2023. Our priority needs to be paying down these obligations to lower the cost of borrowing and to give Chicago breathing room to govern and grow our way out of this financial crisis.

Generating Revenue

  • We cannot solve our financial problems on the backs of residential property owners. This means identifying new sources of revenue and creative financing solutions. This includes:
Marijuana Legalization 
  • The inevitability of recreational marijuana legalization is an opportunity for a new stream of revenue. It is important for the City of Chicago to have a seat at the negotiating table to ensure the City gets its fair share of revenue. The Governor and the State Legislature have made it clear they will legalize recreational marijuana. I would direct any portion of the revenue to paying down unfunded pension liabilities.
Publicly-Owned Casino
  • A publicly-owned casino has the potential to bring in more than a billion dollars to the City in annual revenue. This would allow Chicago to capture revenue now going to nearby states and cities.
  • Establishing a casino owned by the City or an entity created for the benefit of the pension funds would require State legislation, and with the enactment of the new legislation Chicago would be in a position to earmark all revenue generated by the casino to paying down the unfunded pension liability.
  • To make the most of this new economic generator, the casino should be sited in an area that could support an entire entertainment district — potentially, the South Works Steel property. The redevelopment of the South Works site could include a sport complex, a concert venue, a water park and hotels with the capability of future expansion. Additionally, as part of the larger development, the entertainment complex could partner with the Great Lakes Cruising Coalition to take advantage of cruising on the Great Lakes.
Sports Betting
  • The U.S. Supreme Court recently decided that sports betting is permitted in all 50 states. I will take advantage of this ruling and work to make sure Chicago profits from this new stream of revenue.
Passenger Facility Charge
  • An increase in the cap on the passenger facility charge at Chicago airports could generate upwards of $200 million. This additional revenue would require amending federal law. If successful, revenue generated from the increase will be dedicated to paying down the pension obligation, and would sunset after a time certain.
Third Airport
  • Supporting the proposed third airport should be explored as a way to generate new revenue for Chicago.
Fire and Police Academy
  • The current proposal for the new Police and Fire Academy completely ignores the fiscal health of the City. The City should explore re-purposing existing buildings for police training and the academy. We should wait until the City is on more stable financial footing before revisiting the prospect of constructing and opening a new $100 million facility.
  • Rather than construct the proposed new police and fire academy at the current $100 million price tag, I have identified five of the remaining 37 vacant Chicago Public School buildings that can be re-purposed and retrofitted for police and fire training. This proposal will spur economic development and is fiscally responsible
  • If implemented, the City could save up to $100 million from construction costs and an estimated $400,000 in annual costs currently associated with maintaining these buildings.  The proposed school sites were selected because they are located within the newly-established Federal Opportunity Zones — a federal program that provides tax incentives to spur investment.
  • This plan will benefit public safety, serve as a catalyst for additional investment and spark revitalization efforts in historically economically-depressed and neglected communities.
Inventory of City Assets 
  • An inventory of all City-owned assets should be conducted and an analysis of the possible non-permanent transfer of any of those assets into the pension funds or into an entity established for the benefit of the pension funds.
Federal Assistance
  • To deal with the pension crisis, the new mayor must seek federal assistance.  The federal government has bailed out several banks and financial institutions during the financial crisis. That same financial crisis contributed to the City’s current pension crisis.
  • We must seek, among other things, a long-term, low-interest loan and the backing of the full faith and credit of the United States Treasury for the City’s debt.
Parking Meter Deal
  • The parking meter deal must be aggressively challenged, We must do everything we can to bring stakeholders back to the table to renegotiate this boondoggle.

TIF Reform

  • TIFs can be a valuable tool in funding construction or development projects – and to this end, they should continue to be used. The use of TIF revenues for specific projects which, in turn, increase property tax receipts is smart fiscal policy. However, if TIF districts are used to hijack money from other revenue-strapped arms of the government and are under the radar of most taxpayers, the program becomes unfair and unwise.
  • The City has not published a comprehensive policy to govern the establishment of TIF districts and oversight of TIF expenditures. Moreover, taxpayers have not been provided with an easy means to access information about the TIF process or to evaluate the performance of the City’s TIF investments.
  • The City’s TIF program needs to be reviewed from top-to-bottom to ensure affected communities are properly involved, appropriate controls are in place and money from taxing bodies are properly being diverted to help under-served constituents and communities.
  • Because of the lack of transparency in the TIF program, I propose a moratorium on all TIF-related matters until the completion of a full-scale review that results in new rules that ensure transparency and accountability.