Posted tagged ‘TIF money’

J.P. Morgan Chase Anounces Plans to Launder Tax Payer Money

May 5, 2010

The Chicago Public Schools are facing a financial crisis.  Now, all the evidence points to this being a largely manufactured crisis to pry concessions from their employees and dollars from the state.  One thing is certain and that is that $250 million dollars that should be going to the Chicago Public Schools have been siphoned off this year from property taxes for Mayor Daley’s TIF fund.  This fund is basically his personal nest egg to spend where he sees fit.

One of the beneficiaries of this program is J.P. Morgan Chase.  Now, the use of the TIF fund is generally kept hush hush, but in December of last year, the developer of the $100 million Cabrini-Green redevelopment found himself unable to pay back a construction loan from J.P. Morgan Chase and the city came to the rescue so that he would not have to default on the loan.   The amount that J.P. Morgan Chase made on this deal was in excess of $8,000,000.

J.P. Morgan Chase, which is no stranger to corporate welfare has partnered with the city on a large number of projects using TIF funds and has benefited enormously.  Whether we’re talking about the $50 million Wilson Yard Project or sweetheart deals with individual alderman.   The big question though is what is J.P. Morgan Chase doing with that money that should have been directed to public school students in Chicago?  I’m glad you asked.

Today, J.P. Morgan Chase announced that they would be setting up a $325 million dollar program to fund charter schools.  In the ultimate indignity, public school students are now subsidizing charter schools with J.P. Morgan Chase basically serving as middle man.   With up to 300,000 public school teachers expected to lose their jobs next year and many others making big salary concessions it may be very tempting to live off the credit card a little.   If you are a teacher and you do have to do that, I just hope it’s not a Chase credit card.


Solving Chicago’s Billion Dollar School Debt

February 28, 2010

The French Market benefited greatly from TIF money

About a decade ago, my financial outlook was really bleak.  I had gone back to school and financed a middle class lifestyle on a part-time retail job selling comic books and credit cards.   The result was between student loans and credit, I owed about $36,000.   I dug my way out of the big hole in a couple of ways.  I traded in a life insurance policy that was no longer needed and picked up a quick $4,000 that was immediately spent paying down the debt.  I stopped using my credit card and I paid cash for everything.  I set a budget for everything I spent and I started saving for things a year ahead of time.   Christmas savings began December 26th and I was able to cover vacations and big expenses without using the credit card.  I brought down my debt despite paying for a master’s degree because I really took a look at my books and saw where I was wasting money.   That was the key to spending cash.

There’s now a big battle brewing in Chicago because Ron Huberman has announced that the schools are nearly a billion dollars in debt.   Teachers are outraged because this story is right on the tail of a Tribune report showing that Huberman had not one, but two company cars.   Taxpayers are outraged because they feel that the district went into debt paying for the teachers.  They’re both wrong.

Thanks to Renaissance 2010 and the inept inaction of the Chicago Teacher’s Union’s Marilyn Stewart administration, there are now less than 30,000 members in the Chicago Teacher’s union.   That means if every teacher in the city took a $30,000 pay cut you still couldn’t pay off the debt.  There’s also the issue of pension.  As the Tribune put it, “The pension’s status is the result of many factors. A steep market decline, a large chunk of new retirees and years of the district making no contribution at all have left it about 74 percent funded. State law requires the pension to be funded at 90 percent, and the district is now facing steep payment increases to catch up.”

It’s hard to blame pension costs for the budget when you haven’t been paying your contribution.  Likewise, Ron Huberman doesn’t have a one billion dollar car.   What he does have is an awful lot of people that he brought over from the CTA that he is now paying over $120,000 a year too.   Bureaucratic waste has skyrocketed during the Huberman administration.

Ben Jovarsky from Chicago’s best investigative newspaper The Reader comes up with much better places for the budget axe to fall, “Huberman and his aides also might want to look at cutting back on contracts to outside vendors (about $696.6 million has been set aside for that) and trimming a few of the extraneous central office divisions, like the Office of Autonomy. I’m not sure who it’s autonomous from—certainly not Huberman or Mayor Daley—but it has seven employees and an annual budget of $1.4 million.   …. And then of course there are the …TIF slush funds controlled by the mayor, which aren’t itemized on property tax bills. Last year alone, the TIFs siphoned about $250 million in property tax dollars out of CPS’s supposed share.”

So assuming Huberman could cut 30% of the budget on outside contractors and the central office tightens its staffing and Daley gives back the TIF money I think we can safely project about $500,000 in savings.   The rest can come from one simple item in the budget.   As CORE member Xian Barrett pointed out when speaking to Operation PUSH this year, “Look at CPS’ own budget which this year boasts a $422 million increase in ‘Other Charges’.”

Of course this is Chicago we’re talking about.   The latest rumor I heard was that they would ask teachers to work 15 days without pay and give them one week of paid vacation instead of two.   This is basically a 10% salary cut.  A 10% salary cut should cover about half of the money that Daley has deprived the schools of through his TIF scheme.  How has that money been used?  According to Jovarsky, “n recent years, the CDC has approved $35 million in TIF money to help United Airlines move into new offices downtown, $6 million to help MillerCoors do the same, $8 million to lure the French Market to the Ogilvie Transportation Center.”  I guess a city needs to have priorities.