Progress Illinois

This past spring, a new $16 million system implemented by the Chicago Department of Public Health (CDPH) turned out to be so flawed that patient mental health bills weren’t submitted to the state for six months in 2008. This so-called "glitch" led to a loss of more than $1million in state funding and almost resulted in the closure down four clinics on the city's South Side.  Back in July we took Daley administration officials at their word when they said that the problems were fixed.

Big mistake.

During the ongoing city budget hearings yesterday, it was revealed that the system is still not working properly. Outgoing CDPH chief Terry Mason told aldermen that fixing the $16 million Cerner system -- which was supposed to represent an upgrade -- remains "an active process."

To his credit, Ald. Rick Munoz (22nd Ward) pressed him on the matter: "You're saying that after 18 months you're unable to work out technical glitches that prevent us from billing the state?" "That is correct," Mason responded.

Budget Committee Chair Ald. Carrie Austin (34th Ward) assured Munoz that the Cerner system would be fixed within "months."

"Months?" Munoz asked.  Austin replied that she couldn't offer a "specific date."

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Is accountability so sparse in the Chicago Police Department that even a recommendation by the superintendent isn't enough to get an officer fired by the Chicago Police Board? Based on the latest research (PDF) by the non-profit Chicago Justice Project (CJP), it seems so. Here's what the organization examined in their report:

[T]he Chicago Justice Project (CJP) examined ten years of the Board’s decisions in cases for which the Superintendent of the Chicago Police Department sought the termination of either sworn officers or civilian employees. We included the cases involving civilian employees for comparison purposes. Our study covered 310 cases over the course of a ten-year period starting in January 1999 and ending in December 2008.

Over this period, CJP identified 248 instances in which the superintendent recommended that a particular officer get the ax.  The mayoral-appointed board, however, only fired only a fraction (37 percent) of these cops. In most of the remaining 63 percent of cases, the board didn't retain the officer in question on the grounds that they were unfairly accused. Rather, they agreed with the superintendent's conclusion, but chose to handed out less severe punishments, such as suspension.

The big mystery is exactly how the ten-member board arrived at those decisions.

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With his public opinion at an all-time low and questions circling about his "creative" city financing, Chicago Mayor Richard Daley is making the media rounds -- sitting down with both WLS' Bill Cameron and WBEZ's Eight Forty-Eight in recent days. Not surprisingly, Daley is trying to blunt criticism that his shadowy tax increment financing (TIF) system has become a major drag on the city's finances, contributing to this year's historic $520 million shortfall. Instead of coming clean on the public funds that he's skimmed off the tax rolls, Daley is making more bogus claims to divert attention from his "glorified slush fund." Here's some excerpts from his conversation with WBEZ's Allison Cuddy, along with our responses:

DALEY: Most TIF funds don't generate any money. Most TIF funds are used for schools, parks, libraries, ex-offender programs, job training, economic development to keep jobs here. And I'll go over each TIF to show you that.

CUDDY: But you generate about a half-a billion in TIF funds per year.

DALEY: Not quite. No, I don't think so.

CUDDY: And you have about a billion in cash.

DALEY: No I don't think so. I don't think it's that high. Most of it's pledged already for a school, a park, a library. Most of it's pledged for economic development in depressed areas to bring back jobs or to keep jobs there.

The mayor doesn't "think" that his TIF network siphons off around a half-million dollars per year?  In 2008 alone, the TIF system siphoned $552 million off the tax rolls, based on annual reports signed by Daley himself. Cook County Clerk David Orr also tracks the numbers and reports that $555 million was diverted in 2007.

And what about the surplus Cuddy cites?

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Is Northwest Side Ald. Tom Allen (38th Ward) emerging as the Chicago City Council's leading tax increment financing (TIF) watchdog? Since Mayor Daley began to detail just how bad the city's finances have become, Allen has been one of the most vocal critics of the mayor's decision not to crack open his $1 billion "piggy bank" to ease the financial crisis. The Sun-Times' Fran Spielman caught his latest remarks during a budget hearing yesterday:

It was opening day of City Council budget hearings, and Chicago aldermen were loaded for bear [...]

They railed about the mayor’s plan to spend all but $730 million of the combined, $3 billion in Chicago Skyway and parking meter proceeds while allowing tax-increment-financing (TIF) districts to siphon $540 million-a-year away from the city’s property tax base.

“We should re-name it the ‘Over-tax fund’ — OTF. How can we with a straight face tell the citizens of Chicago that, ‘We have $1.1 billion of your money stuffed under our mattress, but don’t worry. We’re gonna give you $35 million in [property tax] relief?’ ’’ said Ald. Tom Allen (38th).

City officials have tried to quash the suggestion; for instance, CBS 2 reported their response this week that TIF funds are off limits and can't be tapped for general operating expenses. Perhaps if more local reporters understood how TIF districts operate, they wouldn't be so quick to take the bait.

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A week after Mayor Daley unveiled his bad news budget -- which relies on skimming $370 million from asset reserve funds to help plug a $520 million deficit -- aldermen began hearings on the city's finances this morning. Over the past five years, Chicago has collected upwards of $3 billion for privatizing several major public assets: specifically, the parking meters, downtown garages, and Skyway.  But due to the bad economy and the resulting drop in revenues, the Daley administration has tapped all but $730 million of the reserve funds.  But rather than own up to the fact he has been using these privatization deals as a crutch, the mayor has instead indicated that he is open to hawking additional public assets. "Everything is on the table," he told the Tribune editorial board last week, including the water and sewer systems.

On FOX Chicago Sunday this week, Ald. Scott Waguespack (32nd Ward) warned that if Daley is allowed to ram through another parking meter-style deal, the city would be "in big trouble." Moreover, he pointed out that the ongoing privatization talk is emblematic of a bigger problem. "[The city] needs a new influx of ideas and policies," he told co-hosts Jack Conaty and Dane Placko. "The old way of doing things no longer works." Watch it:

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After his administration received unprecedented criticism for leasing off Chicago's parking meter system, one might think Mayor Daley would cool it on the privatization schemes.  Instead, he appears to be looking for more public assets to sell off to the highest bidder. The Tribune reported yesterday that the same type of consultants who cooked up the parking meter deal (and profited off it) are now "tempting him" with "a menu of options."  "It whets your appetite," Daley told the paper's editorial board, "the things they see that we don't see." He went on say, "Nothing is off the table ... Everything is always on the table."

So there it is. Daley and consultants re already working the numbers behind closed doors. The scenario sounds reminiscent of the 75-year parking meter lease project that was rammed through the City Council in just two days, costing taxpayers upwards of $1 billion in potential revenue losses.

Today, the Sun-Times Fran Spielman ticks through the possibilities, concluding that there are five "viable" options: Midway Airport, O'Hare Airport, trash collection, the water system, and the sewage system.  The mayor has already attempted (unsuccessfully) to unload Midway. O'Hare is bogged down under loads of debt.  Meanwhile, the City Council has already put the kibosh on the trash proposal.  So it would seem that the water and sewer systems would be the most likely targets.

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During Mayor Daley's budget address yesterday, we listened closely to see if he would make any mention of Chicago's other budget: the $1 billion in taxpayer dollars currently sitting in off-the-books tax increment financing (TIF) accounts. To no one's surprise, the mayor glossed over how this mayoral "piggy bank" -- which last year siphoned off $552 million from local taxing bodies like the schools and parks -- factored into his long-term thinking about the city's finances. That's because the mayor already has his own quiet plans for handing out the public funds, according to documents (PDF) obtained by the Reader's Ben Joravsky and Mick Dumke. They explain the significance in their new, must-read cover story:

[T]he money's supposed to be used to subsidize economic development in depressed communities that would otherwise receive no investment. But according to aldermen, and as the TIF documents we obtained show, the program is used to help clout-heavy developers and corporations, pay for basic infrastructure and services without the public oversight given the official budget, and strengthen the political position of the mayor. [...]

By moving more necessary expenditures into the secret budget that he ultimately controls, the mayor also wields even more power over every public entity, from the City Council to the public schools to the Park District. At various times at least half a dozen aldermen have told us that mayoral aides pressure them on key votes—such as the ordinances for funding the Olympics or moving the Children's Museum to Grant Park—by either promising to give their wards more TIF dollars or threatening to take TIF dollars away.

Bingo. While we have no way of tracking which TIF projects successfully deliver an economic boost and which don't, we do know this: The TIF system allows Mayor Daley to curry favor with Chicago's corporate elite while keeping the City Council in lock-step with his agenda.

In recent months, we've repeatedly highlighted how tens of millions of dollars from the downtown TIF accounts are regularly used to subsidize the renovations of swanky new corporate offices in the Loop.  It's infuriating to watch these giveaways (United Airlines secured $50 million from the city in just the past two years) at a time when Chicago faces a $520 million budget shortfall.  During an appearance on WFLD's Good Day Chicago this morning, the Better Government Association's Andy Shaw used our favored term for this ongoing practice: "corporate welfare." "We are subsidizing wealthy developers and all kinds of people who are friends and cronies of the administration when our taxes are sky-high," he said, holding up a copy of Joravsky and Dumke's article. "And this is wrong because we need transparency here." Watch it:

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As Mayor Daley unveiled his latest budget today, the big news surrounded his proposal to pull $370 million from the reserve fund created by Chicago's parking meter lease to help balance next year's $6.14 billion budget.  But as we listened to him address the City Council this morning, we wondered if he'd make mention of the city's other major reserve, the $1.4 billion that's squirreled away in off-the-books tax increment financing (TIF) accounts. After all, wouldn't this be the perfect opportunity for the mayor to make the case to skeptics -- Tribune columnists David Greising this week called the corporate TIF giveaways "a racket" -- that his economic development strategy is actually paying off?

Not surprisingly, Daley didn't deliver.

While he disclosed that $8 million in TIF funds will flow back into the general fund after two districts are retired, the mayor didn't make a single mention of how he plans to leverage the TIF system at large.  Listening to his speech, you'd never know that the TIF network is the single largest tool that the city has at its disposal to balance the budget and jumpstart the local economy.

So why the silence?

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With an Olympic development bonanza now out of the picture, there's been plenty of speculation over Mayor Daley's next move for boosting the city's sagging economy. Credit remains tight and the housing market is still  deeply distressed. But there are tools sitting in the Daley woodshed that could help ameliorate this problem; As we've pointed out before, the mayor is sitting on a $1.3 billion tax increment financing (TIF) surplus that could go a long way toward rejuvenating crumbling neighborhoods. The question is what will it take to get the mayor to finally dip into his honey pot?

Today, the Sweet Home Chicago Coalition ratcheted up the pressure on the mayor to begin spending in the communities that need it most. "Instead of waiting on the federal government to send us a stimulus package, we need to start our own stimulus," Ald. Walter Burnett (27th Ward) told members of the coalition early this afternoon as they rallied outside of a series of TIF-funded projects that transformed vacant Humboldt Park lots into thriving (and affordable) apartment buildings. Burnett and colleague Ald. Manny Flores (1st Ward) are currently crafting an ordinance that would require the city to commit 20 percent of all TIF revenues toward affordable housing.  Today, proponents of the plan built a symbolic yellow brick road paved with the TIF surpluses. Check out our slide show:

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Still smarting from the public beating that they took after approving a 75-year lease of Chicago's parking meters after two days of consideration, the City Council made a muted effort back in June to subject asset sales to more scrutiny. Getting the Asset Lease Agreement Disclosure Ordinance on the books certainly was a step in the right direction. But as we noted at the time, there is still plenty of room for improvement.

The Asset Lease Taxpayer Protection Ordinance that Ald. Scott Waguespack (32nd Ward) introduced today is the best effort an alderman has yet produced. Nine council members have already signed onto the measure, which could force the Daley Administration to go public with future proposals before cooking up the next private plan to sell off yet another public asset. It would also limit long-term leases to 30 years if they could survive the muster of the following public scrutiny:

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