When Ald. Bob Fioretti (2nd) declares his candidacy for mayor on Saturday, expect to hear a lot about the widening of Chicago into two cities.
Get ready to hear about the need to level the playing field between the haves and have-nots by reigning in tax-increment-financing (TIF) subsidies to big business and about imposing a financial transaction tax on LaSalle Street exchanges.
Five years ago, Fioretti was singing a dramatically different tune.
In an Oct. 5, 2009, letter written to the city’s then-Acting Community Development Commissioner Chris Raguso, Fioretti urged the city to grant the $15 million TIF subsidy needed to “retain and expand the employment base” provided by the Chicago Mercantile Exchange.
“CME, as now merged with the Chicago Board of Trade, represents the single most significant financial institution headquartered in Chicago. It employs approximately 1,750 individuals and is expected to grow by another 900 jobs in the next decade,” Fioretti wrote then.
“It is also in the heart of an `economic cluster’ that the Federal Reserve Bank of Chicago has estimated supports over 150,000 jobs in the city. Its continued rehabilitation of the Board of Trade Building at 141 W. Jackson Blvd. has brought renewed vitality to the southern portion of the Loop. Due to these and other factors, stimulating its retention and expansion…is a worthy use of TIF.”
CME got the subsidy but subsequently chose not to accept it.
That was then. This is now.
Now, Fioretti wants to pull back on TIF subsidies and impose a transaction tax that, the exchanges have long warned, could drive them out of Chicago.
Neither Fioretti nor his campaign spokesman Michael Kolenc could be reached for comment on the apparent change of heart.
Earlier this year, Chicago Teachers Union President Karen Lewis, who is also mulling a campaign for mayor, told the Chicago Sun-Times editorial board that a transaction tax on sellers and buyers of futures, future options and securities option contracts traded by the Merc and Chicago Board Options Exchange could produce a $12 billion-a-year windfall for the state and “make heroes” out of the wealthy men and women who work on LaSalle Street.
Emanuel strongly disagreed. He argued that a transaction tax now prohibited by state law would be more likely to turn LaSalle Street into a ghost town. Some financial transaction taxes are also banned by federal law.
“Years ago, people referred to LaSalle Street because it was a financial center. Chicago had a lot of banks that were Chicago-based. There’s only one left. They’re all gone,” the mayor said then.
“As it relates to the futures and options industry, that’s a place where Chicago is still economically a dominant player — and there’s more competition,” particularly if a transaction tax is tacked on.
Even if you “put aside” the economic value and jobs tied to the two exchanges, there would be huge legislative hurdles to overcome before a transaction tax could be implemented, the mayor said then.
“You’d have to get both Springfield and Washington to agree,” he said.
To solve Chicago’s $20 billion pension crisis, Fioretti also favors a 1 percent commuter tax on 620,000 suburbanities who earn their paychecks in Chicago, a broadening of the sales tax to include services and a land-based casino that has been on the city’s wish list for 25 years.
Emanuel is dead-set against the idea of using the jackpot of revenue from a Chicago casino to solve the pension crisis.
“I don’t think you should go to the roulette table with somebody’s retirement check. I’m not gonna do that,” the mayor has said.
In a recent, “Conversations with Karen” event, Lewis referred disparagingly to the on-again, off-again $15 million TIF subsidy for the Merc, without mentioning that Fioretti was one of its champions.