Vallas launches mayoral campaign with attack on Emanuel’s financial stewardship

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Former Chicago Public Schools CEO and Mayoral Candidate Paul Vallas wants to use excess TIF funds to help homeowners get water filtration devices. | Sun-Times file photo

Former Chicago Public Schools CEO Paul Vallas got an early rise out of Mayor Rahm Emanuel by accusing the mayor of “punting” Chicago’s $36 billion pension crisis during his first term, making the problem infinitely worse.

Now, Vallas, 64, is launching his campaign by intensifying his attack on the issue of stabilizing city finances — the issue Emanuel views as his greatest strength.

He argued Emanuel’s failure to push a “pension equity bill” for Chicago Public School teachers while Democrat Pat Quinn was still governor will cost taxpayers an additional $1.5 billion.

“If he would have done that and combined that with a legislative agenda to ensure that the Chicago Teachers retirement system was equitably funded through Springfield instead of waiting seven years, the city would be in much better shape and we wouldn’t be facing another financial cliff three or four years down the road,” Vallas said in a videotaped interview with the Sun-Times.

“Politics drives everything in this administration. It’s like the Washington D.C.-type politics. Everything is focused on fundraising. Everything is focused on getting through the next election.”

Emanuel has “hinted strongly” at another wave of post-election tax increases to keep four city employee pension funds on the road to 90 percent funding. But he won’t “talk about on who and how much,” Vallas said.

“Do you really trust him to make … decisions on where to go to get those revenues that are not going to adversely impact working families? Look at the tax increases. They have no relationship to one’s ability to pay,” Vallas said.

Vallas hammered the mayor for reneging on a 2011 campaign promise to hire 1,000 additional police officers and allowing police manpower to dip to dangerous levels before embarking on a two-year hiring blitz after the murder rate soared.

The mayor also balanced his first budget by closing police stations and eliminating more than 1,400 police vacancies.

“When I was city budget director, we built the police force to 13,500. We had 1,200 detectives on the street,” Vallas said.

“They have played the attrition game and allowed those positions to plummet….I’ve seen numbers as low as 600. Others have told me 800. And you wonder why the [homicide clearance rate] is 16 or 17 percent? What they did for four or five years was totally de-stabilize the police department.”

Emanuel was elected in 2011 on the strength of the black vote and re-elected after African-American voters forgave him for closing a record 50 public schools.

Vallas is now hammering away at the issue of school closings, well aware that Emanuel’s handling of the Laquan McDonald shooting video will make it difficult for him to get a third chance with black voters.

“If you’re gonna close schools, why open schools simultaneously?” Vallas said of the mayor’s plan to close four under-enrolled high schools in Englewood and build one new high school.

Vallas noted that student enrollment “grew by 30,000” — to 434,000 – under his watch. That’s 62,618 students more than the 371,382 who attend Chicago Public Schools today. CPS opened 15 charter schools on 18 campuses during his six-year tenure. The system now has 122 charter schools.

“They’ve continued to open schools while enrollment has declined, creating over-capacity which hurts all schools,” he said.

“If you need to right-size the district, have a policy. Never close a high-performing school. If a high-performing school is struggling, figure out a way to give more students access….Work with that school to develop a plan and give them a timeline for boosting enrollment. And if you finally decide you have to close a building, then for heaven’s sakes have a strategy for re-purposing that building so you’re just not leaving a vacant building in the heart of a community that’s already under-served.”

Emanuel has already branded Vallas the “architect of kicking the can down the road.”

His response to Vallas campaign launch had a similar ring.

“As he did in Philadelphia and New Orleans, Paul Vallas left Chicagoans a fiscal time bomb….Paul Vallas planted the seeds of the pension crisis when he raided pensions to pay for expenses” and “eliminated the dedicated funding set aside just for pensions,” the mayor’s campaign spokesman Peter Giangreco wrote in an email.

“Mayor Emanuel and the taxpayers of Chicago have spent years unraveling Vallas’ damage, fought to restore this funding and generated new revenue to finally put CPS back on solid financial ground. Why would taxpayers and parents ever let Paul Vallas dig more holes at City Hall?”

To underscore what he called Vallas’ “hypocrisy,” Giangreco pointed to the public tirade Vallas unleashed shortly after the Illinois General Assembly gave then-Mayor Richard M. Daley control over Chicago Public Schools and appointed Vallas as schools CEO.

During a public hearing, a woman dared to ask Vallas why he had to “cut so many jobs” and why he didn’t first “put more pressure” on the Illinois General Assembly to “come up with more” school funding.

“You’re living in a fool’s paradise if you think we’re going to get more money from Springfield,” the notoriously thin-skinned Vallas shouted.

“We’ve got to take Chicago schools out of the headlines and off the radar screen Downstate. . . .We’ve got to get our s–t together.”

Vallas showed up at the Sun-Times interview prepared to defend his tenure at CPS.

He said he left CPS with “hundreds of millions” in cash reserves and a fully-funded pension system that triggered “twelve bond rating upgrades.” He left the system with “78 new and replacement school buildings” after “six years of improved math scores, five years of improved reading scores” and higher graduation rates.

Nine weeks ago, Vallas’ youngest son died at a substance abuse treatment facility in Huntington Beach, Ca.

The death of 24-year-old Mark Vallas had political pundits questioning whether Vallas would have the stomach for the grueling 2019 campaign after living through a parent’s worst nightmare.

But Vallas said there was “never any doubt.”

All three of his boys – the surviving two are police officers, one in San Antonio, the other in suburban Wheeling — were “the strongest advocates for me running” and have been “urging me to run for the better part of a year,” Vallas said.

“I wanted to make sure that everybody was comfortable with it and my wife was comfortable with it. So obviously, we needed some time to reassess and get other things in order. But if anything, we’re probably more enthusiastic about doing it now. It’s something that needs to be done. This city is in need of help and direction,” Vallas said.

Vallas served as revenue director and budget director under Daley before being dispatched to CPS in a dream- team pairing with then School Board President Gery Chico, who had been Daley’s chief of staff.

The career bureaucrat hopes to stand out in a crowded field of mayoral challengers by wowing Chicago with his breadth of knowledge and experience.

Why then, is he kicking off his campaign without offering a single solution of his own?

Vallas says it’s because he’s trying to be “disciplined,” which is not exactly his strong-suit.

“I could rattle off six or seven or eight things that I would do in a very disorganized way. [But I would ] rather have a specific discussion about budget and finance, about pensions, about public safety, about infrastructure, about what I’m gonna do to revitalize the Chicago Public Schools that continues to bleed enrollment,” he said

“What I’m hoping for is that, when I do start talking about the issues, that I’m able to focus on them one at a time and I’m able to generate the same attention that my announcement will be able to generate.”

Notoriously thin-skinned, Vallas also tried to explain away the close ties he developed with now-convicted education consultant Gary Solomon.

Solomon worked with Vallas at schools in Philadelphia and New Orleans. In Chicago, he’s better known for master-minding a contract kickback scheme with then-Schools CEO Barbara Byrd-Bennett. Both Solomon and Byrd-Bennett are now in prison.

“Gary was the vice-president for Princeton Review, one of the largest education service firms in the country. They did business with hundreds of superintendents,” Vallas said.

“I’m not the one who gave Gary Solomon a $20 million, no-bid contract.”

At City Hall, Vallas earned the nickname “Dr. Yes” for his propensity to say “yes”’ to virtually every request, then find the money to pay for it after the fact.

The reputation followed him to Philadelphia, where Vallas left “significant deficits that were never revealed before,” said former Philadelphia Mayor Michael Nutter, a City Council member during Vallas’ tenure there who took over as mayor after he left.

“He never saw a dollar that he wasn’t willing to spend three times with three different people,” Nutter said Tuesday.

“He over-spent and over-promised with regards to school construction, programs and activities. It was spend, spend, spend. And it ultimately caught up with him.”

During the Sun-Times interview, there were plenty of “no’s” from Dr. Yes.

“No” to Emanuel’s plan to build a high-speed rail line between downtown and O’Hare Airport because “it’s more p.r. than reality” and there are “a lot of other infrastructure needs.”

“No” to $175 million in infrastructure improvements for the Obama Presidential Center in Jackson Park, although a “reasonable” level of support is needed.

“No” to Emanuel’s “cruel” phase out of the 55 percent city subsidy for retiree health care without a replacement plan in place.

“No” to civilian police review that gives an elected board the power to establish police policy and fire the police superintendent.

Vallas even questioned the $2.25 billion incentive package Emanuel and Gov. Bruce Rauner have put together to lure Amazon’s second world headquarters to Chicago.

“If you have $2.25 billion for Amazon, then what took you so long? There’s, what I call the mini-Amazons out there. There’s existing businesses or potential businesses that could have located in the city with those type of incentives,” he said.

Here are nine key moments from the interview:

Key Moment #1: The system is too political

VALLAS: Well I think the problem with Chicago is politics dominates everything. Look, the present administration literally punted the first term just to get reelected. And as a result of waiting until the second term to begin to address any of these issues, the costs of addressing those issues are going to be significantly different. Let me give you a case in point. The pension funding bill for teachers, pension equity bill. That pension equity bill, they finally… Governor Pat Quinn was in office for five years. In any given year they could have brought that bill to Quinn. In fact, they could have brought that bill to Quinn in 2010 or 2011 when Quinn restored the state funding to pensions and they could have included the equity funding for the Chicago teachers pension system and their failure to do that will actually cost taxpayers close to 1.5 billion dollars. So they punted. They punted for political reasons. So there are delays in dealing with the city retirement systems. And incidentally they haven’t completely resolved those issues. If you look at the retirement systems there’s another round of big increases that are coming, they total something like 1.3 billion dollars.

Key moment #2: Taxes are too high

VALLAS: And we look at the tax increases, they have no relationship to one’s ability to pay. They’re not progressive. Look at what they’re doing with the red light cameras. That was just a revenue generator, that wasn’t designed to improve public safety. There’s something like 10,000 bankruptcies in the city today from people who can’t pay fines. People are getting their cars confiscated and can’t go to work because they can’t afford to pay not only the basic fine but all the penalties that are added to those fines. So at the end of the day, anybody can say I put the city on improved financial footing by increasing taxes on the average of 17, 18 hundred dollars per household. Not counting all these fines and fees that people are being inundated with.

Key moment #3: How will you raise revenue?

SPIELMAN:I want to know right here and now, give me some ideas of the kinds of revenues you would raise if you don’t agree with what he’s doing.

VALLAS: Well I think this is going to be a long campaign and I think in about two weeks we’ll have an opportunity to have that discussion in great detail. And what I’m hoping for is when I do come out and I do start talking about the issues and what I’m going to do to address these issues, that I’m able to focus on them one at a time and I’m able to generate the same attention that hopefully my announcement and the interviews I’ll be doing this week announcing my candidacy officially will be able to generate.

Key moment #4: School closings

VALLAS: You don’t make them sudden. And what you need to do is you need to get with the community to have real community input, first of all the type of community input that you’re going to listen to and you have to decide what you’re going to do with that vacant building. How are you going to repurpose that building? Do you know that there’s empty schools out here that, there’s buildings that are empty while there’s charter schools that are occupying substandard buildings, and they can’t access those vacant schools in the heart of these hard-pressed communities. So I think the point is if you’re going to have a policy, if you need to right-size the district.

SPIELMAN: And it needs to be.

VALLAS: Have a policy that, for example, number one you never close. You should never close a high performing school. And if a high performing school is struggling to recruit students, you figure out a way to give students more access.

Key moment #5: Police chief

VALLAS: I think the, I think decisions about whether or not to hire or fire the police superintendent or for that matter, police officers need to be made by individuals who are experts. You know I believe that the boards need to have individuals who have the expertise and the experience to make those decisions. But I think those boards all need civilian representation. I think all those boards like the school board need civilian representation.

SPIELMAN: So you would not have a civilian review panel you would put a civilian on the police board?

VALLAS: No no no I’m not saying that.

SPIELMAN: What are you saying?

VALLAS: I’m saying that when I’m ready to, in about two weeks when I lay out my public safety proposals I’ll have specific things to say about that I’m just not ready to say that right now. But the point is if you’re asking whether or not you should have a civilian elected school board, I mean a civilian elected police board to have the power to hire and fire the superintendent I wouldn’t be inclined to support that. I think there needs to be civilian representation because I think when you have civilian representation you have transparency, you have much greater accountability. But I don’t think a a civilian board should have the power to hire and fire a superintendent period.

Key moment #6: Connection to the black community

SPIELMAN: You were once very popular in the black community, how are you going to get that back when you’ve been gone 20 years?

VALLAS: Well you know first of all I think people realize that not only did I serve this city for 12 years but you know I just didn’t go out into consultant heaven when I left. I took over a struggling school system in Philadelphia, Pennsylvania and left that system with five out of six balanced budgets, almost a tripling in math scores and a doubling in reading scores. I then was invited by, or asked by Governor Blanco then and Senator Mary Landrieu to come and try to rebuild schools in New Orleans after Katrina. A year after the hurricane they were struggling, there was a huge struggle trying to get schools open. They wanted a new school system built down there, obviously facing FEMA issues. So I left New Orleans with…

SPIELMAN: You are not answering my question about how are you going to rekindle the popularity that you once had in the black community.

VALLAS: Oh, yeah. I think what I’m going to do, look what I once had, I think people want answers. And so what I’m going to do in all communities is identify what I see as the issues that need to be addressed and articulate very specific precise proposal proposals on how they’re going to be addressed.

Key moment #7: Chicago Teachers Union

SPIELMAN: Chicago Teachers Union can’t stand you. They feel that you have, you have privatized school systems all over the country.

VALLAS: Yeah well you know I don’t know what you’re referring to.

All I know is that I think I’m going to have them. I believe that I’m going to have the majority of teachers support me because they remember my tenure in the Chicago Public Schools. I tend to think that there’s going to be, you know I run into students all the time who have my name on their report cards. You know because I went to the pharmacist the other day, pharmacist recognized my name said you signed my report card. Superintendent’s name is on report cards. I think there’s a lot of people who worked in the schools and went to the schools who are going to know the job I did. And I’m pretty confident that I’m going to be supported.

Key moment #8: Amazon headquarters

VALLAS: So I have to ask myself that, why have we been suddenly able to identify two and a half billion dollars in resources that we could commit in tax breaks and tax incentives that we can give to Amazon and in partnership with the state. I mean if there were those type of incentives available then why in the world weren’t those type of incentives being used over the last six to seven years? That’s the point I’m trying to make. Suddenly Amazon comes, it’s a high profile project, we’ll pay a king’s ransom to bring Amazon in. Well what have we been waiting for? Look it took them until 2016 to impose a developer’s fee to raise money to distribute to businesses on the West and South Side. And once questioning the lack of, the lack of transparency and accountability to how that’s being distributed. My point is, we suddenly have two and a quarter billion dollars, two and a half billion dollars. I mean if those type of resources are available why on God’s good earth haven’t we been investing those resources in communities? Some of which, many of which have not recovered from the 2008 recession and some on the west side that haven’t recovered since 1968.

Key moment #9: Budgeting

VALLAS: I think what the city has to do is the city has to invest in things that improve the quality of life. And my intent is to articulate how the budget can be an investment vehicle. And when I say quality of life what does that mean. That means that you have the public safety resources you need to ensure that every neighborhood is a safe neighborhood. That means that you have quality school options in every community. That means that the city is addressing the environmental needs in the communities, things like clean water or things like neighborhood infrastructure. That means that you’re investing in the neighborhoods that you’re just not building 175 million dollar Wintrust stadiums on the Depaul campus, on the McCormick Place campus. When you could’ve invested that 175 million dollars at Chicago State University or in the Pullman, Roseland area and done the type of economic development that spurred the whole dramatic expansion and redevelopment of the South Loop.

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