Chicago’s Democratic legislators want to use the city’s extra tax increment financing money to help Chicago Public Schools.
And as the governor threatens the district with bankruptcy, a North Side alderman suggested a second property tax hike is needed, in addition to the $588 million just enacted.
A swath of Democratic representatives joined Majority Leader Barbara Flynn Currie on Thursday morning in asking that the extra TIF money — an estimated $150 million to $350 million — go toward helping CPS plug its $480 million budget hole.
“The important point here is we’re trying to help ourselves,” Currie said at a news conference in the Thompson Center, alongside colleagues, labor leaders and aldermen. “A lot of complaints from Springfield say that Chicago isn’t doing enough to solve its own problems.”
The bill Currie plans to file would define extra TIF money as all funds that aren’t already committed to a specific project. The mayor now decides what is surplus TIF money and splits it among CPS and several other agencies such as the parks and City Colleges.
Currie’s bill, as she described it, would temporarily funnel all the money to the ailing schools, but she didn’t know how much schools could gain “because we don’t know exactly how much is obligated at any given moment, and were this legislation to pass, it’s possible new contracts might quickly get signed.”
The cash influx would buy time for legislators to land on a long-term school funding solution, said Currie, a lieutenant of powerful House Speaker Michael Madigan.
State Rep. Mary Flowers said the the proposal means “taxpayers of Illinois and the city of Chicago will not have to bear this burden. . . . The money is there already, and we will use it to continue to educate our children.”
Backed by Gov. Bruce Rauner, Republican leaders on Wednesday announced plans to allow CPS to file for bankruptcy and to replace the mayor’s appointed school board with a state authority to run the schools.
Ald. Ameya Pawar (47th) said he’s all for giving CPS a bigger chunk of the TIF surplus, but that’s “one-time” revenue that will not generate nearly enough money to stave off thousands of teacher layoffs.
Pawar said it is equally clear that the $480 million in state pension help already built into the school budget will not arrive in time to keep the wolf away from the door.
As a result, Pawar said it’s time for the City Council to take matters into its own hands by raising property taxes again just a few months after approving the largest property tax increase in Chicago history.
“Even with a $200 million or $300 million TIF surplus, we’re still hundreds of millions of dollars short. We’re going to have to have at least a $300 million property tax levy for the schools. What’s the alternative?” Pawar said. “We have a governor who is failing. He’s letting universities fail. And now, he’s about to let the third-largest school district in the nation fail because of his obsession over unions.”
“We in the City Council need to keep schools open for the year. If that means raising property taxes again, I’m willing to take that vote. If the governor is willing to lift the property tax cap, CPS can do it on its own. If he doesn’t, then the City Council has to start talking about it in combination with the TIF surplus.”
In late October, Pawar was one of 36 aldermen who agreed to support a tax-laden 2016 budget that includes a $588 million property tax increase for police and fire pensions and school construction and a first-ever garbage collection fee of $9.50 a month per household.
Mayor Rahm Emanuel has warned that the heavy lifting is only beginning. The mayor has also proposed raising property taxes by another $170 million for teacher pensions, provided it’s part of a grand bargain that calls for pension help from Springfield and shared sacrifice — in the form of a 7 percent pay cut — from the Chicago Teachers Union.
Earlier this week, schools CEO Forrest Claypool said he was “cautiously optimistic” that daily negotiations with the CTU would culminate in a deal that averts teacher layoffs and phases out the 7 percent pension pickup.
At a time when Emanuel has been weakened politically by the furor over his handling of the Laquan McDonald shooting video, Pawar was asked whether his emboldened colleagues would support another massive property tax increase so soon after approving the last one.
“It was pretty clear last year that this was supposed to shore up police and fire pensions, and that schools would be next. The question was when? The ‘when’ is now because we have a governor who is an abject failure,” Pawar said.
“We as a City Council need to figure out how to stop limping from one crisis to the next because of the failures of our governor.”
Budget Director Alex Holt said using TIF surplus is a “great idea.” That’s why the mayor has been “aggressively” doing just that — to the tune of $700 million since 2011 and $113 million this year alone, she said. Roughly $60 million of that money is earmarked for CPS.
“We froze downtown TIFs. We declared an aggressive surplus. There’s not a whole lot left to surplus. At this point, we probably need to look at canceling current or future projects to generate more money,” Holt said.
“To the extent that any elected officials want to cancel projects in their community, we would be more than happy to work with them and send additional surplus dollars to CPS. However, the amount of additional surplus is not going to be sufficient to solve the financial problem at CPS.”
As for Pawar’s call for a $300 million school property tax increase, Holt said it’s premature. She’s not about to let the state off the hook.
“We do agree that we need a systemic and long-term solution to the financial situation at CPS. But we think the state has to be part of that solution and fair funding for our teacher pensions has to be part of the solution,” she said.
“We’ve got to look at every option that’s available to us. The alderman has put forward an opportunity that needs to be considered. Everything needs to be on table. But it’s too early to have a detailed conversation about a property tax increase. The solution for CPS and teacher pensions can’t simply be on the backs of Chicago taxpayers. We all need to be part of the solution. The state does. The city does. We can’t move forward with just one element of it.”