By: Mark Glennon*
Remember Mayor Lori Lightfoot’s “pandemic budget” proposal last month?
Along with big tax hikes, at least she dared use the word “layoffs,” you might have thought. Maybe Chicago would lay off 350 union workers in March, she said.
Well, forget it. The mere possibility of those layoffs, covering only about one percent of the city’s 33,000 employees, was too much for Chicago’s public unions, so Lightfoot caved.
Lightfoot and Bob Reiter, president of the Chicago Federation of Labor, issued a joint statement on Saturday outlining the means for avoiding the layoffs.
Those means, too, are horrible. Chicago’s marijuana revenue is coming in better than expected, so the city will sell ownership of that future revenue and use the proceeds to skip the layoffs.
It will be Chicago’s latest use of the infamous “securitized bond” structure, which we’ve criticized repeatedly, likening it to a sale of body parts. Chicago has already sold off ownership of its future sales tax revenue to pay current operating expenses. It’s like going to your local bank and signing over ownership of your future earnings to pay for today’s expenses. Now, future dope money will be pawned off as well.
The pending budget includes a $94 million property tax hike, and increases in the gas tax by 3 cents per gallon and the cloud-computing tax by 1.75 percentage points. Was any thought given to making the layoffs and instead using the extra revenue to reduce those pending tax increases?
Get serious. Those are union jobs we are talking about.
And think about what two retail operations the Chicago has made sure to keep open during the pandemic: Dope and booze. Why? Because the city takes an inordinate share of that revenue through special taxes thereon. Hammer the private sector with shutdowns but keep those retailers open and their cash flowing to the city.
Stay stoned, Chicago. The tax hikes will be painless.
*Mark Glennon is founder of Wirepoints.
For more on the “securitized bonds” now being used regularly by Chicago, see our earlier article here.
Hopefully, all media will get the message, in Illinois, too.
Ted joined Tom Miller of WJPF to talk about Illinois’ highest-in-the-nation property taxes, why lawmakers don’t want to touch the tax’s cost drivers, just how much Illinoisans’ tax burden has grown over the decades, why Gov. Pritzker failed to meet his promise to reform property taxes, and more.
Ted joined Dan and Amy to talk about the free speech controversy brewing in Wilmette due to the city’s refusal to fly a religious freedom flag, the city’s left-wing excesses and the growing culture war, the latest money spent on the illegal immigrant crisis, and more.
Weekly crime statistics from the Chicago Police Department: Report through 4/14/2024.
Looks like a few realities are beginning to dawn in Pa. (1) CARES money can’t be used to fill budget holes (2) Gambling revenues are falling fast because, well, casinos are closed. It reminds me of a “Wizard of Id” cartoon where slot machines are being used as parking meters. The short king says the people still pay tax but the slot machines make it a little less painful.
https://www.inquirer.com/education/spl/pennsylvania-budget-property-tax-relief-coronavirus-relief-funding-20201116.html
Here’s another article I wrote on this pernicious, new bond structure when the General Assembly hid it in a massive budget bill to get it passed: https://wirepoints.org/outrageous-give-away-to-muni-bond-buyers-hidden-in-massive-budget-bill-wirepoints-original/
When does the ship sink? Glennon? Dabrowski? Ives? At least give me some speculation here, off the record – it is the comments section after all.
Oh, man. We get this question so often, but cut us some slack. We’re not Carnac the Magnificent. It depends on so many unknowable factors. Just the potential for a federal bailout could kick the can for at least a year, but that depends on the Senate outcome, which depends on Georgia. Other unknowables include the length of the pandemic, the direction of the economy, future elections, the unpredictable herd mentality in the muni bond market and what’s going on in the thick skulls of our incumbent leadership. One thing we have said often is “It’s Happening.” It’s a process… Read more »
Wasn’t the pot tax revenue supposed to be dedicated to sjw-righting the wrongs systemic racial disivestment bs? Instead, thanks to phonie progressive Alder-cridders, all future pot tax revenues been flushed away to keep $six-figure$ city tree trimmers from loosing one dime of pay?? Look at the fake progressives are showing there true colors? Will anybody in press say anything?
Good point!
From mpp.org: After covering the costs of administration and expungement, the remaining funds will be distributed as follows:
2% to public education and safety campaigns
8% to the Local Government Distributive Fund, for prevention and training for law enforcement
25% to the Recover, Reinvest, and Renew (3R) Program
20% to mental health services and substance abuse programs
10% to pay unpaid bills
35% to the General Revenue Fund
Parking Meters 2.0
Wonder how many of the unionists are boozers and pot heads?
Only on the job
When the city files bankruptcy I assume they can’t claw this back, it’s lost forever?
Correct, almost for certain. That’s the entire reason why the muni bond industry got the securitized bond law passed — to make it as bullet-proof in bankruptcy as possible. I wrote at the time that if I were still teaching secured lending and bankruptcy (which I used to do) I would grade it an A+ from the perspective of bondholders looking out for only their interests. https://wirepoints.org/illinois-bill-to-prioritize-bondholders-over-the-public-and-taxpayers-must-be-stopped-wirepoints-original/
Lightweight is caving to Bob Reiter to assure aldermanic votes for her budget. But the alderman, whether old school machine types or phony progressives, are 90% dependent for their campaign war chests on donations from city labor union dues collected by afl/cio, seiu, ctu, etc. who in turn get their marching orders from papa madigan via foot soldiers like martwick. If your not part of the pay-to-play ecosystem your irrelevant
Maybe to fight covid and get folks to stay home, the city could hand out free pot as kind of a boobie-prize (doobie-prize) for all us 2nd class schmucks who don’t have gaurenteeted/ zero layoff/ $six-figure$ tree trimmer jobs with gold plated retirement deals….call it OPERATION KEEP-EM HOME /KEEP-EM STONED..and would serve as introductory to get folks hooked on the weed..chicagos only growth industry!!
Lol,thats pretty funny!
More permanent victim class, Latinx,
lgbtq Democratic patronage workers will be hired. This is all a scam to make nice to the south and west side to insure her re-election.
At the very least a hiring freeze. More than likely they will see the increased revenue as a reason to hire more dembots.
It’s like looking at your cellphone.and walking off the cliff.
You can’t stay. Get out.
This method of borrowing from Friday to pay Monday is akin to capital appreciation bonds. In Woodstock the school board of 14 years ago saw fit to borrow $14 million CAB. Shortly, the $50 million of interest, plus the $14 million principal comes due and payable. The school board of 14 years ago realized that the deferred accruing interest was not counted on the balance sheet as debt until the due date. Why is that important? Because ILCS 5/1e-65 “Power to issue bonds” limits school indebtedness to 13.8% of EAV (equivalent to 4.6% of taxable property value in school district).… Read more »
Nobody cares to correct this. I ran legislation to prevent this excessive off balance sheet borrowing and couldn’t even get Republicans to sign on. The state is owned by the unions because voters don’t pay attention to the details. The majority of voters have no clue about policy and don’t care to understand.
I am so very very sorry you weren’t elected.
The only reason anybody knows about the legislation authorizing securitized bonds is because you, Jeanne Ives, sat attentively listening to what was going on in the House. We heard about it from you and began criticizing it. The initial bill sponsor, Barbara Flynn Curry, lied about what was in the bill when asked. The legislation was later snuck into end-of-session, huge, budget bills. It was written by somebody in the muni bond industry solely for their benefit. We documented all that before.
Thank u Jeanne for trying!-unfortunatly most of the rest of the politicians in this state dont seem to be trying very hard to correct the major problems that we all face
When Enron engaged in off balance sheet transactions to avoid debt and write-offs, many went to prison and the company went bankrupt. When Illinois pols do the same, they are applauded by voters for keeping the unsustainable status quo afloat. Of course, this perspective rarely is reported on (except here).
Yep!
That’s why its time to leave Illinois.
Yup, the same reason why you get “Christians” who support the party of infanticide at this point – and when you ask them it’s a bunch of mumbo jumbo blah blah. Voters (if elections were ever real) get what they deserve in a democracy. Sadly, like all systems that continue to centralize power, it turns out bad for everyone. The only way to correct this is to go back to the original Constitution and have limited voting. At the very least, you should have to be a net tax payer. But we know who doesn’t like that, and why.
Please run for Governor again in 2022
This behavior of concealing off balance sheet arrangements is textbook de-frauding tax payers. Should be taken to court or least looked by SEC.
JB will talk freely about hiking the flat tax but not the cannabis tax? Everything’s on the table, right?
Where is the shared sacrifice? In states like Illinois it’s only tax and spend, tax and spend.
Pot is essential; restaurants are not, what?
So Lightfoot and Pritzker stand on their soapbox and command businesses close down,hurting the income of pretty much every “commoner”-but none of the public sector workers have taken any kind of hit during all of this!-If you’re a business owner and keep allowing these nitwits to close your doors and you dont start fighting against this tyranny then i guess you deserve to lose everything-stand up for your rights!!
Jabroni, the majority of commenters here would have been happy to fight back if they saw a path to winning. Unfortunately, there is none. The only way to fight back is to leave.
With Groot and the Dictator demanding massive bailouts from the federal government even leaving Illinois doesn’t protect you from the greed-crazed union thieves
Completely sickening. The crappy tv news would never report that city is securitizing future pot revene it doesn’t have. For how long or for how much $ is city selling off its future pot tax revenue to pay for our city worker hero’s, of whom +40% are maken +$100k (per suntimes) and god knows what in benifits?? Yet again, upper income/zero sacrifice/zero layoff /no worries guaranteed socialism for the dem machine 1st class citizenry at the expense of us peasantry. But if your like my city worker neighborhoods you can swap out your ‘union proud’ yard sign with a blm… Read more »