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.