Harris says cuts are coming

Illinois Rep. Greg Harris reports the Illinois House will begin its deliberations on the controversial budget proposed by IL Gov. Pat Quinn.

The IL House is using different revenue numbers than the governor, a fact you can see in the second paragraph of Harris’ release.

Springfield is likely to see many people descend upon it to lobby for funding their cause. Harris has some thoughts on what it takes to be effective in your lobbying.

Watching the civil disorder that is characterizing the budget debate in Indiana and Wisconsin, expect some pain and probably lots of marches as the legislature attempts to cut billions from the budget.

Read Harris’ release.

Cullerton discusses tax increase, budget (video)

A plan to raise Illinois individual taxes to 5.25 percent, a 75 percent rate increase that will raise $6 billion, is backed by IL Sen. President John Cullerton (D- Ravenswood Manor), Gov. Pat Quinn (D- Chicago: Galewood) and House Speaker Mike Madigan (D- Chicago). According to Cullerton, the state would roll back the increase to 3.75 percent after four years.

The current state income tax rate is 3 percent.

The Springfield State Journal-Register broke out details of the bill:

Components of the proposed state bailout plan

*An increase in the state income tax rate on individuals from the current 3 percent to 5.25 percent, raising $6 billion a year. Most of the increase would expire after four years. At the end of that time, the permanent individual tax rate would be 3.75 percent.

*Local governments would not get their usual cut from the increase.

*An increase in the corporate income tax rate from the current 4.8 percent to 8.4 percent, raising $1 billion a year. That increase also would drop after four years.

*An increase in the state cigarette tax by $1 per pack, raising $377 million. Those funds would be devoted to education funding.

*Borrowing $8.5 billion to eliminate the state’s backlog of bills.

*Paying all property owners a $325 check from the state each year as a credit against property taxes. The rebate would be permanent. The current deduction for property taxes on the state income tax return would be eliminated.

*Instituting a three-year moratorium on new state programs. Spending increases would be capped at 1 percent per year for three years.

Cullerton told reporters in a presser (video above) the state would pay a backlog of bills, estimated to total $8.5 billion, in the first few months of this year. The slow-pay of the state has been blamed by Rich Miller of The Capitol Fax Blog in an article in the Illinois Times for the loss of more than 26,000 human service jobs alone.

Black legislative leaders demanded the property tax changes resulting in the $325 rebate and a commitment to earmark $700 million to schools, according to the Sun-Times.

The Sun-Times says Republicans have vowed to oppose the plan. According to the Sun-Times IL Sen. GOP leader Christine Radogno (R- Lemont) said “I often said during the election that I gave Gov. Quinn credit for running on what he believes in, which is a 1-percent increase. This is more than double that.”

“To me, that’s kind of a bait and switch. And I think it’s wrong.”

Passage of the bill is expected by the end of the current veto session, scheduled to end on Wednesday, Jan. 12.

TIFs drain 59¢ of every commercial property tax dollar in Ravenswood

Taxpayers in Ravenswood’s six TIFs paid $40.3 million into total property taxes in 2009, excluding SSAs, but 59 cents of every dollar were siphoned away to TIF accounts, records released last week by Cook County Clerk David Orr indicate.

Orr called Tax Increment Financing districts a “broken system.” Orr said TIFs are being used for purposes they were not meant for.

“The city is plugging its budget hole with TIF money but TIFs were not created to be a safety net when the economy went sour,” Orr said in an executive summary released Nov. 23.

Orr called for

  • a moratorium to slow the proliferation of TIFs,
  • an examination of the TIF funds to distribute surpluses,
  • a requirement future TIFs itemize project goals,
  • a reform of the budget process to include TIF revenues and expenditures and
  • a continuation of TIF transparency efforts.

Orr’s moratorium would last for six months, after the 2011 municipal elections for mayor and alderman. He backed SB 3151, a proposal that would index revenues available in TIF districts to other taxing bodies.

Six Ravenswood TIFs were among the hundreds of Cook County TIFs included in the report. More than $23,818,494 in TIF revenues were collected in the six TIFs, a year over year increase of 12.15 percent and a 16.82 percent annualized increase since 2005.

Orr told Crain’s Greg Hinz Chicago was reassessed last year and that the state multiplier grew, leading to larger tax bills.

The Ravenswood TIFs include nearly all the commercial property in Ravenswood, including the Ravenswood industrial corridor and most of the business districts of North Center and Lincoln Square. That leaves Ravenswood homes to bear the ever increasing burden of city government, schools, public health and public justice systems provided by local governments.

There are 6 TIFs in the Ravenswood neighborhood

As discussed in earlier articles, three of the Ravenswood TIFs are having revenues ported or declared surplus from their districts, meaning those funds are not available to those TIF districts. Yet, the districts are at risk of urban decay, according to the law which establishes TIFs.

For example, the 1999 study that created the Western Avenue North TIF notes five factors were present “to a major extent” in the area that encompasses much of the Lincoln Square business district:

  • Depreciation of physical maintenance
  • Deterioration
  • Structures below minimum code
  • Obsolescence and
  • Deleterious land use or lay-out

The 1999 study also says the area lacked community planning and had excess vacancy.

The Western Avenue TIF, which spreads along Lawrence from Virginia Avenue to Ashland, Western from Montrose to Foster, Damen from Foster to Leland and Lincoln from Foster to Montrose, has only one TIF project, according to a 2009 report prepared by the city: the 4800 Damen LLC project. The TIF has committed $15,385,283 to the one project of mixed commercial and residential use. The TIF has also committed $2,000,000 to a small business development project.

Key Lincoln Square properties, for example the Davis, were not included in the TIF, records indicate. As the Bulldog noted in an earlier TIF story, the city plans to drain $3.2 million from Western Avenue North in the coming budget.

Original map of the Western Avenue North TIF with land use

Original map of the Western Avenue North TIF with land use. Credit: City of Chicago

It is the third year in a row that the TIF has been raided, records indicate. A total of more than $7.6 million has been moved from that TIF in the past three years according to the reports filed by the city.

In total a net of $2.9 million in TIF funds will be removed from the six Ravenswood TIF districts next fiscal year, according to reports filed by the city.

201 Miles to Springfield: Some Aldermen not sharing the pain: Chicago News Coop

While Mayor Richard Daley has taken 25 furlough days off this year, reducing his pay by nearly ten percent, some aldermen are not cooperating, according to a study by the Chicago News Cooperative.

Five aldermen have taken no days off according to the study.

Of aldermen in the Ravenswood area, most have taken between 18 and 19 furlough days, with two, Eugene Schulter and Mary Ann Smith taking just 10 furlough days.

That gives the two aldermen pay cuts of about four percent and ties them at 38th place among the 53 municipal office holders considered in the study.

The report accompanying the study notes city employees have been asked to take 12 furlough days so far this year and will not be paid for an additional 12 holidays formerly paid by the city. The proposed city budget asks employees to continue the furloughs, taking five weeks off without pay, the report states. The figures are only through this month and future furlough days taken by each alderman may be different by the end of the year.

Name Office Furlough Days taken
Eugene Schulter Ald 47 10
Mary Ann Smith Ald 48 10
Dick Mell Ald 33 18
Pat O’Connor Ald 40 18
Tom Tunney Ald 44 18
Scott Waguespack Ald 32 19
Richard Daley Mayor 25

201 Miles to Springfield: Emanuel, Chico, Braun critisize parking meter deal

The Chicago Tribune’s Clout Street reports yesterday that three mayoral prospects critisized the parking meter deal and the use of its proceeds.

According to Clout Street Emanuel (D-Old Ravenswood) said the meter lease “didn’t work.”

“I do have a problem because the money was not used for its original intended purpose, which was to invest in key infrastructure, investments in making the city a more productive city economically so you can grow jobs,” he told Clout Street.

Chico and Braun also critisized the deal and the handling of the revenue from it by the city.

Widely criticized city budget moves forward; the silence of officials

This morning the Chicago daily newspapers are reporting that the Chicago City Council Budget Committee passed Mayor Daley’s 2011 budget recommendation with minor changes. The budget will use much of the remaining parking meter proceeds and revenues from TIF districts to plug a deficit of about $655 million according to WTTW’s Chicago Tonight.

The committee, it is reported, passed the mayors proposal unanimously.

The one substantive change to the budget was the council is rejecting $3.5 million of cuts to local chambers of commerce. That money, which is largely unaccounted for by the chambers, was used by the Lincoln Square Chamber of Commerce to pay for outside public relations counsel, the chamber has told media outlets.

In other chambers the funds pay for salaries and other services.

At a meeting of the Lincoln Square Chamber of Commerce last month Schulter announced he would oppose any budget that did not fund the chambers.

The Bulldog contacted Ald Eugene Schulter (D- North Center), Pat O’Connor (D-Budlong Woods) and Dick Mell (D-Irving Park) to ask about the budget proposal and to hear their thoughts on the budget debate. The three aldermen sit on the Budget Committee.

The Bulldog contacted the aldermen twice by e-mail over a period of a week for their views, without any reply from any of them. The Bulldog looked at their web pages (the links for the web pages are in the paragraph above), but there was no discussion of the budget.

The Bulldog also contacted the Rahm Emanuel campaign, requesting their views on the budget. Emanuel’s campaign didn’t respond either.

The only person who did respond was Ameya Pawar, a North Center challenger to 47th Ward Alderman Eugene Schulter.

Independent of the silence of the elected officials the budget did receive other reviews however:

In the comments The Bulldog has listed Pawar’s unedited reply. There you can see the questions put to the aldermen, but not answered by them. Directly below, a graphic of the proposed savings listed by the Chicago Inspector General and the Civic Federation.

Beyond that, on our Facebook page is a tab for suggestions. You can use it to give your suggestions on resolving the city’s budget issue.