Forced into the Spotlight, Gov. Rauner Cautiously Walks Back Earlier Statements

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As more events unfold in the realm of Chicago Public Schools following Illinois Gov. Bruce Rauner and Chance The Rapper’s recent summit on local education funding, children remain helpless bystanders as politicians with questionable motives control their fates.

The meeting between the pair on Friday, which has been widely discussed, prompted Rauner to circulate a memo on Monday. The memo lays out two options to address the budget gap that the country’s third-largest school district is facing. Rauner released his plan just before Chance’s press conference, where the rapper personally donated $1 million to the struggling school system, as outlined in this These Days piece. In the process, Chance pointed his finger at corporations, local governments and wealthy individuals to follow suit.

As a refresher, Rauner vetoed $215 million in pension relief last year, as he said it needed to be tied to a larger pension reform plan for CPS.  The budget-starved school district had already included this money in its annual budget. To put this in perspective, CPS has to pay its employees' pension fund $721 million by the end of June (DNAinfo). Gasp.

One option, according to the governor’s memo, is to grant Mayor Rahm Emanuel the one-time authority to transfer Tax Increment Financing (TIF) money from the city’s districts to the school district, due to the “extraordinary mismanagement of both the city and CPS budgets.” Legislators are currently drafting this legislation in case the General Assembly, the governor and other advocates come to this conclusion.

The alternative is to pass the pension bill separately from the larger effort to reach a state budget agreement, known as the “Great Bargain” package. The president of the Illinois Senate, John Cullerton, has outlined a plan for statewide pension reform—SB16. This plan, which is pending in the Senate, has revisions for state pension systems and the Chicago teachers’ pension system, enacts a new Tier 3 hybrid pension plan for the state and local governments, and includes other amendments to lessen state pension payments in the future, according to Rauner’s memo. This bill is presently part of the “Great Bargain,” but Rauner suggested breaking it off.

Yes, this is confusing, as the Senate tried twice to split this out, but the governor vetoed it, saying the pension reform bill had to be part of a comprehensive plan, according to Cullerton’s spokesman John Patterson (Chicago Sun-Times). Then when the Senate tried to create a comprehensive plan, Patterson said, the governor said the pension reform bill should stand alone. On Tuesday, however, the governor confirmed that he supports signing the pension and CPS bills into law regardless of whether they are part of the complete budget package (Chicago Sun-Times).

In recent weeks, the plan outlining both a revised state budget and adjustments to the state's pension system failed to garner enough votes to pass the Senate, twice (DNAinfo). In these instances, the plan had to pass as a whole. The Senate Democrats and Rauner have continuously been at odds regarding the budget proposal in its entirety, but specifically about the state pension reforms, as the governor wants lawmakers to make broader cuts. Progress on the package stalled last week in the Senate, after the bill failed for the second time. Cullerton blamed Rauner for interjecting and influencing the Republican lawmakers who helped put together the plan (The Chicago Tribune).

Rauner denied he played a role in swaying Republican lawmakers to vote against the deal, and said that he only told them to keep working until they reach a reasonable compromise (The Chicago Tribune). For some reason, the latter is still not very comforting. The governor did admit that he was critical of certain aspects of the bill. Rauner disliked how the package increased income taxes permanently and only froze property taxes temporarily, and he wanted more aggressive changes to the workers’ compensation system, although he did not speak to what those changes might include (The Chicago Tribune).

On Tuesday, following the killing of the proposal, Senate Democrats held hearings where they asked Rauner’s agency leaders what exactly they are looking for in terms of cuts (The Chicago Tribune). It looks like there is still a decent amount of work to be done before both legislative chambers, along with the governor, will be comfortable approving the bill, despite Rauner’s new stipulations. No shocker there.

Now, let’s move onto TIF funds and their significance. TIF funds, like most topics connected to Chicago’s funding systems, is a hotly debated subject.

Chicago uses TIF funds to promote public and private investment and economic development. This might include building and repairing roads and infrastructure, cleaning polluted land, and making productive use of vacant properties (The City of Chicago’s Official Site). These funds come from the growth in the Equalized Assessed Valuation (EAV) of properties within a specified district over the course of 23 years. When Chicago names an area a TIF district, the area’s property tax amount is set as its base EAV. As the district’s property value increases, any property tax growth above that fixed amount can be put toward redevelopment projects within that area. Items an area might have to classify it as a TIF district are code violations, excessive vacancies, overcrowded facilities, deterioration, inadequate utilities, or a lack of ventilation, sanitation, or physical maintenance (The City of Chicago’s Official Site).

This is not the first time the government has used TIF funding to assuage CPS. Back in October, Emanuel used TIF funding to avoid a teacher strike, despite saying that he opposes measures like this that divert money away from one-time revenue sources to pay for school funding (DNAinfo). The mayor took $88 million from TIF districts, in a move the Chicago Teachers Union supported, but his floor leader, Ald. Pat O’Connor (40th), said was not sustainable (Chicago Sun-Times).

Chicago’s TIF funds are a controversial topic, as residents have criticized government officials, specifically Chicago’s former mayor, Richard M. Daley, along with our current mayor, Emanuel, for abusing and misusing these funds. Many Chicagoans accused Daley of dipping into TIF buckets to persuade corporations to stay or move downtown.

From 2011, when Emanuel came into office, until March 2015, Emanuel directed about $234 million out of $1.3 billion in TIF projects toward private development (Crain’s Chicago Business). According to Chicago Reader, which looked at the city’s records, about half (48 percent) of the $1.3 billion went to the Loop and its surrounding areas during this time period, validating the views of those who claimed that politicians might use these funds to gentrify neighborhoods downtown rather than to help the rest of the city. About 16 percent of TIF funds went to the South Side and about 9 percent went to the West Side during these four years (Chicago Reader). It might not help that the formula for TIF funding allows areas that are gentrifying rapidly to collect more funds than poor communities can.

During this same time span, though, Emanuel spent about $300 million on resurfacing and reconstructing the city’s streets, about $155 million on fixing or creating new Chicago Transit Authority Stations, and about $76 million on residential projects such as low-income and senior housing (Crain’s Chicago Business). Emanuel also emphasized that he uses TIF money to pay for school construction, as about $54 million of the $1.3 billion went toward school projects (Crain’s Chicago Business). This, however, was a very small percentage of the overall amount Emanuel spent in TIF funds.

Back in October, Ald. Harry Osterman (48th) justified CPS’ expenditure of TIF funds by saying that while development can wait, “What can't wait is the education that will be lost next week if kids are out of school. What can't wait are the cuts that CPS continues to go through that affect the classrooms” (DNAinfo). At the end of the day, CPS needs to get funds from somewhere, and the governor is not giving CPS many options.

The governor’s memo also recommended that Chicago update its policy on TIF districts and collect taxes for education.

Emanuel said the governor’s two proposals did not present a viable solution. The mayor’s spokesman added that the governor needs to step up, as Chicago taxpayers have, and eradicate Illinois’ separate and unequal funding for students in CPS (DNAinfo).

Overall, Illinois politicians continue to prove they are unqualified to put out the fire they have lit on CPS, as they keep adding measures that set CPS ablaze. Due to recent budget cuts, CPS was forced to freeze about $31 million in schools’ discretionary funds, limiting resources and after-school programs, and CPS employees have to take four unpaid furlough days later this year, as I discussed here: These Days.

Rauner and Emanuel’s childish feuds do not help the overarching situation. Chance described it best: This whole f****** thing is embarrassing to be honest.

The public bickering is embarrassing indeed. Emanuel, at a ribbon-cutting event for a downtown office tower, said, “I think in the last 48 hours, everybody has come to the conclusion that the emperor wears no clothes,” and then in case we didn’t understand whom the jab was directed at, he added, “the governor” (The Chicago Tribune). Although, from Rauner’s view on his high horse, he might think the two titles are synonymous.

In an equally mature fashion, Rauner’s spokeswoman fired back, saying, “Sounds like someone has a Napoleon complex” (The Chicago Tribune). It looks like they are reading the same books as President Donald Trump about how to exude professionalism and respectability as a leader, but we can save that topic for another article.

While Rauner and Emanuel are making faces and sticking their tongues out at each other, the real children of Chicago’s playgrounds are being burned by less programs, decreased school days, inadequate resources and frustrated teachers, outlined in this These Days article.

CPS officials said they must close school on June 1 instead of June 30 if they do not get more money, in order to save $91 million, and they may also cancel summer school for all students except those in high school to save another $5 million (DNAinfo). This is due to the $129 million CPS budget deficit that still exists from Rauner’s veto last year.

Chance, after his meeting with Rauner on Friday, said he was frustrated by the governor’s actions and that Chicago’s children should not be held hostage because of political positioning. Read more about this here: These Days. In a move that received national recognition from leaders such as Michelle Obama, Chance announced that he would donate $1 million to CPS for arts education, while pushing others to follow his lead. The rapper encouraged wealthy Chicagoans to donate to CPS—for every $100,000 raised, Social Works Chicago, the nonprofit that Chance co-founded, will donate $10,000 to CPS. The Grammy-winning artist gave his first $10,000 to Westcott Elementary School, a school near his childhood home on the South Side, which saved the school’s after-school math and enrichment classes.

So far, Chance’s memo seems to be overshadowing Rauner’s. While Rauner is circulating an agenda full of empty promises for CPS children, as vetoes, failed bills, budget cuts and silly fights hinder progress, Chance is following up on his word: Chicago Public Schools and I did not lose today. Please don't let that become the narrative. Monday morning I'll have a plan. Per Chance’s tweet, Monday brought money, calls to action and widespread recognition to a school system in need. Hopefully Chicago’s politicians will start following this hip-hop artist’s narrative.