Chicago, like New York City, is becoming a microcosm of California, a two-tiered society where public policy props up and privileges the tastes of the rich while ignoring the needs of the poor. A new piece in City Journal explains that Mayor Rahm Emanuel’s ostensibly painful and difficult cuts to services like public safety and schools are actually more like a diversion of funds from blighted residents to wealthy ones. Hundreds of millions of dollars have been used to fund a bike share program, a “riverwalk”, a hiking trail, and (what else?) a sports arena, even as Chicago public education and law enforcement sectors are facing deep crises.
Chicago’s TIF program has long been criticized as a mayoral slush fund. Ostensibly a tool for redeveloping blighted neighborhoods, TIF enables any new tax dollars generated in a district—the so-called “increment”—to be fed back into a special fund that can only be spent in that district. This projected revenue stream can be used to back bonds to finance infrastructure and jump-start development. At least, that’s the theory. Many of Chicago’s most prosperous neighborhoods are located in TIF districts and have generated huge incremental revenues. The Central Loop TIF district took in nearly $1 billion over its lifetime. When the district was slated to expire due to a statutory sunset, the city created the giant LaSalle Central TIF—covering a booming part of the West Loop—to replace it. None of the taxes from new developments in these districts flows automatically to police, libraries, parks, or schools. The funds go into the city’s TIF account, and the mayor has discretion on how they’re spent. Some TIF funds have been used for construction of new schools, but more than half have been handed out as subsidies to private businesses. The true purpose of Chicago’s TIF districts—which now take in about $500 million per year—appears to be tending to high-end residents, businesses, and tourists, while insulating them from the poorer segments of the city.
Chicago is clearly afraid of sharing Detroit’s fate: losing wealthy residents and their sizable tax dollars. Mayor Emanuel is banking on the hope that keeping the rich folk happy will provide enough revenue over the long run to fund the social services that the less fortunate depend on. This is a big gamble: if the $100 million waterfront boardwalk and $54 million biking trail turn out to be boondoggles that do nothing for the one percent, the closure of dozens of public schools and thinning out of a police force during an internationally famous murder epidemic will be difficult to defend. Our guess is that Chicago will continue to hemorrhage the residents it has faster than it can attract high-income new ones.
New York’s Blue Suicide. By Walter Russell Mead. Via Meadia, October 15, 2012.
Well-Heeled in the Windy City. By Aaron M. Renn. City Journal, October 16, 2013.
Rahm Emanuel splurges on amenities for the elite, while poor and middle-class Chicagoans suffer.
The gentry liberals. By Joel Kotkin and Fred Siegel. Los Angeles Times, December 2, 2007.
They’re more concerned with global warming and gay rights than with lunch-pail joes.
Kotkin and Siegel:
After decades on the political sidelines, liberalism is making a comeback. Polls show plunging support for Republicans and their brand of conservatism among young, independent voters and Latinos. But what kind of liberalism is emerging as the dominant voice in the Democratic Party?