Chicago's Taxation Tug of War
Who will have the final say on Chicago's budget?
Human beings have wrestled with financial issues since the beginning of time. The Bible has multiple sentiments regarding debt and preparedness. For example, Proverbs 6:6-8 states: “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”
For those non-believers, turn to Aesop the ancient Greek writer of fables who warned about human foibles. “The Ant and the Grasshopper” underscores Proverbs. As the grasshopper spends his summer days in frivolity, the ant gathers food for the winter. When winter strikes, the ravenous grasshopper returns to the ant expecting a handout but is turned away. The moral of the story: be prepared.
Whichever you prefer, the morals are the same. Yet, our Illinois politicians and constituents have not gleaned wisdom from antiquity. In February’s State of the State and Budget Address, Governor J.B. Pritzker boasted about the state’s robust financial progress under his leadership. In this address he claims to have paid debts regarding anything from $1.3 billion to Illinois’ treasury fund to paying off the $4.5 billion Unemployed Trust Fund debt. What Pritzker failed to mention amid all his bluster about restoring Illinois’ fiscal health is how he found the monies to pay off some of our state’s debts: Federal COVID relief funds in the amount of $8.1 billion. However, the money is drying up, and our state is still spending like cowboys in a whorehouse.
A man with his eyes on the White House, Pritzker has convinced himself his personal fortune will pave his way to the Oval Office. Therefore, Pritzker will continue painting a rosy picture of Illinois until after the election. Meanwhile, the governor will also continue to pledge allegiance to low-income families and the children — always the children — while kicking the preverbal can down the road. In time, though, the mess Pritzker has created will return to hit us all. A governor cannot keep up profligate ways without eventual consequences. As proof, our pension deficit is still looming to the tune of $140 billion, so $500 million to decrease its shortfall is merely a spit in the ocean.
Finances in Illinois and in Chicago resemble a shell game. Promises and sleights of hand are routine in Illinois and Chicago, yet citizens never wake up. Can we blame Pritzker or Johnson for their actions, or do voters need to start looking into the mirror? Apparently, a majority of voters in Illinois seem to believe that blood can be drawn from stones.
At least Mayor Brandon Johnson was forthcoming with his plans during his campaign; he took no steps to conceal his radicalism or progressive bona fides. Moreover, Vallas was too white and his financial forecasts were not filled with enough exciting platitudes for the electorate to send him to City Hall. Yet, everyday there are mass protestations appearing all over social media over how Pritzker and Johnson plan to impose further tax hikes on residents.
In May, the Chicago City Council approved a $51 million package in aid to illegal immigrants. We are, after all, a sanctuary city. However, as reported on WTTW, a total of over $100 million was expected to be spent by the end of June. This brought much consternation to black Chicagoans, many of whom then amplified calls for the money to underwrite development in decaying black neighborhoods. This vote on the floor of the city’s legislative chamber followed then-Mayor Lori Lightfoot’s plan to house illegal immigrants in shuttered schools on the South Side. Planting the illegal immigrants in traditionally black neighborhoods poked the bear.
A perplexing strategy, it appeared as if Lightfoot and city officials deliberately attempted to stoke tension between the newly arrived illegal immigrants and Chicago’s black citizens. Perhaps our city leaders envision another Steven Spielberg remake of West Side Story. They would welcome a film crew if it could be taxed. In reality, however, what is most distressing is how those chiming in with public comments framed the issue.
Were black constituents troubled with the City Council’s spending on illegal immigrants because those monies would be better spent on improving policing, demolishing abandoned buildings, or appealing for funding for investment in crumbling neighborhoods for a better future? Not in the least. When allowed to address city officials in public forums on the matter of resettling illegal immigrants, residents expressed their displeasure and recommended the funding for the illegal immigrants be spent on reparations for the descendants of slaves. And this, readers, is why Illinois and the third largest city in the United States finds itself in this predicament. There can be no sound governance when those voting are seeking their own self-interests.
Included in what Johnson has proposed lurks a mass confusion regarding who will ultimately control taxation. Johnson, himself, has already put forth proposals to place tax increases on jet fuel, luxury home sales, and employee head taxes that he has estimated would generate $800 million in new revenue. But a conflicting proposal, titled “First We Get the Money,” submitted by the far-left groups Action Center of Race and the Economy (ACRE) and the People’s Unity Platform want to go even further to raise a staggering $12 billion. Although Mayor Johnson has attempted to distance himself from the proposal, a member of his transition team, Saqib Bhatti, co-wrote the plan. Curious.
Suggestions like a city income tax of 3.5 percent on those earning above $100,000 annually and cutting the Chicago Police Department’s budget by nine percent are only two of First We Get the Money[’s]... scheme. The manifesto written by Bhatti and Gabriella Noa Betancourt pounces on the “wealthy and corporations [to] pay what they owe,” which, by their estimations, would bring in almost $7 billion annually.
Clearly, the comrades who wrote this believe that corporations, small businesses, and those with wealth will decide to stay in Chicago rather than find greener pastures in surrounding suburbs, or out of state. But the most striking section of “First We Get the Money” shows that this report is accurately named. Bhatti and Betancourt want the city to create its own public bank to issue its own bonds without fees and “allow it to access the Federal Reserve’s lending facilities.” Additionally, it recommends that Chicago hire its own “in-house investment managers” to handle the seven pension funds that are already underwater. In other words, everything from finances, banking, and taxes would fall under the direct control of the mayor and his staff. No worry. Trust them. What could possibly go wrong?
We have a city on the brink of demise due to high crime rates, skyrocketing taxes, and an exodus of residents and businesses fleeing Chicago in droves. Instead of putting a tourniquet on our gushing wound, both ACRE and People’s Unity Platform are demanding Johnson adopt a plan that would only add to Chicago’s misery and accelerate flight from the city. Amazingly, the authors consistently refer to their budget plan as moral.
Mayor Johnson’s plans were already radical enough. Now a key figure from his transition team, Bhatti, has come forward with proposed budgetary measures, recommending what should be slashed (police) and what should be funded (CPS) based entirely on his group’s utopian view. Revealing his determination to see his group’s proposal through, Bhatti declared:
“We’re not gonna win these things without a fight...Entrenched interests and the business community are aligned against us in a major way. So the idea that we shouldn’t be ambitious, to me, is just political malpractice.”
Thus far, Pritzker has shot down some of Johnson’s tax proposals, some of which require approval by the Illinois General Assembly. One Johnson proposal that does not meet muster is the mayor’s tax placed on financial transactions. Apparently, Johnson and his fellow communists do not fully grasp Chicago’s business community. As Fox 32 reported:
“Leaders of the CME Group, for example, have reported setting up computerized trading locations outside Chicago. With the figurative flip of a switch, they could begin executing transactions beyond the reach of City Hall’s tax collectors.”
Unless Johnson uses gang bangers as enforcers to put guns to the heads of business leaders, the mayor needs to learn to work with them rather than against them.
The fact that one of Johnson’s transition team members supposedly went off the reservation with a proposal as extreme as ACRE’s is alarming. Either Bhatti truly acted independently, or this is all a charade to manipulate public opinion. Johnson will be viewed as a centric progressive, and Pritzker will be viewed as the Johnson wrangler. Thus, politically, these theatrics will propel Johnson and Pritzker forward. The losers in this game will, obviously, always be Chicago residents. Because of our unwieldy pension system, state, city, and Cook County taxes continue to increase. Ironically, affordable housing is bantered about as a human right while 20,000 Cook County properties (mostly residential) have seen property tax increases above 100 percent from last year. As reported in ABC7 News, the County Assessor’s Office claims that property values have increased tremendously.
One of the unfortunate stories concerns a Chicago Lawn resident. An area located on the southwest side of Chicago, the neighborhood demographics place median household income of $43,321. When interviewed by ABC7, senior citizen Dorothy Ross saw her property taxes increase almost 900 percent. In 2021, Ross told ABC7 she had paid under $150 in property taxes. Today, however, an astounded Ross is paying in excess of $1,400. Ross told ABC7 she will struggle to settle with the county and expressed her fear she will be forced to rely on her children or arrange for a loan from a bank to pay.
If only the mayor listened to Bhatti and Betancourt and created the City Bank of Chicago, Ross could get a loan to pay her taxes perhaps with no interest because that would be the moral thing to do. Otherwise, the County Assessor will place a lien on her home and eventually force her to sell.
Forgive the cynicism, but there is something deeply immoral at play in Chicago. For all the Obama-esque savior-in-chief qualities Johnson is projecting, everything the mayor does is calculated. For example: Slipping into an apron to demonstrate support for labor’s push for a fair minimum wage is a great photo op, but who stands to gain if tipped workers earn the same hourly wage as untipped workers? The city via taxes. Then there is the Pontius Pilate move of inviting Chicagoans to roundtable discussions where they can give their two cents on what they feel is most vital to the city’s budget.
This is where Johnson’s initial separation from “First We Get the Money” will certain to play out brilliantly. Following his making stops across the city to listen to the concerns of his people, Johnson will suddenly realize that Chicago will exponentially benefit from Bhatti and Betancourt’s ideas found in “First We Get the Money.” Johnson will come out smelling like a rose, for he is simply a conduit of change for his people. Johnson will then dole out the equity his constituents demand in spite of his own reservations, of course.
And as we march ever more toward becoming a fully-fledged communist city, the money will roll in and out just like a scene from Evita:
“And the money kept rolling out in all directions To the poor, to the weak, to the destitute of all complexions Now cynics claim a little of the cash has gone astray But that is not the point, my friends When the money keeps rolling out, you don't keep books You can tell you've done well by the happy, grateful looks Accountants only slow things down, figures get in the way Never been a [man] loved as much as [Brandon Johnson]!”
Like any good communist, Johnson will seize on the desperation of the poorest in the city and unionization will grow. Johnson will not step in when violence rages for a reason. Let minorities — especially black people he promised to help — cause disruption. For then the collective will overtake the individual. It will not be long before Johnson and his cronies will start quoting Ché Guevara: “The revolution is not an apple that falls when it is ripe. You have to make it fall.”