How else to explain the schizoid ability of the city's major civic associations and mainstream media to rant and rave about Chicago's mounting pile of crises while remaining willfully blind to the billion dollar scandal behind them. The mayor has taken a sound development tool - the TIF, or tax increment financing, district, used to jump-start private investment in depressed neighborhoods - and transformed it into a massive slush fund that diverts nearly $400 million each year from schools and basic city services.
The only Chicago journalist regularly paying attention to the scandal, the Chicago Reader's Ben Joravsky, has an article this week analyzing information the city has finally, after years of keeping them it a deep, dark secret, posted about the TIF program on the city's website. Joravsky added up the amount of TIF money sitting in bank accounts, as of December 31st. And what did he find? How does $895,000,000 strike you?
Let's put this in perspective: that number is 8 times the mayor's proposed $108 million hike in property taxes. It's 8 times the CTA's 2007 operating deficit, and 3 times the mayor's proposed $293 million overall increase in taxes, fees and fines. It's even more than the outrageous $888 million dollar in tax hikes sought by Cook County Board President Todd Stroger.
And yet all the pontificators continue to swallow the mayoral kool-aid. They faithfully cover the mayor's press conferences demanding Springfield get it's act together to save the CTA, but they always seem to forget to mention that Diamond Jim Brady's own contribution has been stuck at a paltry $5,000,000 a year for a better part of a decade. Even as he points fingers everywhere else, he's shown absolutely no interest in increasing it.
Yet Daley's administration has earmarked $40 million in his TIF slush fund for the Chicago Mercantile Exchange/Chicago Board of Trade, despite the fact that:
- the CME/CBOT has never threatened to leave the city.
- far from being economically distressed, it's rolling in money, recently announcing a 94% increase in third quarter profits, to over $200 million.
- it's not adding jobs, but slashing them, as it eliminates redundancies in the merged organizations.
No matter - at a time when basic CTA maintenance was being deferred for lack of funds, $217 million was commited to the superstation project and $42 million of that was TIF funding. Now it's become the nightmare that keeps on giving. Crain Chicago Business's Greg Hinz is reporting this week that cost overruns on the project are at $100 million and counting, with TIF funds again being eyed as one way to plug the deficit.
In August, Crain's reported the city was talking with Macquarie Bank, which did the $1.8 billion 2004 deal leasing the Chicago Skyway from the city, about a possible similar deal to bail out the city from its station from Hell. It would become the latest addition to the mayor's ongoing fire sale - with Midway airport next - of Chicago's assets. The mayor gets a huge pot of money upfront in exchange for a 99-year lease, and unseen future residents, onto the fifth generation, get stuck with the problems. And if you don't think there's a good chance of there being problems, check out Fortune magazine's cautionary article where one analyst portrays Macquarie's business model as bearing "the hallmarks of a Ponzi scheme." In the case of the Skyway deal, Fortune reports: "In 2007 the Skyway will pay interest of just $129,000 on $961 million of debt. But the interest payment for 2018 is to be $480 million - that's not a typo."
Mayor Daley has been in office nearly two decades. He still struts down the street in his pinstripe master manager suit, but the threads have begun to fray. Can Chicago's media and civic elite ever bring themselves to call him to account? Or will they persist in seeing only what he wants them to see, the emperor's new clothes, until the garment completely disintegrates and we find only Abe Beame underneath?