Tag Archives: Chicago

Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote, by Tyler Durden

There’s a difference between levying a tax and projecting what you’re going to get from it, and actually collecting what you projected. The projections for Cook County’s soda tax didn’t quite pan out after soda sales crashed. From Tyler Durden at zerohedge.com:

In a shocking move that completely upends Chicago’s endless pursuit of higher taxes and an overly-regulated nanny state, the Cook County Finance Committee took the unprecedented step of voting to actually repeal their unpopular ‘soda tax’ last night.  The 15-1 vote followed an outcry from local residents and small business retailers who say their soda sales crashed 90% after the original ban was passed.  Per ABC:

 The vote to repeal the sweetened beverage tax was one spawned by revolt from people and business owners across the county, many who packed the board meeting Tuesday afternoon.

“I’m about 10 percent of where my soda sales used to be. It’s really hurt me deeply in the pocket and my workers also. I’m very happy you are understanding this and going to repeal this tax,” said Ken Blum, a blind vendor.

“I believe what we heard over the last ten and eleven months is that our residents are fed up, and they finally said enough. Tax fatigue has sunk in,” said Cook County Board Commissioner Sean Morrison.

“I have heard from the people in my district overwhelmingly, the business owners, the retailers, as well union members in this building who are opposed to this tax,” said Commissioner John Daley.

“Let me tell you I’m overjoyed and elated that this tax is going to go away. I mean the people in my district by an overwhelming majority don’t want this tax,” said Commissioner Richard Boykin.

The repeal of the tax still faces a vote from the full board which is expected later today.  That said, the repeal will not take effect until December 1, which is when the new budget is set to go into effect.

To continue reading: Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote

 

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The Way Chicago “Works”: Graft, Corruption, Political Connections, Bribes, Unions, by Mike “Mish” Shedlock

The incarceration rate for Illinois governors (4 out of the last 7, or 51 percent) is staggeringly high when you realize that as governors they can use all their legal and illegal powers, patronage, and connections to stymie investigations, prosecuting attorneys, grand juries, and the rest of the criminal justice system. From Mike “Miss” Shedlock at mishtalk.com:

Those who wish to understand how things work in Chicago need read a single article that ties everything together: Teamsters boss indicted on charges of extorting $100,000 from a local business.

A politically connected Teamsters union boss was indicted Wednesday on federal charges alleging he extorted $100,000 in cash from a local business.

John Coli Sr., considered one the union’s most powerful figures nationally, was charged with threatening work stoppages and other labor unrest unless he was given cash payoffs of $25,000 every three months by the undisclosed business.

The alleged extortion occurred when Coli was president of Teamsters Joint Council 25, a labor organization that represents more than 100,000 workers in the Chicago area and northwest Indiana.

Coli, 57, an early backer of Mayor Rahm Emanuel, was charged with one count of attempted extortion and five counts of demanding and accepting prohibited payment as a union official.

Coli could not be reached for comment, but a statement posted Wednesday on the Teamsters Local 727 website announced he planned to retire at the end of the month after 46 years in the union.

In the statement, Coli said he had decided it was time “to begin a new chapter” and that he wanted to spend more time with his family.

The Coli family has been active in politics for years and is well-known for spreading around union cash to various candidates. Coli and his relatives have also been accused in civil lawsuits in both state and federal court of running the union like a racket — accusations they have vehemently denied.

To continue reading: The Way Chicago “Works”: Graft, Corruption, Political Connections, Bribes, Unions

Breaking News – Russian Hackers Behind Thousands of Chicago Murders, by Christopher Manion

Russian hackers are also behind global warming, the disappearance of Amelia Earhart, rush hour traffic in Los Angeles, slow mail service, and the obesity epidemic. From Chris Manion at lewrockwell.com:

Sources in the CIA tell LRC that the carnage that has killed thousands of Chicagoans in Obama’s American hometown since 2008 has been caused by Russian gangs working from submarines located underwater in Lake Michigan just east of Midway Airport in Chicago.

“Russia’s hackers have used cutting-edge digital technology to enter the city undetected, it’s like amazing,” said a CIA source, one of several agency specialists who spend most of their time placing stories in the leak-friendly media. “The Russian agents have state-of-the-art digital camouflage that makes them look totally like Americans,” she explained. “They are virtually undetected. They can hijack SUV’s with tinted windows, drive around town shooting up the place and get back to the sub, all without a hitch. It’s been going on for years.”

When asked how the operation was kept secret, she became agitated.

“No one cares! They kill people on the streets, kids sitting on porches, even families sleeping in their homes,” she replied breathlessly. “They kill hundreds of people a year, and no one seems to care.”

The irate CIA agent knows that she is risking her job – and possibly a stiff jail sentence like General Petraeus – by spilling the beans. “Yes, it’s true – the Agency has known about this for years,” she says, “but secrecy required that we remain silent – until now.”

To continue reading: Breaking News – Russian Hackers Behind Thousands of Chicago Murders

US Pension Crisis: This is How Families Get Squeezed to Bail Out Pension Funds in Chicago, by Wolf Richter

Chicago has a $18.6 hole in it’s pensions, and its raising every fee, fine and tax it can to fill it. From Wolf Richter at wolfstreet.com:

Coming to a municipality near you.

Chicago is another trailblazer. But it’s not alone. Other cities are lining up behind it. Bankruptcy may still be the route to go. But until then, homeowners, renters, drivers, users of phones, etc. – in other words regular families who’re just sitting ducks – are going to get squeezed dry, in order to slow the momentum of the public-employee pension crisis eating up the city’s and the school district’s finances.

“Because of a new accounting rule, Chicago now has to report its pension debt on its balance sheet,” explains Truth in Accounting. “As a result, the city’s reported pension debt grew from $8.6 billion in 2014 to $33.8 billion in 2015.”

The funding hole for pensions amounts to $18.6 billion, according to current estimates, despite six years of booming asset prices. What is this going to look like when asset prices sag?

The City Council approved Mayor Rahm Emanuel’s $8.2 billion budget yesterday. Crisis or no crisis, it’s up 4.8% from last year. There wasn’t anything to debate because the tax and fee hikes had been done outside the budget process.

But this is what Chicago has to deal with. On November 9, S&P Global Ratings cut Chicago Public Schools (CPS) to deep junk (triple-C), citing the district’s “continued weak liquidity in its most recent cash flow forecast and reliance on cash flow borrowing, combined with the increased expenditures in the district’s new labor contract that exacerbate the district’s structural imbalance challenges.”

On Monday, the district scrapped efforts to sell $426.3 million of bonds this year, citing “changing market conditions.” It coincided with the post-election jump in interest rates. A spokeswoman told the Chicago Tribune, “We’ll sell the bonds when market conditions are optimal.”

Last January, the district already delayed an $875-million bond sale “that became tainted by bankruptcy talk,” as Reuters put it at the time.

On November 7, Moody’s affirmed its junk rating for the city (Ba1), with negative outlook, citing “a very weak balance sheet arising from high and growing unfunded pension liabilities.”

The rating acknowledges the benefit of significant tax hikes [we’ll get to this “benefit” in a moment] that will fund increased pension contributions and reduce the risk of plan asset depletion. However, the city’s unfunded pension liabilities will continue to grow, albeit at a slower rate.

Moody’s also stamped its “negative outlook” on Chicago’s rating due to the risks of “potential contagion” from the school district:

Sustained fiscal stress at CPS could pressure Chicago’s credit profile in various ways, from constraining the city’s practical ability to raise revenue for city obligations to raising the city’s borrowing costs.

The city’s borrowing costs have already blown through the roof, as our Chicago gadfly from Truth in Accounting, Bill Bergman, points out: Sinkhole City Chicago in Worse Fiscal Shape than Detroit?

But even squeezing the families in the city for their last dime isn’t going to solve the problem, according to Moody’s:

Further, although the significant tax increases adopted by the city will support higher pension contributions, high and growing pension debt remains a key credit challenge.

These families have been hit, and will continue to get hit, by a hail of tax, fee, and fine increases. Pension promises, made by politicians to buy votes and curry favors with special interest groups years or even decades ago have turned out to be toxic for municipal budgets. Chicago may well be the next big city to be felled by them. Meanwhile, families are getting squeezed.

To continue reading: US Pension Crisis: This is How Families Get Squeezed to Bail Out Pension Funds in Chicago

Sinkhole City Chicago in Worse Fiscal Shape than Detroit? by Bill Bergman

This article features some eye-opening graphs. From Bill Bergman at wolfstreet.com:

If the City of Chicago Were a Bank …

One of the lessons we didn’t learn in the savings and loan crisis in the 1980s was the importance of “prompt corrective action” in bank regulation and supervision.

Back then, underwater “thrifts” were kept afloat with less-than-truthful regulatory accounting principles that hid their effective insolvencies, allowing well-connected parties to feast off the public purse, unleashing incentives that ended up trebling the cost to taxpayers.

In theory, “improved” legislation and regulation arrived, under the cry of “never again.” Among other things, the new systems developed “tripwires” designed to force intervention into failing institutions before large and/or widespread failures threatened the public purse again.

Less than twenty years later, the Big One arrived in 2007-2009, despite (or because of) these fixes.

How about municipal governments? Why do city and state “balanced budgets” sound like those “tripwires?”

For some perspective on questions like these, let’s take a peek at the Midwestern cities of Indianapolis, Chicago, and Detroit.

In 2013, Detroit filed for bankruptcy under Chapter 9 of the federal bankruptcy code. What did some simple financial trends look like in Detroit before, during, and after that development?

Indianapolis is a good place to start. The state of Indiana and its largest city have been in relatively good shape in the last decade, compared to their immediate northern and western neighbors. Here’s a look at the difference between general revenues and net expenses (leading to a bottom line measure akin to “net income” in the private sector) for the city of Indianapolis from 2006 through 2013.

The bottom line took a hit in Indianapolis in 2009 – not altogether unreasonable, given that the economy had entered the worst economic and financial crisis since (at least) the Great Depression. By 2013, the bottom line poked its head above zero, again.

How does that picture for Indianapolis compare to Detroit – which filed for bankruptcy in 2013? See below.

That 2009 downturn in Indianapolis doesn’t look so bad, compared to Detroit. And Detroit persistently spent hundreds of millions of dollars more than fees, grants, and tax revenue in the five years before its financial woes were addressed in bankruptcy.

The City of Chicago couldn’t possibly look as bad as Detroit, could it? For one thing, the City of Chicago has retained a greater measure of control over its destiny than Detroit, given the “home rule” authority it has under the Illinois State Constitution. And the City of Chicago regularly claims to operate under a “balanced budget,” which the city notes “is required by state law.”

That means Chicago spending should be in line with revenue, and it should be close or above zero, on the Detroit and Indianapolis charts above, shouldn’t it?

To continue reading: Sinkhole City Chicago in Worse Fiscal Shape than Detroit?

Bread and Circuses: The F-35 Buzzes Over Chicago, by Jared Labell

The military likes showing off its toys, and what better place than the president’s hometown? From Jared Labell at antiwar.com:

Jared Labell is executive director of Taxpayers United of America (TUA), a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded in Chicago, Illinois in 1976 by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. Labell’s work has appeared on ABC, CBS, NBC, and Fox television, WBBM and WBEZ radio, and published in the Chicago Tribune, Chicago Sun-Times, other various newspapers, and the Future of Freedom Foundation.

If the city of Chicago were a house, the State would have condemned it as blighted property long ago, bulldozing its rotten wood and crumbling concrete structure into a pile fit for a funeral pyre. Chicago hasn’t been condemned yet, despite the city’s abundance of bureaucrats, infamous history of government corruption and violence wrought upon its residents, and its atrocious financial standing. Chicago remains a dilapidated house, but one that’s on the verge of burning down in a self-inflicted economic arson fire.

With that in mind, the city will begin to close out the summer this weekend with the 58th Annual Chicago Air and Water Show on Saturday August 20th and Sunday August 21st along North Avenue Beach. Similar to the bread and circuses of empires past, Chicago annually distracts taxpayers with big, shiny objects to take their minds off of the political and economic failures of their government. This year’s free event is no different, as festivities are draped in the flag and promoted heavily with food, drinks, and fun for the entire family. Among other participants and aircraft featured in the event, the centerpiece of the show this year is the rollout of the notorious F-35 Lightning II Joint Strike Fighter.

Corporate sponsors Shell and Boeing, as well as media outlets like WBBM Newsradio, ABC 7 television, and The Chicago Tribune, help underwrite the cost of the show, making it free for the public’s enjoyment. But don’t thank these sponsors for the free entertainment just yet, because nothing is free, and when the F-35 is involved, rest assured that taxpayers are picking up the tab, one way or another.

Just a few weeks ago, Antiwar.com published my synopsis of the F-35 program – I’m Paying Taxes, But What Am I Buying? – which detailed the $400 billion jet’s beleaguered history of cost overruns, operational fiascoes, and the opportunity costs of maintaining a weapons system that’s projected to incinerate trillions of dollars from US taxpayers throughout the estimated duration of its production and deployment lifecycle.

The Straus Military Reform Project, part of the Project on Government Oversight’s Center for Defense Information, offers another detailed rundown of the most expensive weapons system in history. Readers are encouraged to become well-acquainted with the Department of Defense’s worst boondoggle, as the F-35 is a prime example of how the government misspends tax dollars at an alarming rate and with little to no accountability.

To continue reading: Bread and Circuses: The F-35 Buzzes Over Chicago

 

Soaring Chicago Gun Violence Amid ‘Toughest Gun Laws’ Crushes Clinton Narrative For More ‘Controls’, by Tyler Durden

Preventing law-abiding citizens from owning and carrying guns for their own defense increases rather than decreases gun violence. From Tyler Durden at zerohedge.com:

In continued defiance of the Democrat narrative calling for stricter gun laws, Chicago’s homicide problem just keeps getting worse despite gun laws that are already among the most restrictive in the country. If fact, even the New York Times described Chicago’s gun laws as some of the “toughest restrictions,” saying:

Not a single gun shop can be found in this city because they are outlawed. Handguns were banned in Chicago for decades, too, until 2010, when the United States Supreme Court ruled that was going too far, leading city leaders to settle for restrictions some describe as the closest they could get legally to a ban without a ban. Despite a continuing legal fight, Illinois remains the only state in the nation with no provision to let private citizens carry guns in public.

Data compiled the Stanley Manne Children’s Research Institute revealed that homicide rates in Chicago increased to 18.81 per 100,000 in 2015 vs. 17.64 in 2010, a 7% increase. That’s compared to a 6% decline for the United States overall for the same period and over 4x the national average. In fact, at 18.81 homicides per 100,000, Chicago would be ranked as the 201st most dangerous country out of the 218 countries tracked by the United Nations Office on Drugs and Crime.

Perhaps even more shocking is the disparity in homicide rates by ethnicity. African American homicides increased 19% between 2010 and 2015 vs. 8% for Caucasians and a 2% decline for Latinos. Data revealed that African American homicide rates were eight times higher than Caucasians in 2005, 16 times higher in 2010, and 18 times higher in 2015.

Homicide rates were the highest among young people with the highest rates experience among 20-24 year olds at 64.28, a 48% increase in 5 years.

Finally, despite some of the most restrictive gun laws in the country, 87% of homicides were committed with firearms, up from 79% in 2010. So how could the city that has the toughest gun laws in the country, laws described as the “closest they could get legally to a ban without a ban,” also have some of the highest gun-related homicide rates? Could it be, that criminals looking to use weapons for violence have a lower propensity to follow laws and that by banning guns you’re really just taking them out of the hands of law-abiding citizens that wouldn’t have used them for violence anyway? Just a thought.

http://www.zerohedge.com/news/2016-07-30/chicago