In 2018 Chicago was at the crossroads: politics, money, and fed raids

2018 was a year that Chicago lost more than it gained in almost every area: population, revenue, (other than taxes), the continued erosion of confidence in public officials, dents in public education, and personal safety.

First, and foremost, was the startling news, in September, that Mayor Rahm Emanuel was not going to run for reelection, seemingly, because he saw the writing on the wall, and it was not a good script: the political fallout after the Laquan McDonald shooting, and the infamous police videotape that critics said he suppressed, with the help of former states Attorney, Anita Alvarez, until a judge ordered its release; and, all ending with a tattered reputation, and a loss of confidence, from many residents, especially from African Americans, who have repeatedly called for his resignation.

With the trial verdict pending of McDonald’s shooter, Jason Van Dyke, the city was tense and relentless, and there were calls from activists, nation wide, to come to Chicago, in a show of defiance and solidarity, and many expected violence.

In sum, perhaps, and fearing the spectacle of street rioting, and noisy demonstrations, filling the national media, Emanuel bade his adieu, and still others, without evidence, saying that his former boss Barack Obama advised him to do so.

Emanuel was taking heat on many sides, but also for becoming Version 2.0 of the Daley mayors, both father and son, replete with an ironclad will, and a rubber stamp city council.  And, adding to the list of complaints, for his critics, was that he was holding fast to Tax Increment Financing monies, as a slush fund, as his predecessors had done.

Going even further, there was a feeding frenzy, when private emails of Emanuel were released, after a lawsuit by the Better Government Association  and reported by a Chicago Tribune investigative report, and the Chicago Sun-Times, as evidence of influence peddling.

Here they all come

Emanuel’s  decision, not to seek reelection, opened a floodgate of mayoral candidates, mostly familiar names to any Chicagoan, including Cook County Board President Toni Preckwinkle, state Comptroller Susana Mendoza, ex police chief Garry McCarthy and some old school names, such as Paul Vallas and Gary Chico, plus Cook County Commissioner Bridget Gainer, who later dropped out.

City cynics have labelled them as beholding to the machine, while stating that they have no ties to established politicians, such as Ed Burke and notably after the Fed raid of his city hall and ward offices there were predictions, by some, that he would  skate away unscathed, with others saying, it was a move, by the Feds, to clean up our city’s legendary corruption.

But many of the above mentioned candidates had long-term ties to him, and all were noticeably quiet, after the event, except, Lori Lightfoot, who gave it to the press, straight, when she said: “It seems all these other folks are running for cover and don’t want to talk about him, but frankly, that underscores the fact that we’ve got different factions of the political machine manifested in Mendoza, Preckwinkle, [Bill] Daley and Chico and others who don’t want to rock the boat because they are very much wedded to the status quo.”

Preckwinkle through her spokesperson said that she did not know Burke, yet the Trib, revealed that Burke had thrown a recent fundraiser for her at this South Side home, a move that Tribune columnist Kristen McQueary called in a recent Op-ed piece, an “anointment.”

As to be expected, once the candidates amassed the required 25,000 ballot signatures came charges, and counter charges, of fraudulent and questionable signatures, with Preckwinkle leading the pack, only to later back down, as the designated, some say, self-designated, front runner.

Notably, in a race featuring prominent women, the back and forth among them seemed to be bad form, but the fight was on, and the battle not yet won but “Lightfoot called the move a win for the democratic process, and predicted Preckwinkle’s attempts to knock candidates out of the race will backfire with Chicago voters by showing her to be “a party boss” rather than a progressive, reported the Tribune.

“What it’s done, I think, is give me an opportunity to demonstrate to people all over the city that the Toni Preckwinkle they may have been nostalgic for, that presented herself back in the day as a reformer, is gone,” Lightfoot said outside the hearing room in the basement of the George W. Dunne Cook County Office Building downtown.

Shots were also fired, from Preckwinkle, to Mendoza, even after she ended the challenge to her signatures, saying through a spokesperson, that the latter was ill-prepared for the challenges of the mayoral office.

Issuing a Parthian shot, Mendoza shot back via her campaign manager, Nicole DeMont, framing the challenge as yet another machine political tactic:

“Despite what boss Preckwinkle hoped, there will be an election and voters will hold her accountable for her record of raising taxes first and providing transparency last,” DeMont said, and added, that “Her political games are exactly why Chicago needs a mayor focused on the next generation, instead of just the next four years.”

Taking some heat after news of the fundraiser and Burke’s appearance at Mandoza's wedding reception, they both decided to not spend, monies given to them by Burke, and instead donated them to nonprofits, and the families of fallen police officers, but, for many, the damage was done.

Still crying broke, Chicago is singing the pension blues

Not to be outdone, by any one person, or events, was the dark cloud of city finances, notably pension obligations for firefighters and police, and the decision of Emanuel not to float a 10 billion bond, or did he?

When the idea became news, his critics accused him of kicking the can down the road, for his successor to deal with. But later there were rumors, to maybe adopt it, or at least, some of it, only to not entirely disown it, and then later to maybe keep it.

“Chicago's four pension systems are about $28 billion short of promised benefits, prompting Emanuel's financial team to consider a risky fix: borrowing more than $10 billion by issuing bonds to help lower that debt.”

Crain’s Chicago, then shared an article from Bloomberg Financial News, on its website, who said it is “a well tried tactic, and one that has met with success, according to a 2014 study by the Center for Retirement Research at Boston College, which found that governments on the whole came out ahead by doing so. But there’s a big caveat: Those that sold so-called pension obligation bonds after the dot-com and housing bubbles found themselves deeper in the hole when stock prices collapsed.”

Considering the volatility of the bullish market, it seems like a risky proposition, and "Historically, the timing of pension obligation bonds to seize the right window has played out fairly poorly," said Dora Lee, vice president at Belle Haven Investments. "Right now, going into 2019 and 2020, it doesn’t look like you’ll have the stock market that will be able to generate the returns necessary to make it economically feasible."

Crime lessens, then increases, but still higher than in other major cities

Crime, a major problem, for many years, in Chicago, has the good news of an abatement: 4th quarter results from the Pew Research Center, based on FBI reports showed, 1,900, and the label of “murder capital”, on a per capita basis, cannot be hung around the neck of Chicago, with Baltimore leading, followed by St. Louis.

Chicago, according to early data, showed a crime drop to 18.1 percent, and the Chicago Sun-Times reported in September that “Chicago saw 765 murders in 2016, the most in two decades. In 2017 that number dropped to 653 — a rate of about 24 murders for every 100,000 residents. That’s a drop in the city’s murder rate of 14.6 percent, outpacing the 1.5 percent drop nationwide.”

Among cities of comparable size the reduction in New York was the most dramatic, and “Even if 2018 [Chicago] comes in at a 25 percent reduction by the end of the year, that gets us back to roughly where we were in 2015, before the spike happened,” said Max Kapustin, the research director at the University of Chicago Crime Lab. “Which is a vast improvement, but still very far from a city like New York or Los Angeles, which is, I think, where Chicago ought to be,” he said in a Chicago Sun-Times interview.

“The 292 murders that took place in the Big Apple in 2017 were down from a peak of 2,245 in 1990. In fact, New York’s murder rate – 3.4 homicides per 100,000 people – is now below the national average,” noted Pews.

An exception is the recent surge in robberies in the Loop, the city’s business district, which has seen a dramatic rise in robberies, even in broad daylight, with cell phone thefts being most prominent.  There were 86 robberies there, the highest in the first quarter in 15 years, compared with 49 in 2017, and 52 in 2016.

In rapidly gentrifying Edgewater, a neighborhood on the city’s far North Side, a popular Thai restaurant, on Bryn Mawr, had a plate glass window broken, in the small hours of the morning, and according to the manager, “they stole everything,” prompting other area restaurants to post signs, in their windows, up and down the street, and its intersecting street of Broadway, stating that no cash is kept on the premise, after closing.

Our emailed inquiry to the aldermanic office of Harry Osterman received a tardy, and lukewarm response; surprising, considering the increasingly high residential and commercial rents, not to mention the new construction, featuring two residential high rises.

The city’s iconic El trains have also seen an increased spate of robberies, about 40 per week on the Red Line, according to one area detective we spoke with; and, some are attributing it to the holiday season, plus the usual pickpocketing, that we observed this summer, first hand, as attendees boarded the Red Line, after a country and music concert.

Adding further to CTA passenger concerns, there has been more than one shooting, one during rush hour, and one just before; with the former occurring in a connecting tunnel, between the Blue and Red Lines; one that is used by many travelers to and from O’ Hare airport.

A recent train robber was apprehended, by one quick footed policeman, and the cell phone returned to its owner, giving some residents a sense of relief. CPD has also announced that in addition to the annual New Year’s Eve stop points for drunken drivers, they will be a visible preference on the CTA trains.

For 2018, overall Chicago robberies are down by 19 percent, CPD stated in a recent report.

Some residents have had enough and are leaving town

Population erosion continued even further from 2017, and one source, cites that, on the average there were 156 people that left the Windy City; some for even the even colder climate of Minnesota, a fact, claimed one report, to gain better, and more consistent employment, and safety.

“Chicago’s black population has declined every year since at least 2005, something researchers believe has to do with housing, a perception that there are more opportunities elsewhere and safety, said the Minneapolis Post, in an economic report on its website, earlier this month.

Chicago is also losing its white population, especially those that are low and middle income, accompanied by working professionals with at least an associate’s degree seeking, like their black counterparts, safety, and greater job opportunities.

According to U.S. Census estimates, Greater Chicago lost more than 13,000 people between 2016 and 2017.

“That’s not a huge share of the population of the metro area of 9.5 million, but it does represent the third year of declines, and it comes at a time when most big U.S. metros are seeing their populations grow. Chicago is the only one of the 10 biggest U.S. metro areas to have seen population loss between 2016 and 2017.”

We noted two years ago that, ”While the amount lost was smaller - in thousands compared to millions of residents - “The City of Chicago itself lost 6,263 residents. Nevertheless, the Chicago Tribune notes that this is the first decline in population for the city since 1990.

“By almost every metric, Illinois' population is sharply declining, largely because residents are fleeing the state,” and the Tribune surveyed dozens of former residents who've left within the last five years, and each offered their own list of reasons for doing so. Common reasons include high taxes, the state budget stalemate, crime, the unemployment rate and the weather.

Certain demographics now stand out: a greater loss of those aged 35 to 49, with a corresponding decrease in families, and those 19 years old, and lower, suggesting that careers will be forged elsewhere.

For many, the bottom line may be the lack of affordable housing, a fact that many residents are struggling with, especially older residents.

MinnPost noted that “Significantly more Chicagoland residents are spending a bigger share of their paycheck on housing than are Minneapolis-St. Paul residents, according to a report from the Harvard Joint Center for Housing Studies.

In Chicago, 50 percent of renters are cost-burdened — defined as paying more than 30 percent of their income on housing costs — 28 percent of them severely, which means they spend more than 50 percent of their income on housing. In Minneapolis, 46 percent of renters are cost-burdened, 23 percent of them severely. When it comes to home ownership, 28 percent of Chicago homeowners are cost-burdened, 12 percent severely, while 20 percent of Minneapolis-St. Paul homeowners are cost-burdened, 8 percent severely.”

Challenges to Education: not making the grade

Chicago Public Schools took a drum beating with credible accusations of sexual abuse of students, and the continued opening of schools in gentrified areas, while schools in some black neighborhoods are slated to close, even after the 2013 closings of over 50, by Emanuel, and with decreased enrollment, overall in the classroom.

While plans to close a popular elementary school, the National Teachers Academy, and reopen it as a high school, was met fierce opposition by parents, and a judge’s order later prevented it. 

The move, say observers, was so that white parents in the area, (near South Michigan Avenue), would not have to send their teens to the black High School in Bronzeville, the heart of a once vibrant African American neighborhood; once again showing the sharp intersection between race, class, and political power in Chicago.

Chicago’s charter school teachers were the first to strike, and while it was short lived, it was enough to make headlines and cause tempers to flare, in a hotly debated discussion of which was better for students, and teachers; most of whom were lacking salary parity, with their CPS peers, while administrators and executives were earning six figure incomes.

Having sat  under a cloud, CPS now has a budget, it says is the most stable in years with increased money for universal pre-K education, with an approval for $6 billion, and an operating budget of $285 million.

Concerns remain about hiring enough special education teachers and social workers to meet the legal requirements, and many parents continue to have long standing concerns, if these can be met.

CPS said it carried $8.2 billion in long-term debt as of June 30. But, not so fast, say some, and “those debts will increase in order to finance Mayor Rahm Emanuel’s election-year proposal to take on a $989 million infrastructure spending plan that has been met with growing complaints about inequitable distribution,” Crain's Chicago said.

“The district says much of that money will come from new long-term debt, a strategy that provoked concerns from the Civic Federation budget watchdog organization.

The group endorsed the overall CPS spending plan — but worried about the district’s growing expenses in the face of dwindling enrollment and continued uncertainty over state government’s ability to keep promises to better fund education and grapple with its own financial problems,” reported the Tribune.

“With CPS’ finances just barely having reached more stable footing, the Civic Federation does not believe this is the right time to be issuing massive amounts of additional debt with only a portion going to the District’s most critical facility needs,” the watchdog group said in its annual assessment of the district’s budget.”

Goodbye Sears

Saying goodbye is hard, and even harder when the iconic Sears is leaving town, and its ill-fated marriage to K-Mart has hit the skids after the former filed for Chapter 11, and the iconic brand, the Amazon of its day, made some bad decisions, under the direction of CEO Eddie Lampert, who had no previous retail experience, and now says, Sears will come back; with few believing him.

The Economist notes that its stock market value fell from $30 billion dollars in 2007, to $69 million in mid-October of this year.

Such hemorrhaging was accompanied by the sale of the legendary Craftsman brand, and now we hear that in a $4.4 billion bid, Lampert wants to rescue the ailing retailer, who has been hit by options form online retailer, the demise of department stores, and of course,  Amazon.

An amazing year of losses, except the good news: The Chicago Bears are going to the playoffs.