Levy commuter tax on suburbanites working in Chicago: group
BY FRAN SPIELMAN City Hall Reporter October 7, 2013 4:16PM
Updated: October 7, 2013 10:39PM
Downtown Chicago gained 52,404 jobs in the decade ending in 2011, but only 25 percent of them were filled by city residents, according to a new study that proposes a commuter tax to level the playing field.
In a report called, “Downtown Prosperity, Neighborhood Neglect: Chicago’s Black and Latino Workers Left Behind,” the Grassroots Collaborative set out to determine who has benefited from the hundreds of millions of dollars in tax-increment-financing (TIF) used to improve downtown infrastructure and subsidize business relocation.
They concluded that jobs created by TIF projects “should more accurately be called `job transfers,’ because only 25 percent of the 52,404 downtown jobs added were filled by Chicagoans.
From 2002 through 2011, Chicago added 129,054 new jobs with annual salaries of at least $40,000, but lost 182,983 jobs that paid less. Chicago neighborhoods lost 10,121 jobs during the same period.
Exacerbating the problem is the fact that the ten Chicago zip codes with the highest levels of unemployment also have the highest concentrations of black residents. Zip code 60636 is 96.1 percent African-American and has a jobless rate of 34.7 percent.
“Despite the constant press releases from Mayor Emanuel, the reality of who’s benefitting from these jobs and who isn’t is really devastating,” said Amisha Patel, executive director of the Grassroots Collaborative.
“If nothing is done, the gap between people who have resources and those who don’t will just widen. You’ll absolutely see this tale of two cities become more and more stark. The whole rest of the city will be a ghost town. We have to figure out real strategies to get people working in the neighborhoods.”
To bridge the gap, the report proposes that the city:
◆ impose a commuter tax to “compensate the city for public safety costs and TIF subsidies and ease the burden on Chicago taxpayers, for whom the benefit of downtown job growth has been disproportionately small.”
◆ amend the Illinois Constitution to allow for a graduated income tax to “relieve the disproportionate burden on low- and middle-income families and generate a windfall of new revenue to support public education” and critical services.
◆ increase the city’s minimum wage to raise the standard of living for Chicago’s lowest-paid workers.
◆ require companies receiving city subsidies to create jobs for city residents and pay a “living wage.”
◆ take TIF money from “wealthy downtown areas” and invest it in blighted neighborhoods, known as “Robin Hood porting.”
◆ develop a “fixed formula” for declaring a surplus in prosperous TIF districts and refunding a “set portion back” to local taxing bodies.
The Emanuel administration had no immediate comment on the study.
Two years ago, Inspector General Joe Ferguson offered Mayor Rahm Emanuel a $3 billion roadmap to financial stability that included everything from a city income tax, commuter tax and tolls on Lake Shore Drive to privatizing garbage collections and converting 20 percent of all fire suppression apparatus to ambulances.
Emanuel responded by ruling out Lake Shore Drive toll booths or raising sales or income taxes. But, Chicago aldermen warmed to the concept of a one percent commuter tax on suburbanites who work in Chicago.
“People who live outside the city and work in the city utilize our streets, our transportation systems. They’re in Chicago. They’re out of Chicago. Perhaps, there’s a price to be put on that,” Ald. Pat Dowell (3rd) said at the time.
Ald. Leslie Hairston (5th) added, “A lot of people come in the city. A lot of people outside do business with the city and we don’t recoup those dollars.”
In its report, the Grassroots Collaborative noted that Emanuel’s decision to phase out the $4-a-month employee head tax that business loves to hate has left Chicago with “no significant revenue from the increase in suburban employment, even though the increase comes directly from Chicago taxpayers’ pockets.”
From 2004 to 2008 alone, the city spent $1.2 billion in TIF money to subsidize corporate relocation and other improvements in downtown Chicago, the report states.
The Grassroots Collaborative is a community-labor coalition with ties to the Service Employees International Union, United Here Local 1 and the Chicago Teachers Union.
More than 90 percent of its budget comes from community foundations. Key community groups include the Brighton Park Neighborhood Council, Action Now, and the Chicago Coalition for the Homeless.