How do you spell wealth redistribution? Tax-increment financing
When I worked in Seattle covering corporate welfare and city government, I became strange bedfellows with a diverse alliance of libertarians on the right and Ralph Naderites on the left who oppose “public-private partnership” deals between developers and statist Democrat AND Republican politicians.
These “public-private partnership” scams inevitably involve tax-increment financing gimmickry to siphon off tax dollars to subsidize developers/builders/contractors who then reward politicians with big campaign donations. (See here for how it works.)
The Chicago Olympics bid involves TIFs at a massive level.
And voters oppose it at their own risk — including threat of violence against them by their own representatives!
Remember the video from March 2009 of an unhinged Chicago alderman attacking a citizen who dared to challenge the wealth redistribution TIF scheme?
Ben Joravsky at the Chicago Reader has been on the case from day one. From his blog in January 2009:
Earlier today Mayor Daley told reporters that, yes, the Reader had it right all along: he was planning to pay for the Olympics with money out of his favorite slush fund–the TIFs.
“You should have listened to what Ben told you two years ago,” Daley said. “Of course, we’re paying for it with TIF money. C’mon, people, don’t be stupid! Do you think it’s going to pay for itself?”
Just kidding! He didn’t actually say any of that. But Lori Healey, formerly the mayor’s chief of staff and now the president of the Chicago 2016 bid committee, told aldermen today that the city would be paying for the proposed Olympic Village with TIF dollars. “If the city is selected to host the 2016 Summer Games, it will carve out a new TIF district from the existing Bronzeville TIF to help fund new roads, sewers, and other infrastructure needed for the Olympic Village,” she said, according to an article in Crain’s.
Just to keep track of the bouncing ball: First the mayor insisted there would be no public money for the Olympics. Then he flip-flopped–at the insistence of the United States Olympic Committee–and had the City Council put up $500 million (“skin in the game”). Then he went back to the no-money line, at least in comments to folks at last fall’s budget hearings. Now it looks like we’re kicking in TIF dollars after all. If we stick around long enough, I’m sure he’ll say we’ll pay for the games with parking meter revenue. Oh, wait–he sold them off last month.
As for the Michael Reese site deal, the spin–and these guys are always spinning when it come to TIFs–is that it’s money we’d be spending anyway even without the Olympics.
Sure it is. As though the city, which can barely find the money to pay to clear snow from its streets, has no more pressing need than to buy Michael Reese Hospital, tear it down, clean the site of toxins, and build a bunch of condos.
Remember, TIF dollars are property taxes that could be spent on schools, parks, police, fire, or antipoverty programs. Or it’s a tax that they might never have made you paid for in the first place.
And from the Chicago Sun-Times in August 2009:
Chicago taxpayers must spend $100 million to transform the old Michael Reese Hospital site on the Near South Side into an Olympic Village.
On Wednesday, Mayor Daley’s Olympic bid team confirmed the $100 million pricetag to install roads, sewers and utilities, raising questions about how the Chicago 2016 organizing committee and Daley can continually say the games won’t cost taxpayers a dime — especially at a time when the city is dealing with a mounting fiscal crisis.
While Chicago won’t know until October if it beat out its competition to win the 2016 Summer Games, the city has agreed to create a tax-increment-financing (TIF) district surrounding Michael Reese to generate the $100 million subsidy.
TIFs re-direct taxes away from schools, parks and other local government agencies bankrolled by property taxes. Property taxes within a TIF district are frozen at existing levels for 23 years.
The decision to draw a $100 million subsidy from the tax-increment-financing (TIF) — or create a TIF within a TIF to generate even more money — comes at the worst possible time for Chicago taxpayers.
Most of the city’s unionized employees have been forced to swallow furlough days and other concessions to eliminate a threatened $300 million year-end shortfall. More than 430 members of two unions that refused to make concessions have been laid off.
Next year threatens to be even worse. Daley’s preliminary 2010 budget has a $520 million gap that can only be closed with service cuts, tax increases or a combination of the two. Some aldermen want to use unallocated TIF money to eliminate that shortfall.
Ald. Joe Moore (49th) said the $100 million subsidy “doesn’t come as a shock,” given the expense of building new streets, water and sewer lines to the Michael Reese campus.
But, he said, “It begs the whole question about whether this is a good time for the Olympics, given our financial straits.”
Put that on the White House reality check blog.
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Speaking of wealth redistribution, look what happened quietly on Sept. 9, 2009 to the Grove Parc complex (sitting in the shadows of the proposed Olympics site) that Valerie Jarrett’s Habitat Company ran into the ground:
Grove Parc Apartments
The next ordinance authorizes the purchase of the HUD mortgage on the 504-unit complex called Grove Parc Apartments to help facilitate the redevelopment of the property in the Woodlawn community.
The $12 million mortgage will be purchased by the City for $1,000 and the reduction of the debt will make financing the redevelopment more feasible. Grove Parc is a project-based Section 8 development at 61st St. and Cottage Grove Ave. in the 20th Ward.
The developer, Preservation of Affordable Housing, Inc., will preserve the Section 8 units and build at new mixed-use development at the location, including 65,000 square feet of retail space.
Plans call for the phased demolition of the complex and the construction of a new development called Woodlawn Park with 420-units of new mixed-income housing and the existing Section 8 units on the rebuilt site.
The rehabilitation and new construction of these units is an important part of the City’s strategy not only to create affordable housing but to preserve housing for long-term affordability.
To begin the Grove Parc project, Preservation of Affordable Housing, Inc. will receive $1 million from the left-wing MacArthur Foundation’s “Windows of Opportunity.” Valerie Jarrett sits on the MacArthur-funded “Preservation Compact Leadership Committee.”
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Categories: Corruption, Olympics, Valerie Jarrett
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TIF = Taxpayer Is F’d.
I am just waiting for one of these big-spending, big-government types to say, “Well, let them eat cake!”
I wonder if it is possible to restrain government at all levels and both major parties without the people resorting to extraordinary means?
Government is a RICO. It is that simple and we need to rein it in at all levels. And we need a new, truly conservative party to do this.
We once had an apartment in a complex that was filled with section 8’s (unknown to us when we signed the rental agreement.) What a nightmare. Your neighbors are all subsidized and they live better than you as you struggle to meet your responsibilities. They don’t care. The weekly vandalism was out of control. We broke that lease and got the heck out there none too soon!
well, they don’t mean wealth redistribution to all the people, just a few friends and cronies are going to get wealth redistributed to their bank accounts. Same old corruption, different name.
More corruption, greed, and pay-offs the Chicago way!
Yes they do, but then they ACCEPT it at their own risk. The people of Chicago have tied themselves into a Devil’s Knot. But this has been going on for generations-how stupid can these people be?
Several Arizona cities have these “public-private partnerships” -Phoenix built the Suns and Diamondbacks beautiful new homes, Glendale built the Arizona Cardinals the University of Phoenix Stadium. We await those cities economic boom and tax rebates to their citizens.
Isn’t it just really easy to be generous with the other guy’s money?
Uh, no, what we need is truly conservative voters. We do not have them. Not a majority, anyway.
Unfortunately, widespread catastrophe tends to quickly make voters more socialist (government save me!), not more conservative.
Meanwhile, the third party fanatics insist the catastrophe being made imminent by Democrat rule is a good thing.
Sigh.
There are only two thin threads for hope left. One is the internet and bloggers like MM. The other is a housewife/writer/former Governor in Juneau, Alaska.
If Palin gets the Republican nomination and has a real chance to win, I’ll bet most of the third party screwballs here won’t vote for her. She will have made compromises. Eeeewww. Gotta vote for some jackass with no chance.
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HI ROLAND–good analysis of where we are politically–in Texas we call it “in deep doodoo!”
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Governor Sarah Palin is the only real conservative I see that has a chance to win in 2012. Her job as Governor of Alaska and her personal integrity stand out from the rest of the pack.
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SARAH’CUDA for POTUS, JOHN BOLTON for VP. No more RINOS, no more “democRATS” / liberals / socialists / statists / marxists / communists and their enablers need apply. Close all Republican primaries to crossover voters so we can pick our own candidate this time.
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John Bibb
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Now we are seeing what the Stimulus really is: the largest slush fund in history.
The government is destroying society and making businesses into whores.
Yep, this happens with professional sports stadiums, too. It happens with private companies who threaten to leave one jurisdiction for another.
The larger question is, how do municipalities avoid allowing themselves to be blackmailed into making such deals.
Exactly. It has been this way for 80 years at least. There is absolutely no moral or ethical compass – they have no accountability and, consequently, no fear of the law. They used to operate in the dark but now they proudly perform their crimes in broad daylight, thumbing their noses at us all.
To make a broad point, with all the “wealth distribution” talk, why don’t Republicans put their money where their mouths are and just propose a FLAT tax for every citizen. Say, $1,000 a person. Anything else (even flat rate where everyone’s charged the same percentage) is still wealth redistribution. Even socialism!
The only thing that could be called Section 8 here is the government!
Obama and his cronies are the only ones that will make piles of money on this. Not only are the Illinois taxpayers going to take it in the shorts, but the taxpayers all over the country. I hear they are talking stimulus money to defer the cost. Don’t you just love these corrupt SOB’s?
Wrong again!
Wealth redistribution is when some socialist tries to play Robin Hood. When the gov’t collects taxes, that’s not redistribution. The gov’t may have a true need for it; police, fire, water, sewer, road work, etc.
But when the socialists take the tax money and give it to people, for whatever reason, that is redistribution.
Does the term “general welfare” mean anything to you? That means everyone has to benefit from it. Like police, fire, road work, etc. My sister tried to tell me that welfare payments were “general welfare” because if you take money from one segment of society and give it to another, that means everyone has the same standard of living.
NO!
You cannot make poor people richer by making rich people poorer.
The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.
- Winston Churchill
I fully support the notion of ALL citizens paying tax, regardless of their income level. I’d go so far as to link an invididual’s voting privileges with a requirement to pay income tax, much like how only property owners were allowed to vote back in the initial stages of the nation.
In this week’s National Review, Mark Steyn points out that within a few years, 51% of American citizens will be paying no income tax, leaving the full tax burden on the other 49%. This cannot be sustained.
Tell your sister to give me (me not you) a $1000 dollars, no questions, and not to cry about it when I don’t pay her back. Maybe she’ll catch on eventually. I’m not trying to be mean, I have a sister just like her. You love them anyway.
Ahh, yes. A city with a 10 1/2% sales tax needs more money from taxpayers, so the city can “spread the wealth around”.
“Minority” contractors (and front firms) applaud loudly.
This is the same city that’s already sold its downtown parking meters, parking garages, toll roads, and pretty much everything else that isn’t nailed down. PAY UP, PEOPLE! It’s the Chicago Way!
Rogue Cheddar said: “We once had an apartment in a complex that was filled with section 8’s (unknown to us when we signed the rental agreement.)”
A nightmere indeed. I am comforted in knowing I am not alone in this experiance. I moved from Alaska to Kingman AZ in ‘04, and being the now a go-go kind of guy I am I made arrangements over the internet for a appartment. The on-line photos looked great (of course, likely taken one day after construction). I moved in and discovered that literally every other person in the large complex was on welfare. Cops responding daily, noise, trash, etc. I moved within a year after finding a fixer upper to buy, securing financing, and having received a rent increase notice from the apt complex management. A mortgage was actually cheaper. I am not that old but I recall when growing up near Paterson NJ in the 50’s & 60’s that there was still an element of shame attached to living like pigs and acting like animals. Thank you “War on Poverty” for taking us where we find ourselves today. Let me add, this is a class thing to me, certainly not race. In this area virtually everyone on the public dime is lily white.
Why not just admit we really don’t even need an income tax? The only thing it covers is interest on the national debt.
In a Keynesian system, it’s quite possible to expand the money supply and pay for government spending simply by printing the money as they need it.
So why do they need to take mine, exactly?
General welfare is still wealth redistribution, because the rich shoulder more load to benefit everyone else, even they are also benefited.
What a fine example of adult behavior! Way to go Chicago!
Whaa? Try making sense. What a juvenile position to take.
Yes, it was mixed race in our situation also. There was one woman (white breed sow)who had five young children, all from different fathers, totally subsidized! The sense of entitlement and total lack of shame was too much to see on a daily basis. It is all about the class or lack thereof.
Interesting that something you don’t agree with is “juvenile.”
If there’s a fund that everyone can take from equally, say everyone gets $1000, but some pay $1,000,000 into the fund, while others pay $0, is that not wealth redistribution?
Chicago politics at its finest.
Aren’t we GLAD it’s going national???
sarc/
Good point, RSS. You are making a principled argument for a consumption tax. All but the smallest of income taxes will be theft just by the nature of the income tax.
A consumption tax with a pre-bate to keep people out of poverty makes all taxation based on ‘luxury’ spending and completely voluntary. Use more of the products of the society = pay more tax for the support of that society’s defense and law enforcement.
Sounds good to me. You are for the Fair Tax, right?
Seems like li’l Ms. Jarrett has her hands in a LOT of pockets, doesn’t it? She’s in the WH, she’s all over the City of Chicago, she’s everywhere. She’s the one who “vetted” Van Jones, so she must like his race-baiting views. Funny thing is, she, herself, has been a slum-lord. [Grove Parc] Shouldn’t forcing black Section 8 residents to live in extremely sub-standard conditions be considered a racist act? What a bunch of con-artists and hypocrites the current “gang” in the WH are, and they don’t trouble to hide it.
That explains the ‘Rogue’ in Rogue Cheddar!
If Chicago can outlaw handguns, why don’t they allow street drugs and then tax them? Problem solved. In one day the crack heads can put Daley City in the red, and he can buy his meters back.
Would this be considered rape or rape-rape?
Ugh. That obviously is not what I meant. “so people people are not being taxed to pay for basic necessities” would have been better.
Sigh. One more try. “so people are not being taxed when they are buying necessities.”
I’m just making the argument that if you’re against “wealth redistribution,” then you should be against ALL taxes where the rich pay more than the poor for the same services. Under the Fair Tax, you still have Señor Fat Cat paying exponentially more than I do for using the same roads, parks, police force, etc., so it’s still wealth redistribution. Is it not?
I guess VOTING the jerks out of office is beyond the question. Even with the Dead, Moved and Never Were people Daley and company could not win without a large percentage of that chum bucket city voting for them. It is an interesting slogan in Chicago “More Taxes-Less Liberty”.
And that is true everywhere else. But that “extraordinary” sounds interesting-tell us more
No. It is not. As I pointed out, it is voluntary. You can make all you want for your financial security or the future well being of your children and still not get taxed a dime. Responsible choices will lead to a low tax and spendthrift choices will be more expensive. Whether you are rich or poor.
How much money you make will have nothing to do with how much tax you pay. How much you choose to spend will be all that matters.
And that argument leftists are always pushing about rich people benefitting more from the society is reflected in the Fair Tax the way it should be (actual greater consumption of society’s product), not with the boatload of assumptions about ‘rich people’ the leftists use.
Getting back to the video, if ya’ll don’t mind …
why the HELL wasn’t that turd Munoz arrested for assault?
Chicago? Cook County? Illinois? The man MIGHT walk into a police station and make a complaint. He MIGHT get shot pulling that gun they found on him. If they use the same one each time I do not know. His family could appeal to Attorney General Eric Holder of New Black Panther Party shame, yes they could.
Chum Bucket City as it were.
I keep saying this but: it’s the brazenness of the corruption that is so infuriating. Corruption is now an entitlement in the minds of politicians.
A similarly diverse alliance of “strange bedfellows” has been working together for well over a year on a completely different topic.
There are Democrats, Independents, Libertarians, Republicans, etc. who all understand, in a completely non-partisan way, that John McCain, Barack Obama, and Róger Calero are all ineligible to hold the office of President, and should never have been on the ballot.
McCain was born a citizen of Panama.
Obama was born a British subject.
Calero was born a citizen of Nicaragua, and to this day is not a U.S. citizen (he is a resident alien).
Yet each was on the ballot in 2008 as a candidate for President of the United States:
- McCain for the Republican Party,
- Obama for the Democratic Party, and
- Calero for the Socialist Workers Party.
And now that diverse alliance of “strange bedfellows” wants to know why Hawaiian officials are breaking the law in order to conceal documents that they must, by Hawaiian law, make public.
Looks pretty apparent that Ald. Munoz don’t need no stinking f…ing VOTERS to hold office
Well we were allowed out of that lease once we explained their dereliction and misrepresentation of the environment. And the fact that we already had suffered vandalism to our cars barely a month into our lease. We threatened to release the hounds (lawyers, shudder).
They were too happy to let us complainers go.