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Casinos, ‘weed’ floated as solutions to fill Chicago budget shortfall

By La Risa R. Lynch, Contributing Writer | Last updated: Sep 6, 2019 - 9:41:14 AM

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Chicago Mayor Lori Lightfoot

CHICAGO—Newly minted Mayor Lori Lightfoot marked her first 100 days in office by revealing a dismal outlook on the city’s finances for next year—a $838 million budget shortfall.

“If $838 million sounds big, it’s because it is,” said Ms. Lightfoot, the city’s first Black female mayor. “It’s the largest in our recent history.”

She blames the city’s financial crisis on the past administrations’ kick-the-can-down-the-road approach to funding the city’s pension obligation. Increased labor costs and anticipated lawsuits—many no doubt related to police mis-conduct—also played a role in the city’s budget woes. She admitted her predecessor left her with no “credible way to fix this massive problem.” But she said she would not do it on the backs of the poor or in a way that drives businesses from Chicago.

The city’s playbook for putting its fiscal house in order has often come on the backs of low-income Black and Brown communities, who bear the brunt of the city’s austerity measures. High taxes along with increases in fines and fees and cuts to needed city services—like the 2012 closures of six mental health clinics—are usual suspects to plug the city’s deficit. And these cuts reach deep into the wallets of low-income residents who can least afford it, often with devastating effects.

Mayor Lightfoot has vowed fundamental change in the way the city addresses its financial crisis. Though Ms. Lightfoot plans lacked specifics when she laid them out in her first state of the city address in August, she is rolling the dice on a Chicago-based casino and recreational marijuana as possible revenue fixes. But for the casino to work, she added, both city and state officials must work together to hammer out a tax structure that doesn’t eat away at the casino’s profit margins.

Still community activist Willie JR Fleming, founder of the Chicago Anti Eviction Campaign, sees opportunities in the revenues generated by both the casino and the legalization of recreational marijuana. Both can benefit the Black community which has systematically been left out of the gaming industry and penalized by the criminal justice system for marijuana possession, if done right, he argued. His nonprofit organization fights to enforce the human right to housing.

Mr. Fleming wants to take a page out of the city’s handbook for its neighborhood opportunity fund and create something similar from tax revenue from legalization of marijuana.

Created under the Rahm Emanuel administration, the neighborhood opportunity fund is an initiative to fund businesses to revitalize disinvested commercial corridors. Funding comes from payments developers make to have greater building density in the city’s central business district. The cannabis opportunity fund as Mr. Fleming calls it would help organizations build low-income housing, fund construction apprentice programs or violence prevention programs.

“Revenue of the taxes off cannabis would be a lot,” said Mr. Fleming, who was part of the mayor’s cannabis policy team. “We could be very creative with this revenue.”

To ensure equity, Mr. Fleming said those impacted by the criminalization of marijuana should have first right of refusal for dispensaries in prime locations like downtown, near college campus or at prominent events like Lollapalooza.

“You are not going to address inequality and equity by continuing to give the big corporations all the breaks and all the opportunities,” Mr. Fleming said.

Mayor Lightfoot too wants to create a robust cannabis industry for those victimized by the War on Drugs. But Mr. Flemming noted convincing may be needed within city council.

“This is the one you don’t want to fight on, this is the one where you want to bring the collective and enhance and expand the ideas already presented,” Mr. Fleming said.

Other revenue fixes included a road congestion tax and a graduated real estate transfer tax, which Mayor Lightfoot said, could be used for a myriad of issues ailing the city, including homelessness and housing instability. But she didn’t take a property tax increase off the table.

“As your mayor, I cannot in good faith promise you that I will take any option off the table to tackle this crisis, whether it’s through budget reductions or by raising revenue,” Mayor Lightfoot said.

It’s about equity in where the tax revenues go for Marcos Ceniceros, campaigns organizer with Grassroots Collaborative, a nonprofit that advocates for policy changes. He noted under the Emanuel administration, budgets have been one of cuts to important resources and schools. He noted former Mayor Emanuel looked to the working class to buttress his budget instead of going after Wall Street, banks or corporate developers.

“We want to see a reverse from that in this budget,” Mr. Ceniceros said.

Mayor Lightfoot, he noted, can hedge her bets by using a corporate head tax, commercial lease tax and the real estate transfer tax to plug the city financial problems.

“These are real solutions with real numbers that can actually remove the burden from working people and actually provide the revenue to address pensions, the budget deficit and to be able to fund the necessity services,” Mr. Ceniceros said.

Whatever Mayor Lightfoot proposes, University of Illinois at Chicago political science professor Dick Simpson noted Ms. Lightfoot is in a good position to pass her agenda as well as her budget.

The musical chairs she played in the days following her election may have given her the leverage she needs. Ms. Lightfoot dumped long entrenched aldermen from key committeeman chairmanships, including 14th Ward Ald. Ed Burke, who is under a cloud of FBI indictments and investigation, as head of the powerful finance committee. That job went to Ald. Scott Waguespack. Ald. Pat Dowell replaced Ald. Carrie Austin as budget chairman.

“That has given her a working majority on the key committees [with] more progressive committee chairman than in the past city councils under Rahm Emanuel,” said Mr. Simpson, who also served as an alderman. “She can’t move a policy agenda forward if she didn’t have a majority in the city council and committee chairman.”

Her power play has resulted in an almost 100 percent compliance in secure votes for her agenda. She has won all the votes in city council in her first 100 days and by an overwhelming majority, Mr. Simpson noted.