Rahm Emanuel, TIFs, Exelon, CPS and greed…it’s kids and community that suffers

The Chicago Teacher’s Union strike is in its second full day, and there is little sign the two sides are any closer to an agreement. Rahm Emanuel made more public appearances in the last 48 hours than he has in his entire first year in office. Emanuel was always seen with children the past two days, talking about how CPS and his office just wants “what is best” for the children.

Both sides claim they want what’s best for the kids. Emanuel elevated the rhetoric by calling the strike a “choice” of the union, saying it is unnecessary. What is going unreported by Chicago media is that the mayor is correct – this is a strike of choice. The choice, however, was not one made by CTU, teachers, or parents. It was made at the highest levels of corporate power that now dominate the city of Chicago. Teachers, students, taxpayers, and parents are just pawns.

The CPS School Board is appointed by the mayor, not elected by taxpayers and parents. In 2011, newly elected mayor Rahm Emanuel appointed seven people – only one with a public education background (Dr. Mahalia Hines). The board President (David Vitale) is in high finance, former President of the Chicago Board of Trade. The Vice President (Jesse Ruiz) is a corporate attorney who is an Exelon Board Member (this is important). There is another corporate attorney (Andrea Zopp), also an Exelon Board Member (again, important). The balance of the board is an economist/political scientist (Henry Bienen), real estate developer/multi-millionaire Penny Pritzker, and journalist/communications consultant Rodrigo Sierra.

The corporate dominant politics of Chicago have made it TIF (Tax Increment Financing project) central. Under Illinois state law, TIFs may only be used to prevent or remediate urban blight; or foster industrial development.  In Chicago, TIFs have become an addiction for developers and politicians looking to line their pocketbooks and garner influence. In the past decade, TIF districts have nearly doubled, from 87 in 2000 to 162 in 2010.

In Illinois, a TIF district is authorized for a period of up to twenty‐three years, with the possibility of renewal for an additional twelve. At the time of designation of a TIF district, the current Equalized Assessed Value (EAV) of all property is measured by the Cook County Assessor’s Office and
established as a baseline, which is often referred to as the “frozen” EAV.

During a TIF district’s duration, no tax revenue created from increases in property values are allocated to overlapping taxing  bodies such as Cook County, Chicago Public Schools, or the Chicago Park District. These jurisdictions are able to continue to collect taxes on the base level of EAV within TIF districts during its 23‐ year lifespan. Briefly stated – TIFs take money out of the CPS revenue stream; including loss of inflationary property value.

An academic study presented by Dr. Bruno Quesada, University of Illinois, in December 2011 quantified the CPS revenue applied to TIF districts from 1995-2010.  The fifteen year total reported in the study was over $2.2 Billion. The 2010 figure topped $260 Million. Huge numbers in a revenue challenged economy and district – CPS is facing a $700 Million+ deficit in the current budget. The study concludes that the TIF allocation presents a tremendous burden; allocated in a non-transparent process, on CPS. The study has been completely ignored by CPS and the mayor’s office.

A recent report from the Cook County Treasurer in August 2012 disclosed that $867 Million in TIF funds remained available, but unallocated for the current year. A public schools advocacy group petitioned Emanuel to use these funds to help plug the budget hole. Emanuel refused – at the same time he was pushing for a 90 minute longer school day without compensation to teachers under contract.

CPS Board Member Penny Pritzker (also a Hyatt Hotels Board  member) has drawn fire for a $5.2 Million TIF project to build a Hyatt Hotel in Hyde Park. The same area of the city was subjected to $3.3 million in school budget cuts, and 27 full-time positions cut.While the project development company received the TIF money, Hyatt will profit from franchise fees and profit share in the new hotel development.

The corporate influence on CPS is direct, and is placing private charter school development over real public school reform and improvement. To succeed, they must break the union. Leading the charge behind Emanuel are privatizing charter advocates on the CPS Board.

In the year 2000, Rahm Emanuel was an investment banker who played a key role in the formation of Exelon, along with David Axelrod. Recall, from above, that two current CPS Board Members have direct ties to Exelon as corporate attorneys and board members – Jesse Ruiz and Andrea Zopp.

The newly retired Chairman and CEO of Exelon is John Rowe. Rowe was a chief founder of the Renaissance Schools Fund (RSF) for the establishment of private charter schools in Chicago, along with Arne Duncan and Richard M. Daley. The top donors to the fund are privatization champions, and have direct connections with current CPS School Board Members:

Exelon Corporation and Exelon Foundation , Bill and Melinda Gates Foundation, Rowe Family Charitable Trust, The Searle Funds, The Chicago Community Trust, The Walton Family Foundation, Inc., Pritzker Foundation, Bain & Company (yes, that Bain).

RSF boasts of its accomplishments on its website:

RSF has been the catalyst for the charter school movement in Chicago, raising over $50 million to open 70 new schools which will serve over 40,000 students at capacity.  We established the due diligence process and infrastructure for the selection, evaluation, and authorization of quality new schools.

In 2011, Rowe used funding from Renaissance Fund to launch “New Schools for Chicago” – and serves as its Chair. The New Schools fund has revised its mission, and it would appear that the CPS Board is complicit in its plan to dismantle and render obsolete public schools, public school teachers, and the union that represents them:

We will ramp up the growth of the best national and local charter schools, invest in next-generation school models, and drive innovation and accountability so only schools that deliver results serve children.  Our programs also engage parents and communities to demand and obtain the best education for their children. (emphasis mine)

The CPS push for teacher evaluation directly linked to test scores makes sense, in the above context. The corporate model, private charter school advocacy is being led by the CPS Board – the group charged with improving public schools in Chicago, for all students, not the select few served by select private charters with a narrow educational mission.

That is why the strike matters. It is about access, fairness, accountability for EVERY student – be it Chicago or Madison, or anywhere else there are grave inequities in the educational system. The crony educational system in Chicago is rotten from the mayor’s office, to the Board of Education, to the privateers.

At this moment, it is only the teachers walking the picket line and their supporters who stand in their way.

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