The Privatization Story

Connecting The Dots -Privatization is the

Symptom, Not the Cure

Connecting The Dots -Privatization is the

Symptom, Not the Cure

June 23, 2012Tom Tresser

June 23, 2012Tom Tresser

http://www.nogameschicago.com/

http://www.tom2010.us/

Store front space for activists & educators to collaborate, research, teach, build tools/apps that will help

accelerate CIVIC ENGAGEMENT &

COMMUNITY IMPROVEMENT efforts.

http://www.dailymail.co.uk/news/article-558211/London-2012-cost-20billion--TEN-times-original-budget-ex-Olympics-chief-predicts.html



“You’re next! You’re next!”

Bad dealsbleed city.

5% or 40%?

Richard Norment,

Executive Director, The

National Council for

Public-Private Partnerships

Watch this 2 ½ minute video @ http://tinyurl.com/InfrastructureTrustExplained

http://tinyurl.com/InfrastructureTrustExplained

June 18, 2012

“Until the case is made that this trust is

necessary and will operate on the behalf of

the public, the entire

enterprise should be scrapped.”

Richard Norment,

Executive Director, The

National Council for

Public-Private Partnerships

“You’re next!”

“You’re next!”

The Frame for PrivatizationThe Frame for Privatization

He who frames the argument wins the argument…


1.We are broke.

2.Government is stupid. Private sector is genius.


Therefore…

If you (Ms. Citizen) want anything new or improved from

government, we need to turn to the private

sector.

OOPS!

Maybe private

sector is NOT the

best steward of the public

good.

“The average private government contractor with a security clearance earns about $20,000 more each year than a government employee with the same clearance.”

So what’s the REAL reason...?So what’s the REAL reason...?

Paul Krugman, Winner Nobel Prize in Economics, 2008

From his column in the New York Times, June 21, 2012….

Paul Krugman, Winner Nobel Prize in Economics, 2008

From his column in the New York Times, June 21, 2012….

“But the main answer, surely, is to follow the money. Never mind what privatization does or doesn’t do to state budgets; think instead of what it does for both the campaign coffers and the personal finances of politicians and their friends. As more and more government functions get privatized, states become pay-to-play paradises, in which both political contributions and contracts for friends and relatives become a quid pro quo for getting government business. Are the corporations capturing the politicians, or the politicians capturing the corporations? Does it matter?…The point, then, is that you shouldn’t imagine that what The Times discovered about prison privatization in New Jersey is an isolated instance of bad behavior. It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.”

We are not broke!

Watch the first 6 minutes of this video @ http://tinyurl.com/NewYork-Is-Not-Broke

http://tinyurl.com/NewYork-Is-Not-Broke

New York State faces a budget deficit of$10 billion in 2011 ~ 1/13th of

a total $132 billion operating budget

Public employees are blamed (for a crisis we did not create)Threatened with 9,800 layoffs

WHAT’S HAPPENING?WHAT’S HAPPENING?

WHAT’S HAPPENING?

A major assault A major assault upon upon

public education, education, public health health

and and public safety safety

A major assault A major assault upon upon

public education, education, public health health

and and public safety safety

An offensive An offensive against public workers, public workers,

led by the nation’s led by the nation’s Governors Governors

and lawmakers, and lawmakers, state by statestate by state

An offensive An offensive against public workers, public workers,

led by the nation’s led by the nation’s Governors Governors

and lawmakers, and lawmakers, state by statestate by state

ANTI-UNION LEGISLATION INTRODUCED IN OVER 20 STATES

RIGHT-TO-WORK LAWS INTRODUCED IN 14 STATES

WISCONSIN AND OHIO HAVE PASSED SWEEPING ANTI-UNION LAWS

TEACHERS’ UNIONS TARGETED… States with bills to limit or eliminate collective bargaining for teachers, or otherwise target teachers' unions include Wisconsin, Ohio, Tennessee, Indiana, Nebraska, Texas, New Hampshire, Michigan, Idaho, Massachusetts, Oklahoma, Pennsylvania, Alabama, Florida, Minnesota, Missouri, Utah, Arizona, and others

Public employeePublic employeeunion membersunion members7.6 million.7.6 million.

Private sector Private sector union members union members 7.1 million.7.1 million.Source: Source:

““(Government) workers of the (Government) workers of the world unite! Public-sector world unite! Public-sector unions have had a good few unions have had a good few decades. Has their luck run decades. Has their luck run out?” out?”

The EconomistThe Economist, 1/6/11, 1/6/11

www.economist.com/node/17849199www.economist.com/node/17849199

A major assault A major assault upon organized labor,upon organized labor,an offensive against an offensive against

all of the unionsall of the unions

A major assault A major assault upon organized labor,upon organized labor,an offensive against an offensive against

all of the unionsall of the unions

We need to take We need to take our own pulse! our own pulse!

Remember the Remember the adage: “the best adage: “the best defense is a defense is a good offense.”good offense.”

We should ask: We should ask: Who are they defending?

We need to take We need to take our own pulse! our own pulse!

Remember the Remember the adage: “the best adage: “the best defense is a defense is a good offense.”good offense.”

We should ask: We should ask: Who are they defending?

BILLIONAIRES! BILLIONAIRES!

THE ASSAULT ON THE

UNIONS IS REALLY A

DEFENSE OF THE BANKERS

AND

BILLIONAIRES

THE ASSAULT ON THE

UNIONS IS REALLY A

DEFENSE OF THE BANKERS

AND

BILLIONAIRES

In the universe there are 1,210 billionaires

In the universe there are 1,210 billionaires

412 Billionaires in the USA! 412 Billionaires in the USA!

How many Billionaires in

New York?

68!

New York

IS NOT BROKE!

68 Billionaires

in New York

The wealthiest New Yorker is no longer Mayor Bloomberg…

(he’s now the 2nd wealthiest)…

The wealthiest New Yorker is no longer Mayor Bloomberg…

(he’s now the 2nd wealthiest)…

XX

Today the richest New

Yorker isDavid Koch,

worth about $22

Billion!

Today the richest New

Yorker isDavid Koch,

worth about $22

Billion!

During the heyday of America’s middle class (1950-1980) the top 1% had about

10% of total income.

They now take 25%!

During the heyday of America’s middle class (1950-1980) the top 1% had about

10% of total income.

They now take 25%!

Top 1% Income Share 1914 to 2006Top 1% Income Share 1914 to 2006

^ ^ Eisenhower Reagan

Growing income inequality

James Parrott, Ph.D., Fiscal Policy Institute, “Grow Together or Pull Farther Apart? Income Concentration Trends in New York,”

http://www.fiscalpolicy.org/FPI_GrowTogetherOrPullFurtherApart_20101213.pdf

We have the most unequal income concentration of any state in the

nation.

New York’s wealthiest 1% get more than

35% of all income in New

York State.

Income shares and household incomes in New York 1980 compared with 2007

(2007 dollars)

Shares of Total Income (AGI) % change1980 -Top 5% - 22%2007 - Top 5% - 49%

1980 - Bottom 95% - 78%2007 - Bottom 95% - 51%


(2007 dollars)

Shares of Total Income (AGI) % change1980 -Top 5% - 22%2007 - Top 5% - 49%

1980 - Bottom 95% - 78%2007 - Bottom 95% - 51%



Since 1990,the top 5% have

GAINED.

THE bottom 95% have LOST.

Since 1990,the top 5% have

GAINED.

THE bottom 95% have LOST.


(2007 dollars)

Average Income (AGI) % change1980 -Top 1% $446,507

2007 - Top 1% $2,730,973 +511.6%

1980 - Bottom 50% $16,0742007 - Bottom 50% $14,045 -12.6%


(2007 dollars)

Average Income (AGI) % change1980 -Top 1% $446,507

2007 - Top 1% $2,730,973 +511.6%

1980 - Bottom 50% $16,0742007 - Bottom 50% $14,045 -12.6%



Top 0.01% Income Share 1913 to 2008Top 0.01% Income Share 1913 to 2008

“Striking it Richer:The Evolution of Top Incomes in the United States”Emmanuel Saez, July 17, 2010http://www.econ.berkeley.edu/~saez/saez-UStopincomes-2008

The eve of the Depression

0.01% of householdsThat’s 1/10,000th! take more than 5%

of total income

This isUNSUSTAINABLE

0.01% of householdsThat’s 1/10,000th! take more than 5%

of total income

This isUNSUSTAINABLE

The Wealthiest 1% (80,000 households) together pull in

over $200 billion annually, more than 1/3rd of all income in NY.

The state budget deficit is 5% of $200 billion ($10 billion).

Source: James Parrott, Ph.D., “Grow Together or Pull Farther Apart? Income Concentration Trends in New York,” Dec. 13, 2010, Fiscal Policy Institute

The Wealthiest 1% (80,000 households) together pull in

over $200 billion annually, more than 1/3rd of all income in NY.

The state budget deficit is 5% of $200 billion ($10 billion).

Source: James Parrott, Ph.D., “Grow Together or Pull Farther Apart? Income Concentration Trends in New York,” Dec. 13, 2010, Fiscal Policy Institute

Reinstituting the 1972 NYSincome tax

structure would yield $8 billion more in income tax

revenue for New York,

while reducing income taxes for 95% of us!

http://www.fiscalpolicy.org/taxhistory2.htm

http://www.fiscalpolicy.org/taxhistory2.htm

Lost revenue: billions & billions & billionsNY’s tax-cutting binge from 1994-2000, has lead to the current fiscal crisis.NY’s tax-cutting binge from 1994-2000, has lead to the current fiscal crisis.

“Back on Track: Why Progressive Tax Reform is an Essential Part of New York’s Budget Solution,” March 2009, Fiscal Policy Institute

http://www.fiscalpolicy.org/CWFandFPI_BackOnTrackPersonalIncomeTaxReform_20090323.pdf

Tax wealthnot work.

TIFS =Giant Slush

Fund

Where are TIFs?Where are TIFs?

All over Chicago and Cook County

• 161 in city of Chicago

• Additional 264 in suburban Cook County

• 2010 = 425 TIF districts in Cook County

Where are TIFs?Where are TIFs?

How Many TIFs?How Many TIFs?

How Much Revenue Do TIFs Collect?


Cook County Clerk’s Office

How Much Revenue Have Chicago TIFs

Collected?

How Much Revenue Have Chicago TIFs

Collected?

Ouch!

2010 TOTAL TIF REVENUE FOR COOK COUNTY

City of Chicago

TIFs diverted $510 MILLION

Suburban Cook County

TIFs diverted $297 MILLION

TOTAL FOR 2010 = $807 MILLION



Who Is Harmed By TIFs? Who Is Harmed By TIFs?

In Chicago, The Board of Education is SUPPOSED to get almost 54% of your property taxes. But…

Who Is Harmed By TIFs? Who Is Harmed By TIFs?In Chicago, The Board of Education is SUPPOSED to get almost 54% of your property taxes. But…

This property owner is in the Touhy/Western TIF District and 24% of HIS property taxes were captured by the district. The Board of Education only got 39% of his property taxes. That’s a loss of 15% in revenues from this single taxpayer.

Who Is Harmed By TIFs? Who Is Harmed By TIFs?

TIF for North Side auto dealer is a boondoggle. (Opinion)(city officials plans to give Grossinger Auto Group $8.5 million in tax-increment financing )

Crain's Chicago Business – Jan 14, 2008

TIF addiction in Chicago reached a new low last week.

City officials endorsed a plan to give Grossinger Auto Group $8.5 million in tax-increment financing to build a dealership at the bustling intersection of North and Clybourn avenues on the North Side. The site isn't in a TIF district, but the officials were kind enough to create one just for the building Grossinger plans to convert into a four-level auto mall.

2009 revenues of

$2.6 BILLION!

2009 revenues of

$2.6 BILLION!

IN 2009 THE CITY GAVE CHICAGO MERCHANTILE EXCHANGE

$15 MILLION TIF $ FOR REHABBING CORPORATE HQ.

APPROVED BY ALDERMAN BOB FIORETTI.

New Mayor is “Shocked”!New Mayor is “Shocked”!

The Chicago Sun-Times (5/25/11) reported that "Without criticizing Daley directly, Emanuel said he was ‘shocked’ to learn that TIF districts have been multiplying for more than two decades without any job creation standards."

THE CITY HAD $1.4 BILLION IN UNSPENT TIF FUNDS AT THE END OF 2008 AND NEARLY AS MUCH AT THE END OF 2009 AND 2010!

CAN YOU SAY “UNACCOUNTABLE

SLUSH FUND”?

These TIF transfers of property taxes to wealthy and successful companies divert public funds from vital units of government. They are yet more examples of the 99% being ripped off to enrich the 1%.

The Problem Is State-WideThe Problem Is State-Wide

In Illinois, 360 municipalities have 943 TIF Districts

In 2010, across the state, 414 TIF districts were in “non-compliance” for not filing any or proper financial statements, according to The Office of the State Comptroller. That’s 44% of all Illinois TIFs!

?

Stopgiving away

our stuff!

The Fedsare wasting our money

Illinois net loss of $253 billion from

1991 – 2001

ILLINOIS NET FEDERAL TAX

LOSS

$ 4 BILLION/YEAR.

Stopwars now.

Demilitarize USA.

To Sum UpTo Sum Up

• We are NOT broke

• Tax wealth, not work

• Don’t give away our stuff

• Stop the wars

• Start planning for 2015!

• Take back our stuff. Protect & extend the public. Cut class size in half. We take care of our own!

• We are NOT broke

• Tax wealth, not work

• Don’t give away our stuff

• Stop the wars

• Start planning for 2015!

• Take back our stuff. Protect & extend the public. Cut class size in half. We take care of our own!

[email protected]

@tomstee@civiclabchicago

312-804-3230

www.civiclab.us

http://www.civiclab.us/

The Privatization Story

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