STUMP » Articles » Chicago Run-off: Preckwinkle and Lightfoot » 27 February 2019, 12:21

Where Stu & MP spout off about everything.

Chicago Run-off: Preckwinkle and Lightfoot  

by

27 February 2019, 12:21

We’ve got the Chicago mayoral election results: Chicago To Get Its First Black Female Mayor As Candidates Head To Runoff

Former federal prosecutor Lori Lightfoot and Cook County Board President Toni Preckwinkle took the top spots in Tuesday night’s tight race. They beat out 12 other candidates, many of whom entered the race after current Mayor Rahm Emanuel surprised the city by announcing in September he wouldn’t run for a third term. Now Lightfoot, who earned 17.5 percent with 90,000 votes, and Preckwinkle, at 16 percent with 82,000 votes, will go head-to-head in a runoff election April 2.

They edged out William Daley, whose father and brother each served as mayor for over 20 years. Daley, who spent millions more than the other candidates, enjoyed wide name recognition but wasn’t able to rise to the top of the field. He took third place with about 76,000 votes, or just shy of 15 percent of the total.

When there were that many candidates, it’s not all that shocking that Daley was in third place behind Preckwinkle and Lightfoot. I don’t know much about Lightfoot… but I have had Preckwinkle on this blog several times.

But before that, let’s revisit what these two candidates said about Chicago pensions.

LIGHTFOOT AND PRECKWINKLE ON PENSIONS

I’m just going to copy over.

PENSION OBLIGATION BONDS: SHOULD CHICAGO DO IT?

Lori Lightfoot

Mayor Emanuel has proposed a $10 billion pension obligation bond to solve the pension crisis. I do not support this plan for several reasons. First, the proposed plan will increase the city’s outstanding debt by approximately 50% and will constrain the city’s ability to borrow in the future. Second, despite Mayor Emanuel’s assertions, there is no guarantee the pension funds’ actual rates of return will exceed the city’s borrowing costs. In an effort to sell this plan, Mayor Emanuel and his staff have focused on the spread between the bond’s anticipated interest rate, which they claim would be roughly 6%, and the four funds’ actuarial rates of return, which average 7.25%. An actuarial rate of return is not the same thing as an actual rate of return. Between 2008 and 2017, the city’s four pension funds had an average annual rate of return of 6.4%, or 85 basis points below their average actuarial rate of return. While the 6.4% return exceeds the city’s claimed interest rate for the bond, the Civic Federation notes that the last taxable general obligation bond the city issued in 2017 had an interest rate of 7.045%. Third, Mayor Emanuel and his administration have not been transparent about the proposal’s details, and they have not shown a willingness to hold public hearings about the proposed plan. No one should support this plan until it has been fully and honestly been presented to the public.

I like what Lightfoot has to say there.

Toni Preckwinkle

At this time, I am not in favor of issuing bonds to pay pension costs. We need to first pursue more sustainable and less risky revenue sources that do not mortgage the city’s future earnings against a volatile equity market. In the event of an economic downturn, a pension obligation bond could put the city’s fiscal position in severe jeopardy. Therefore other options should be pursued prior to the POB.

That’s okay, I guess. But it’s too easy to change one’s mind…especially if the state is doing something similar.

CITY PENSIONS: SHOULD WORKERS AND RETIREES SHARE IN THE PAIN?

The exact question from Crain’s:

Should city employees and annuitants be required to contribute more toward and/or accept lesser benefits as part of stabilizing pension finances?

Lori Lightfoot

I know and believe that pensions are a promise, and I will make sure that current city employees and retirees receive the pensions they have been promised. I am opposed to amending the Illinois Constitution to reduce or diminish pension benefits for current city employees or retirees. Retired public service workers make up the backbone of the middle class in so many of our communities. To derail their retirement security would be devastating to local economies across our city. We have to resolve the pension problem for retirees and current employees.

We will have no choice, if we want to act in a fiscally responsible way, but to explore alternatives to a city-funded pension for people hired on or after January 1, 2020. Just as pensions are a promise, we cannot make promises that we have no ability to keep.

Toni Preckwinkle

The Illinois Supreme Court has ruled that it is unconstitutional to retroactively require city employees and future retirees to contribute more or accept lesser benefits than were collective bargained. To solve our pension debt problem we must enact constitutionally permissible reforms that save money on the repayment of the debt and allow us to keep our promises to workers. To do that we must find revenue in order to front-load that repayment. I will seek legislation that will permit Chicago pension funds to offer discounted benefit buyouts to Tier 1 employees, as was enacted by the state last year. I would also seek to ensure that a portion of revenue raised by the adoption of progressive rates be diverted through the Local Government Distributive Fund, to all municipalities to be utilized for pension debt stabilization. Additionally, I will work with Springfield to pass legalization of recreational marijuana and gaming expansion to increase revenues available for pension debt stabilization.

It’s too easy to say “what are you smoking?” in response to Preckwinkle (hint: gambling and pot will not even come close to filling the pension hole).

Of the two, on the pension issue, Lightfoot is the better of the two, but neither will be looking to deal with the real problem: already accrued pension benefits.

But worry not, it’s not like the governor of Illinois is willing to deal with it, either.

PRECKWINKLE POSTS

FWIW, I did a search through all my posts to find mention of Lightfoot. I only found mentions in articles I linked, but really no comment from me. One was a Preckwinkle ad pointing out the “Burke 4”, which included Preckwinkle.

Preckwinkle, on the other hand… 39 posts (including the one above)

She was gung ho for the idiotic soda tax, and I kept beating her up for it.

There is no way I’m linking every post with her in it, but this handy google search will get you to all of them.

I’m pulling out a handful, so you can see that my endorsement is for Lightfoot is mainly because Preckwinkle is so awful.

September 2017: Soda Tax Follies: The Backstory of Preckwinkle and More linked to this blog post by Cook County resident John Ruberry:

Leftist? Who is a leftist?

Cook County Board President Toni “Taxwinkle” Preckwinkle, a Chicago Democrat, that’s who.

Proof? Do you want proof?

On my way to work on Friday I heard a clip from Dan Proft on WIND-AM Chicago of former Utah Republican politician Dan Liljenquist describing a “sobering experience” about the time he met with Preckwinkle when she was a Chicago alderman. Liljenquist was a law student at the University of Chicago and working for the Institute for Justice’s Clinic on Entrepreneurship. They were offering free legal advice to inner city Chicagoans who wished to start their own business. Liljenquist pitched his idea to Preckwinkle, who replied to him, “I’m opposed to self-employment. You give these people false hopes that they could ever earn a living on their own.”

Yes, Preckwinkle is a leftist. With leftists, government is their god. When there is a problem only government can solve it. Government, of course, is never the problem. So Preckwinkle has set herself up as Mother Preckwinkle, spending other people’s money on Cook County’s massive health care network.
…..
Crook County has been living beyond its means for decades. Some of the soda tax money will go to woefully underfunded but generous pension plans. Mother Preckwinkle and her predecessors have been rewarding their public-sector union allies for most of my life.

But it’s not Preckwinkle’s money. It belongs to taxpayers such as myself.

Taxwinkle hasn’t campaigned as a leftist. Amazingly, she originally ran as a tax-cutter. Preckwinkle eliminated an unpopular county sales tax. Then she brought it back. But Preckwinkle is governing as a leftist. Because of course she is one. It’s time for Cook County residents to wake up and think about what they vote for. And that includes the mostly lap-dog members of the Cook County Board.

That was from September 2017.

In October 2017, I noted Preckwinkle threatened to cut government spending.

PLEASE, PRECKWINKLE, DON’T CUT SPENDING! NOT THAT!

This has got to be the most amusing threat from a politician ever.

Preckwinkle threatens 11 percent budget cut

Before I get to the text – who exactly is going to be threatened by this other than those who work for the county? I’m sure all the government folks are on board with the soda tax (except to the extent it threatens their keeping office).

The people who hate the tax will be saying: well, why didn’t you just cut 11% to begin with? We want you to spend less!

Seriously?

And more from the same post:

PRECKWINKLE: FINE, YES, IT’S ABOUT THE MONEY AND NOT HEALTH

I mean, it’s obvious from the piece above.

But let’s see what the Sun-Times has to say:

Preckwinkle: Soda tax was all about money, and the county needs it

….
Yeah, whatever, Preckwinkle. Throw your hissy fit.

The soda tax is just spitting into the wind that is Cook County pension issues.

Yes, I know that 60% funded ratio may look pretty sweet compared to .. well, all the other Illinois pensions other than IMRF.

But it’s not in a great place.

If that’s what she did with Cook County… what do you think she would do with Chicago?

The whole soda tax saga was that Cook County really needed more tax revenue to cover its current (and unfunded old) costs. They tried selling it as “for the children”, but by October 2017, Preckwinkle was being forced to admit it was all about the money.

After going into effect, soda sales went down, and the County commissioners repealed the tax. It lasted a scant few months.

Can you imagine Preckwinkle bringing such political idiocy to Chicago, a city that really doesn’t need more stupid political ideas?

Before the soda tax failure, Preckwinkle got Cook County sales taxes raised in 2015:

Cook County Board President Toni Preckwinkle persuaded just enough commissioners to approve a 1-percentage-point sales tax increase Wednesday — the culmination of a major political about-face, but a move she said was needed to bail out the county worker pension system.

Following weeks of one-on-one lobbying sessions by Preckwinkle, nine of the 17 commissioners voted to raise the county share of the sales tax to 1.75 percent. Add up the state, city and public transit portions, and the total sales tax rate in Chicago once again will hit 10.25 percent — one of the highest rates in the nation.

That was some years ago – this information from TurboTax is a little more recent:

Some of the highest combined state and local sales taxes:

Chicago, Illinois and Long Beach, California: 10.25 percent
Birmingham and Montgomery, Alabama and Baton Rouge and New Orleans, Louisiana: 10 percent
Seattle and Tacoma, Washington: 9.6 percent

So congrats to Long Beach! You’re up there with Chicago!

I will end this post with something from the middle of the soda tax saga:

Anyway, Preckwinkle, if the tax is not supposed to be so confusing, why are the retailers getting screwed up all over the place over it?

And Preckwinkle says: Shut up and pay up:

‘Cook County Board President Toni Preckwinkle is sending a strong message to anyone who wants to mess with her pop tax: Don’t.

‘In an action a judge said could have “a chilling effect” on government and citizens’ rights, county attorneys are seeking $17 million in damages from the Illinois Retail Merchants Association, the group that, with a couple of co-plaintiffs, won a temporary restraining order delaying the levy by about a month.

‘Preckwinkle spokesman Frank Shuftan says seeking damages is appropriate: “Actions have consequences.”

‘He added in an email: “The financial damage to the county as a result of this delay is projected at more than $20 million. . . .The county has every right to be made whole as a result of the judge’s ruling upholding the ordinance and removing the TRO.”’

Oh, actions have consequences all right.

I hope Preckwinkle gets those consequences, good and hard.

Please, Chicago voters, give those consequences to Preckwinkle.

Imagine such a fiasco as the soda tax being played out again and again and again. Preckwinkle doesn’t seem to be the type who will back away from these type of tactics, though she completely lost that battle.

If nothing else, REMEMBER THE SODA TAX should be the anti-Preckwinkle slogan.

By the way, Burke easily won his re-election, and Preckwinkle does have some ties to him… so that could get uglier as the run-off election gets nearer.

In addition, everything I wrote above really was about how awful Preckwinkle was re: public finance. I did not remark on any of the other issues… you can find a different perspective in discussion on this Chicago cop blog. I don’t think either person is a good choice, fwiw.

EXTRA: THE PROBLEM WITH THIS SORT OF ELECTION

So note: only about a third of the voters (and of those eligible to vote, it sounds like scant of 30% of those voted — so we’re talking about 10% of the voting population) voted for one of the two people going to run-off. That’s potentially 90% of the Chicago voting population being very unhappy with this situation (not necessarily, though — perhaps they wanted either as 2nd or 3rd choice).

Anyway, these problems when you have multiple candidates has been known for years, and led to a Nobel Prize for Kenneth Arrow.

I talk about his result in this decade-old video:

Here is an alternate approach — not that this will ever catch on in Chicago. But thought you might find it interesting.

It’s called Single Transferable Vote.

Best wishes, Chicago!


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