Is Chicago really broke? Book challenges that notion
September 1, 2017

Tom Tresser has appeared on WGN Radio and other media venues to promote the information in Chicago is Not Broke.

By Madeline Makoul

A book is challenging the popular notion that Chicago is in dire financial straits. Chicago Is Not Broke: Funding the City We Deserve, edited by Tom Tresser, features chapters by ten contributors who share ideas on repairing the City’s finances.

“One of the narratives that the City has offered over the years to justify corruption and bad deals is that the City is broke,” Tresser said. “They say that we have no money, but they also say that we have no ideas. That is to say, we are bankrupt fiscally and with civic imagination.”

Tresser, who has been active in local politics for 30 years, began questioning that narrative in 2009 when the City was bidding to host the Olympics. Tresser discovered the City had $1.6 billion in tax increment financing (TIF) accounts, leading him to ask, “How could we be broke?”

Tresser convened a group of experts for the book, focusing on three major areas: “Money that is stolen from us,” “Money that is hidden from us,” and ”Money that is not collected but should be.”

‘Money stolen from us’

This section focuses on the costs of corruption, toxic bank deals, and alleged police abuse.

Dick Simpson, a political science professor at the University of Illinois at Chicago (UIC) and a former alderman, said Chicago is the most corrupt metropolitan entity in the country. Simpson estimates corruption costs the City $500 million annually—from police abuse cases, ghost payroll scandals, bribery cases, tax evasion, and embezzlement.

“We have sent more officials to the pokey than any other jurisdiction in America, including 32 alderman,” Tresser said. “It’s a long, sad story of corruption on many accounts.”

With corruption deeply rooted in Chicago, Simpson thinks it will take more than a decade to change the culture. While he said there is no “silver bullet,” mobilizing groups advocating for change and transparency can make a difference.

“Ending corruption would be a positive even if we didn’t save a penny because it would restore democracy,” Simpson said. “But the savings would be actually quite substantial, and that should be something everyone is concerned with.”

The chapter by Jackson Potter, a staff coordinator at the Chicago Teachers Union, examines the cost of bad bank deals. Potter focuses on a “toxic swap scheme” by former Chicago Public Schools (CPS) board chair and Board of Trade CEO David Vitale that cost CPS dearly after the 2008 market crash.

Vitale “gambled with the future of Chicago’s children and put us in bed with banks when he thought he could outsmart the market,” Tresser said.

Potter estimates Chicago could save $1 billion by getting out of such deals.

The chapter by Jamie Kalven looks at the cost of police abuse, not only from civil suits and settlements but from alienation and distrust in communities.

Tresser said the cost of residents not trusting the police is enormous and “erodes the heart of the city. The cost of police abuse has been playing out in Chicago for decades, and while you can’t calculate the cost of a lost life—of a young man shot in the back by a policeman—you can calculate the legal costs, preparations, etc., and that’s more than $650 million in 12 years,” Tresser said.

If Chicago ended police abuse, Kalven estimates the City would save $50 million annually.

‘Money that is hidden from us’

“Money that is hidden from us,” written by Tresser, refers to the impact of tax increment financing. While TIFs are intended to attract developers to improve blighted areas, they take property tax dollars that otherwise would have gone to public schools, libraries, and other services.

Since 1986, TIFs have extracted $5 billion in property taxes in Chicago. At the start of 2015, the TIF accounts still held $1.44 billion, Tresser reported.

“It’s a giant slush find, it’s the money you stuffed in the mattress,” Tresser said. “We know they are collecting it, that’s not the mystery. The mystery is where the hell is it?”

With money continuing to flow into the City’s 148 TIF districts, tax dollars that could have gone to services including CPS dwindle: Tresser noted CPS continues to lay off employees and that two-thirds of schools have no libraries.

“The schools are the glue of com-
munities, especially in the poorer communities of color,” Tresser said. “When you kill those schools—and they are dying slowly—you kill the community. So you have to ask what is the mayor about? What is his agenda?”

If TIFs ended as Tresser proposes, $421.5 million of new revenue would go to the Chicago Public Schools, Chicago Public Libraries, and other City services.

‘Money that we are not collecting’

“Money That We Are Not Collecting” proposes new approaches to help Chicago’s finances: a progressive income tax, a financial transaction tax, and a public bank.

Hilary Denk, vice president of the board for School and Community Assistance for Recycling and Composting Education and a director for the League of Women Voters of Illinois, said a graduated income tax that replaces the current “regressive” flat tax would ease the burden on lower income families.

“If you keep money in the pockets of lower and middle income people, they spend it in their neighborhoods,” Denk said. “They spend it on things they need, and that drives the economy.”

Denk noted a progressive income tax also would support City services, bringing in $85 million in new revenue.

Ron Baiman, assistant professor of economics at Benedictine University, and Bill Barclay, adjunct professor in business administration at UIC, propose a financial transaction tax. While Chicago is home to one of the largest financial trading markets, including the Mercantile Exchange, Board of Trade, and Board of Options Exchange, the professors point out that those entities are barely taxed.

Baiman and Barclay call for a “LaSalle Street Tax”—a $1 per contract fee on agricultural futures and futures options and a $2 per contract fee on other futures, futures options, and stock index options traded at the CME, CBOT, and the CBOE. They estimate the tax could generate $2.6 billion a year.

Public bank

Amara Enyia, principal of ACE Municipal Partners, proposes establishing a public bank in Chicago, a concept that has succeeded in North Dakota for almost 100 years. Enyia said a public bank offering cheaper credit for home purchases and student loans would help spur local economic development and keep profits in the city as opposed to going to Wall Street banks.

If Chicago had implemented a public bank in 2010, Enyia estimates the City would have saved $1.365 billion in debt service.

Impact of policies

Tresser and the authors have held 50 meetings around the city with 7,000 people to generate public conversation about the policy issues their book raises.

While City officials have given little response to their ideas, Denk thinks residents should ask officials about these ideas and push them to implement changes that would benefit Chicago communities.

“We don’t live in a time of scarcity, we live in a time of abundance,” Denk said. “But that abundance is going to the top 1%, and these are policies that will change that.”

Tresser said the book’s proposed policies are not new—civic leaders and others have discussed them for years, with many such policies put into practice elsewhere. Through Chicago Is Not Broke, Tresser and the other writers brought all of these ideas together in one place, clearly laying out the City’s budget and spending in a way citizens can understand. Tresser said increased understanding allows for more conversations about the mayor’s and other City officials’ decisions—conversations that are long overdue.

“The main premise [of the book] is to expand Chicago’s civic imagination beyond the limited ideas that are presented by the mayor and his allies,” Tresser said. “They are only showing us a little bit of their cards, and that is hurting the city. We want to expand that conversation.”

Host a Meeting-in-a-box

Tresser is asking people to host a Book Meeting-in-a-Box at their homes. He will send ten books to you plus a discussion guide. You invite people to your home and either give or sell them the books. He supplies a link to a prerecorded personalized video introduction that you play for the attendees.

If you bring your guests back together after they read the book, Tresser will join that gathering via a live video chat. Contact Tresser at (312) 804-3230 or

Gazette Chicago attempted to talk to local aldermen who serve the publication’s coverage area about the book, but they did not return phone calls or declined to comment.

To learn more about the issues discussed in Chicago Is Not Broke, visit