Chicago

Chicago Mayor Proposes Dealing Drugs, Gambling to Make Ends Meet

Rahm Emanuel wants pot legalization and a casino so the city can grab more taxes for its pension debts.

|

Mayor Rahm Emanuel
Jim Young/REUTERS/Newscom

Tired: Then-Secretary of State Hillary Clinton declaring in 2011 that America shouldn't legalize drugs because "There is just too much money in it."

Wired: Chicago Mayor Rahm Emanuel explaining that Chicago must legalize drugs because they need the tax revenue to keep from going bankrupt.

Today, Emanuel, who is going to be stepping down rather than seeking a third term in office, is giving a speech to Chicago's City Council calling for the state of Illinois to legalize marijuana and a casino in his city. It is not because the mayor suddenly developed an interest in the right of Chicago citizens to do what they want with their bodies and money. Rather, Chicago is financially collapsing under the weight of its pension obligations to city employees, and it needs revenue badly. It's already taxing just about everything else it can get its hands on. The Chicago Tribune explains:

The mayor will propose that any tax money the city receives from the legalization of recreational marijuana be dedicated entirely to pensions and he'll do the same for any taxes generated by a long-sought Chicago casino, according to sources familiar with Emanuel's speech who were not authorized to discuss his plans publicly. The mayor also will move forward with requesting that aldermen consider setting up the structure to issue pension obligation bonds to help reduce the amount of money the city owes the retirement funds in the near term, the sources said.

So the revenue Chicago brings in from marijuana sales or gambling won't be used to bolster resources, build infrastructure, or put more police or firefighters out on the streets. All that money would go entirely to trying to keep the city's annual budget from being overwhelmed by skyrocketing pension debts.

And even that might not be enough. The city is going to need $276 million in new revenue in 2020 and $310 million in 2022 in order to properly fund employee pensions. To be clear there, that's the new revenue they need to find on top of already existing commitments. By 2023, the city is going to be having to pay $2.1 billion into its pension funds altogether. Emanuel's proposed budget for 2019 is $10.67 billion.

One of the other ideas Emanuel is floating to try to keep Chicago's budget from collapsing is borrowing $10 billion in bonds, directing that money into the pension funds, and hoping the investment returns on the bonds outpace the interest rates on the debt. Which: yikes! This is very much in the vein of trying to use one credit card to pay for another credit card bill. The Chicago Times diplomatically observes that financial experts describe such a plan as "risky." Borrowing in order to pay its pension debts is one of the many reasons why Detroit ended up going bankrupt in 2013.

What really needs to happen to stabilize Chicago's budget is for the city to scale back pension benefits. To be fair to Emanuel, he's been trying to do just that, but Illinois' constitution has a provision that has made it legally impossible for Chicago (and any other municipality in the state) to scale back any public employee benefits once they've been offered. Some efforts to pull back on employee benefits to try to save money have been struck down by the state's Supreme Court as unconstitutional.

Emanuel is therefore also proposing a change to the state's constitution to try to amend that clause to make it possible to scale pension benefits back before they bankrupt Chicago. His primary target appears to be a guaranteed annual 3 percent cost-of-living increase for retirees, even when inflation is non-existent and even when the city has to furlough or lay off working employees to balance the budget.

It's going to be a tough sell in a state where the public employee unions are essentially in charge. The amendment will require a three-fifths vote in the state's Democrat-controlled assembly. And then it goes to a public vote, and you better believe the state's public employee unions, who have fought tooth-and-nail against attempts to scale back retirement benefits, are going to mobilize.

NEXT: When Democrats Loved Deregulation

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Today, Emanuel, who is going to be stepping down rather than seeking a third term in office, is giving a speech to Chicago’s City Council calling for the state of Illinois to legalize marijuana and a casino in his city.

    This is why I used to cringe when 80s/90s era Republicans used to say government should be run like a business. I know what they meant, but that’s not what’s happening.

  2. And they won’t just piss that money away like they have every other dime of taxes they have collected. They promise to be good this time. Giving these people money is not different than giving a drug addict who promises to use it to turn the lights back on and buy food for his kids money.

    1. Would be nice to get legalized marijuana and a casino out of it though.

      1. They were going to squeeze the money out of someone anyway. Might as well get something for our efforts.

  3. The city will go bankrupt even if every person living there becomes a total stoner and buys weed by the truckload.

    1. Yes. The only question now is when it will happen and who will get screwed, the bond holders or the pensioners, when it does. At this point, anyone dumb enough to buy a bond from the City of Chicago deserves what they get.

      1. At this point, anyone dumb enough to buy a bond from the City of Chicago deserves what they get.

        Like the people signing up for jobs for the pension, especially at this point, are merely acting as any reasonable person would and in good faith?

    2. Sure, but the bankruptcy will be much more mellow.

      1. Not to mention what it will do for sales of snack foods.

  4. Maybe the city can operate high-end brothels. It would do wonders for the tourist trade as well as paying of the municipal debt.

    Of course, given the public sector unions, they would probably be unionized brothels, which gives me an opportunity, hopefully for the last time, to use this joke:

    “I’m sure you’d like Tiffani, sir, but Bertha here has seniority.”

  5. I seem to recall a prior era of history when Chicago operated off of the revenue generated from vice…

    1. That would have been anytime from 1833 to now and beyond.

  6. Chicago should look into a bartending job it’s easy to deal and run book from behind a bar

    1. And if the bartending job doesn’t work out, you can always just run for Congress.

      1. easiest way for a man to get rich nowadays.

  7. Is it still illegal to show nips at strip joints?
    Last time I was there (1999) the grils had to put a coating of latex on the nipple only as the exposed areola wasn’t considered nudity under their clumsily written law.
    It looked strange with a nip coated in latex — a bikini top would’ve looked better.

    1. Is it still illegal to show nips at strip joints?

      Only within city limits (Cook County?) and if alcohol is being *served*. It’s not exceedingly dissimilar from the state laws (full-nude/dry bar) or the laws of other states. Certainly there are more permissive states (like Ohio or WV), but Chicago/IL isn’t exceedingly draconian in this regard. IN is dry for any amount of nudity and, AFAIK, BYO isn’t allowed.

      1. Come to WI! Booze and nips as far as the eye can see!

  8. TreasonNN.com is now against legalizing weed?

  9. HMMM, a city that has been run by Dems for decades going broke, who would have thunk it?

  10. Maybe sex work will be next?

    Rahm Emanuel is already a whore. And not the good kind, either.

  11. So the revenue Chicago brings in from marijuana sales or gambling won’t be used to bolster resources, build infrastructure, or put more police or firefighters out on the streets. All that money would go entirely to trying to keep the city’s annual budget from being overwhelmed by skyrocketing pension debts.

    Well, there is an obligation owed on the pensions, in writing, whereas resources, infrastructure, and public safety aren’t exactly owed to anyone.

    But the whole argument is posited on the notion that spending money frivolously is a new phenomenon for “The City That Works”.

  12. Criminalizing cannabis is taxing cannabis

    1. To an economist perhaps.

      To the person using or selling the cannabis, it’s the difference between having tax headaches like a respectable businessman, and getting thrown to the ground and handcuffed and processed like a criminal.

    2. Yeah but if it’s criminal all the profits go to criminals. If you legalize and tax it, then all the profits go to elected criminals.

  13. I wonder what the Illinois state government thinks of this? It’s pretty common for governments to use dealing drugs and gambling to raise revenue, but as far as I know it’s exclusively _state_ governments that do this. And of course they like to call it “state liquor stores” and “lotteries” to pretend that they’re not dealing drugs and gambling.

  14. ” but Illinois’ constitution has a provision that has made it legally impossible for Chicago (and any other municipality in the state) to scale back any public employee benefits once they’ve been offered. ”

    The Illinois Constitution IS a suicide pact

  15. There’s gonna be blue state crime wave like NEVER seen before in the 70s, 80s,…..thank you Trump.

  16. I essentially started three weeks past and that i makes $385 benefit $135 to $a hundred and fifty consistently simply by working at the internet from domestic. I made ina long term! “a great deal obliged to you for giving American explicit this remarkable opportunity to earn more money from domestic. This in addition coins has adjusted my lifestyles in such quite a few manners by which, supply you!”. go to this website online domestic media tech tab for extra element thank you .

    http://www.Mesalary.com

Please to post comments

Comments are closed.