By: Mark Glennon*
If Mayor Emanuel was intent on halting Chicago’s downward spiral and if we had a General Assembly in Springfield willing to authorize him to do it, his budget address would have included things like this:
Upon completion of this speech I am ordering implementation, as rapidly as law allows, of the emergency financial measures I will describe.
Each of these measures can and will be accomplished either through voluntary agreement, legislation or bankruptcy. It is important to understand the role of bankruptcy as an option. We have prepared a full reorganization plan that incorporates these measures, all of which we need to end our crisis and all of which are achievable in bankruptcy. All city employees, creditors and other stakeholders will be asked to agree voluntarily to them but if they refuse we will get them through bankruptcy.
Our Congressional delegation is sponsoring amendments to Chapter 9 of the Federal Bankruptcy Code, which are already drafted. Those amendments will make bankruptcy, if it becomes necessary for a city our size, a much faster, firmer and more predictable route to robust recovery. Recognizing the severity of our crisis, we are confident Congress will act quickly on those amendments. Stakeholders who balk at voluntary agreement to the concessions we need will regret waiting until those amendments become law. Regardless of the outcome of those amendments, we are confident all the measures I propose below and our full reorganization plan would be confirmed in bankruptcy:
– No further contributions will be made to Chicago’s four pensions or the Chicago teachers’ pension. Instead, a new, affordable plan will be funded to cover new employees and certain participants in the old pensions who are particularly hurt by terminating the old plans. We are confident in our position that the city is not liable on obligations to pensioners in the old plans, so they can be allowed to run dry. We have already asserted that in court and our position awaits a final ruling on appeal. Failing that, a constitutional amendment deleting the pension protection clause will be passed by the General Assembly and put to referendum. If those efforts fail, bankruptcy again provides a decisive, last resort to deal with unfunded liabilities of the old pensions.
– All existing collective bargaining agreements will be terminated.
– Layoffs and pay cuts will be broad and deep.
– Massive operational changes mostly designed to reduce excessive labor use will be aggressively enforced.
– Overtime will be eliminated to the the full extent allowable under Federal law.
– Underperforming workers will be fired summarily.
– The Chicago Public School System will be reconstituted. An entirely new one will be created that will acquire needed assets from the old entity and all funding for education will go to the new entity. The new system will include elements of privatization and choice. Liabilities of the old system will be left unpaid except insofar as they must be assumed by the new system to acquire needed assets. Good employees of the old system will be rehired.
-Taxes must be raised, but not until our entire list of reforms is fully implemented. I pledge that no further tax revenue will be squandered in vain.
Those financial measures will fail in the long term unless matched by a cultural revolution in Chicago area government. From this day forward nothing will be the same about the ‘Chicago Way.’ Nothing:
– We will adopt a radical, new ethical ordinance that includes, for example, a ban on lawmakers working on property tax assessments and appeals. That ordinance will be enforced by inspectors general with broad powers and full budgets. The leeches and mopes among you left over from the Daley years would be wise to retire now.
– As for rank and file workers who have been part of the problem, you have disgraced the many who work with commitment. The joke about public employees here has long been “one guy working and two guys watching.” No more. To the contrary, the layoffs coming mean remaining employees will shoulder more work than normally should be expected. I recognize the unfairness for you who already work hard, but I ask you to stick it out and help see us through this.
– Of the private sector, I ask for your generosity. We’ve failed to provide many public services that should be expected from a city with our resources, and I beg you to fill in where you can until we get this fixed.
Chicago, you have been misled, and I have been horribly wrong. The crisis we face is more severe than commonly known and much worse than I ever understood. To date, I’ve made some tough decision but mostly denied and delayed.
That’s over. The remedy must fit the malady or we are doomed.
Have a nice day.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.