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Stuart Loren Profile picture
@StuLoren
Mar 3, 2023 • 16 tweets • 7 min read • Read on X
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1/ Arguably, the most important issue facing Chicago is the pension deficit. There's no way to tax our way out of this. We need growth plans. Vallas gets this. Johnson believes in "trickle down pension-omics." More tax $ for his CTU pals at the expense of a functioning city. Image
2/ Here's the summary of each candidate's plan. Johnson's tax ideas are indicative of zero understanding of how the economy works. Last time I checked, there's no wall around Chicago preventing anyone from leaving. Under Johson, we'll have higher tax rates and lower revenue. Image
3/ Like I've said many times, we already have some of the highest local taxes in the country. And our 9.5% corporate tax ranks #3. But I'm sure ramping taxes even more will make people and businesses flock to Chicago and everyone will soon be pockets deep in free money... ImageImageImage
4/ Seriously, though, Johnson's tax ideas indicate he doesn't have a grip on reality. Chicago is in the bottom half of cities when it comes to economic growth. A robust 0.9% for 2022. You think higher taxes will improve that and bring in more revenue? kenaninstitute.unc.edu/american-growt… Image
5/ And our unemployment statistics are abysmal compared to the rest of the country. But I'm sure businesses will definitely invest more here and hire all the workers knowing that they will face higher taxes for doing so. Right?...

bls.gov/regions/midwes… Image
6/ Also, raising taxes on people making over $100k? Sorry, this isn't 1960 where that makes you in the financial elite. People in that tax bracket aren't exactly thriving at the moment. Ironically, higher taxes will hurt his CTU comrades as enrollment plummets as people move out. Image
7/ And this is great - straight from his plan. My guy, not a single non-resident will step foot in this city.

brandonforchicago.com/issues/city-bu… Image
8/ Here are a few more summary details from his plans if interested...
9/ Anyways, the issue with Johnson and his far-left supporters - including our good friends in the democratic socialist community - is that they think taxes and revenue have a linear relationship. Ever hear of the Laffer Curve my man? en.wikipedia.org/wiki/Laffer_cu… Image
10/ Ok, back to Chicago's pension deficit. We're drowning in debt here - and it's constitutionally protected under state law - so no hope of reform. The only way out is to grow revenue by improving our economic performance. Johnson's plans would just make our finances much worse. Image
11/ Vallas seems to get that taxing our way out of this is impossible and we need to get our economy growing again (which also means we need to focus on public safety as that's a MAJOR impediment to business investment here).
12/ Our pension problems are so much worse than most appreciate. Want to know why city services are in such bad shape? Because a third of our revenue has to go to pension payments (and 80% of our property taxes). Again, we need to GROW revenue.
papers.ssrn.com/sol3/papers.cf… Image
13/ Here's a much more detailed discussion of our city and state pension woes if interested - which will likely deteriorate given the current economic and inflationary environment.
14/ I've been talking about this stuff consistently for almost two years now. Here's a good recap from last year.
15/ And here's my original commentary from 2021. Not much has changed. Johnson would make most of the trends I've discussed in the last two years worse, leaving our city finances and economy in shambles. And our pension problems exponentially worse off.
16/ But like his ideas sound cool and hip. Everything will be solved if we just "Tax the rich". Make non-residents pay. Stick it to "Big Corporations." Democratic socialism is a hell of a drug...

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More from @StuLoren

Stuart Loren Profile picture
Nov 27, 2023
1/ Some working thoughts: Much of human history is a story of tribal allegiances and conflict. For an exploration of the scientific reasons we may be hardwired for tribalism, I’d recommend renowned biologist E.O. Wilson’s The Social Conquest of Earth.

amazon.com/Social-Conques…
Image
2/ The tragedy of modern America is that we are undermining the achievement of a society in which we were united by ideals instead of what are often divisive group dynamics. If we’re decreasingly bonded by our national heritage, we risk social upheaval.

axios.com/2023/07/25/mil…
Image
3/ The US is special - and was unique for its time -
in that it was founded on ideals, and not ethnicity or religion. Despite the inherent contradictions between these ideals and the realities of early American society, the ideals are no less worthy of admiration and aspiration. Image
Read 9 tweets
Stuart Loren Profile picture
Jun 14, 2023
1/ News today that CPS budget will remain steady at $9.4b in FY 2024. But more notable is that CPS will use its taxing authority to increase property taxes 5% in Chicago to help funding. At this rate, CPS and the city will just own all our houses soon…

cps.edu/about/finance/… Image
2/ In the private sector, when demand for your product or service declines 20% over a decade, you usually get some sort of restructuring that includes right-sizing costs. But in the public sector?… Image
3/ To be clear, I appreciate and respect teachers. My wife was once a teacher in CPS and I benefitted immensely from quality public education. But it’s fair to ask - as city tax payers - what we’re getting in return for this spending increase.

H/T @Wirepoints & @illinoispolicy ImageImage
Read 10 tweets
Stuart Loren Profile picture
Mar 15, 2023
I want this post/comments to be respectful. I just read the below on crime in Chicago in which the author suggests residents' perception of crime has a racial element. While I respect the author's opinion, I would like to offer up a different perspective.
chicago.suntimes.com/columnists/202…
Below is an excerpt from the author's piece. Again, I can appreciate that others in the city have had life experiences that would lead them to think this. Perhaps it is sadly true in many cases. But I can speak for myself at least that my concern about crime is not rooted in race Image
My concern about crime - and I think the concern of many - is that my family has been endangered as public safety has deteriorated. If you have children and those children are put in harm's way, as mine have on several occasions, I think your views/focus on public safety change.
Read 9 tweets
Stuart Loren Profile picture
Mar 14, 2023
Thread on economic and fiscal reality for Chicago. These goals are laudable. I share them. I bet most residents do. But it’s wrong to claim “the resources exist” and that a better Chicago is a matter of “political courage.” Sadly, Johnson’s plans would mean political calamity. Image
Let’s start with city resources. As I’ve highlighted, we pay an obscene amount to our underfunded pension plans, which state law prevents reforming (short of a constitutional amendment). The $2.6b for FY 2023 is over 20% of city expenditures.

chicago.gov/content/dam/ci… Image
Pensions are a “fixed cost” - meaning they have to be paid. It’s not a discretionary spending item like most city services. And when you add in other fixed costs (like interest payments on debt) Chicago is at 43.4% of the budget (per S&P Global). spglobal.com/ratings/en/res…
Read 24 tweets
Stuart Loren Profile picture
Mar 6, 2023
Something I want to return to… Brandon Johnson saying his tax plans won’t drive people out of the city. Aside from lacking in economic common sense, it reveals that he’s unaware of the real economic problem Chicago faces.

cbsnews.com/chicago/news/m…
While we should worry about driving residents / businesses out of the city, we need to focus on bringing people back in. Higher taxes (including on commuters) won’t do that. Here’s how Chicago ranks per a Berkeley study in downtown recovery. 50% vs 2019. downtownrecovery.com
And here are Chicago Metra and CTA commuter statistics courtesy of @biancoresearch. Not great! People aren’t coming downtown for work or entertainment. That’s a lot of lost economic activity.
Read 11 tweets
Stuart Loren Profile picture
Mar 5, 2023
So if we’re gonna have a convo about the company you keep… Brandon Johnson’s biggest backer is the Chicago Teachers Union. Yes, wouldn’t it be great if the CTU had more of a say in city policy? We’d enter a new dawn of socialist nirvana where we don’t need police or finance.
Do we really want a candidate beholden to the CTU? They’ve spent close to $2.5m backing him. He’s their man.
I love teachers - so much that I even married a former teacher! But the Union? Not so much. It’s done wonders for the city… Thanks to their noble work, most public school students are years behind in their educational development. School stopped, but pensions for sure didn’t.
Read 8 tweets

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