QUOTE OF THE DAY
Next City: Chicago Pension Deal Could Cost Taxpayers Dearly
Chicago Mayor Rahm Emanuel’s proposed pension deal with the city’s unions could cost property owners in the Windy City way more than initially advertised. The deal, which is only for roughly half of the city’s unionized workforce, would raise the gross property tax levy by almost a third by 2020, according to Crain’s Chicago.
Emanuel, like so many city mayors before him, stalled this fall, trying to kick the can down the road yet again. But Monday’s proposal would raise the city’s tax revenues by $750 million over the next five years. Problem is, the proposed agreement only sorts out the situation for office and building trade workers and neglects the elephant in the room: police, fire and public school teachers. The Chicago Teacher’s Union called the deal a “heist” in a release yesterday.
And now everyone from retail shops to homeowners could face significantly larger tax liability if the deal is passed. “Chicago’s home, office and retail owners could be on the hook to pay hundreds of millions of dollars a year in higher taxes, with at least some impact on the city’s business climate,” Greg Hintz wrote at Crain’s Chicago.
Blue Sky Innovation: GrubHub shares soar on first day of trading
Shares of Chicago-based GrubHub soared to $40 in their market debut on Friday morning, well above their $26 initial public offering price.
Of the 7.40 million shares offered, GrubHub sold 4 million with the rest by selling shareholders.
The online food ordering company, formed through the August merger of Chicago-based GrubHub and New York’s Seamless, is hoping to ride the wave of highly successful recent technology IPOs.
Forbes: Blowback For Obama: Obamacare Is Strangling Unionism
In 1975, Leonard Woodcock, then president of the UAW, tied the labor movement to making universal health insurance a matter of federal law. It is no stretch to say that Obamacare would never have become a reality without the active support of labor for nearly five decades. But labor’s commitment to what finally took shape in the Affordable Care Act may become the textbook case of a political backfire. Obamacare is killing unionism.
The recent rejection of the UAW at Volkswagen’s Chattanooga plant presents only the latest chapter in the erosion of labor’s appeal. This election wasn’t about wages — VW pays well. Rather it was about work rules and benefits. With so much of the work place already regulated, the election was really about the only thing unions can promise any more, namely, lavish health plans.
But many VW workers recalled that last summer unions begged the President for an exemption from Obamacare’s tax penalty on “Cadillac-style” union benefits. Union members everywhere worry that their plans cannot remain immune from higher co-insurance costs and unwelcome disruptions of provider relationships. The vote in Tennessee was as much about “no-thanking” the UAW for Obamacare as it was about saying “we don’t want Chattanooga to look like Detroit.”
Crain’s: What went wrong with Emanuel’s pension plan?
On paper, it sounded like a dream.
Mayor Rahm Emanuel and members of key labor unions agree on a deal to save two city pension funds that are headed for insolvency, a deal that, like a similar pact recently struck with at the Chicago Park District, would require both management and labor to tighten their belts and put in more money. All that’s needed was approval by the General Assembly, the same legislative body that signed off on the park district deal.
That’s certainly what the mayor and his financial team were hoping for when the deal affecting pension funds that cover white collar municipal workers and laborers was announced Monday night. But the dream all of a sudden has become a nightmare, with Springfield balking and opposition rising.
WSJ: Soaring Housing Costs Driving Educated People From Big Cities
More of America’s highly-educated people are leaving huge cities and going to cheaper areas in the West and South. What is driving the shift? A big factor, says Redfin, a national real-estate brokerage, is soaring housing costs.
Medium-sized cities in the West and South often have a much bigger share of “affordable” homes than the nation’s biggest cities, New York and Los Angeles, according to an analysis of 15 cities by Redfin.
In Houston, Texas, nearly 60% of homes for sale are “affordable” for a two-earner household, meaning the typical couple there — two people making the median income for Houston — wouldn’t have to shell out more than 28% of their pretax income on monthly mortgage payments. Seattle, where almost 50% of homes-for-sale are affordable, isn’t far behind, and then there’s Dallas (45%), Portland, Oregon (40%) and Denver (33%).
Chicago Tribune: Gallup Poll: Illinois last when it comes to trusting state government
By a wide margin, Illinois residents have less trust in their state government than residents in any state in the nation, according to results of a Gallup politics poll released Friday.
Just 28 percent of residents polled said they trust Illinois state government “a great deal” or “a fair amount”, according to Gallup. That put Illinois 50th in terms of trusting their state government, with the next closest Rhode Island and Maine with 40 percent.
Illinois’ “exceptionally low trust level” and dead-last spot isn’t surprising, Gallup said, considering two of its last three governors – Rod Blagojevich and George Ryan – were sent to prison for crimes committed while in office.
Forbes contributor Jeffrey Dorfman crunches the numbers and finds that a single mom (with one child) working at the minimum wage would face the equivalent of a 50% tax rate (from both higher payroll taxes and a loss in government benefits) if Obama is successful at raising the federal minimum wage to $10.10 per hour. Here’s how some minimum wage workers would be taxed at a higher rate than the “top 1%” by Obama’s “compassionate” 40% minimum wage hike.
CARTOON OF THE DAY
