Illinois Policy Institute Exclusive: Dan Proft Interviews Alderman Brendan Reilly

Ald. Reilly is the rarest of Chicago politicians, someone who does his homework, speaks quite plainly and openly about what he learns, and offers specific and relevant proposals to “right-size city government”.

by Dan Proft

A Framework for the
Chicago Mayor’s Race: My Interview with Ald. Brendan Reilly

Chicago may be the city that works, but its tax and spend policies do not.

Big budget deficits and bigger unfunded pension liabilities that accompany a bloated city payroll are threatening core services. The city’’s fiscal problems are so acute that Chicago recently found itself on Business Insider’’s ignominious list of U.S. cities most likely to go bankrupt.

It is not simply a new mayor that is required to solve the city’s financial woes but a new model, says 42^nd Ward Alderman Brendan Reilly.

Ald. Reilly is the rarest of Chicago politicians, someone who does his homework, speaks quite plainly and openly about what he learns, and offers specific and relevant proposals to “right-size city government”.

Considering his predecessor was most famous for proposing an ordinance to put diapers on the horses that pull those quaint carriages around the Gold Coast, Reilly is a breath of fresh air (pun intended).

My interview with Ald. Reilly is presented in two parts: (1) a real-time picture of city government in its current form; and (2) policies that answer the “where do we go from here?” question.

I am not suggesting that all of Reilly’s views will inflame the hearts of free marketeers. But I do suggest that Reilly deserves credit for forcing a conversation few in City Hall want to have and offering thoughtful proposals, at some political risk, to advance that conversation.

Lastly, I suggest Reilly provides important source material that adds context and attaches consequences to the mayor’s race. If you live in Illinois, the Mayor of Chicago matters. Reilly’s review explains why.

Part I:  The
Situation

DP: Paint a picture of the financial crisis confronting the city.

BR: Just a month ago the city approved a budget to fill a $655 million shortfall primarily by spending down the last of our long-term reserves. $1.15 billion of parking meters proceeds have been spent—all of it—in the last two years and that’s a 75-year lease. That I thought was a real mistake and that’s why I voted against this budget and that’s why I voted against last year’s budget because the administration had promised not to use long-term reserves to solve short-term
budget crises. To do so is a real mistake.

We need to acknowledge that we’re going to be carrying a massive structural deficit year-over-year until we change the spending and revenue equation. In my view, a lot more can be done to get our spending under control. We need to cap and in some cases eliminate certain entitlements.

DP: Do you think your colleagues on the City Council have the same sense of urgency about the dire straits of city finances?

BR: Not enough of them. There are a handful of us that talk about this every day and understand exactly what kind of cliff we’re about to head over.

DP: Has there been any discussion among that handful about the prospect of bankruptcy if you are unable to forge a legislative solution in advance of the imminent mathematical reality you’’ve described?

BR: That is not something we have discussed but we understand those times are not far off unless we make massive structural changes. There isn’t going to be some magical bailout. We need to make some very difficult decisions now.

What’s difficult in a strong council form of government is building consensus. Many of colleagues come from a very different political philosophy, which is that city services and city jobs are entitlements. People deserve those things.

On the other hand, I believe the city has a basic obligation to provide for public safety, to maintain the city’s infrastructure, to promote economic development and to maintain a certain quality of living that makes people want to stay here. That’s the core mission. Beyond that, if we cannot afford it we need to look at cutting back on it or spinning it off to another
unit of government or the private sector that can do it better.

For example, health care. The city’s Department of Public Health operates a number of satellite health clinics. As I’’ve been examining our city budget over the last four years, I wanted to get a handle on where these clinics are located.

In so doing, I learned that the city clinics are either on the same block or, in some cases, co-located in the same building with a county health clinic that provides identical services to the exact same population. That, to me, is a prime example of wasteful government spending.

Cook County government, no matter what you think of it, the one thing they do fairly well is provide public health care, certainly much better than the City of Chicago does. I have proposed that we spin off our satellite health care clinics to the county.

These programs come with (federal) matching funds. So the county gets employees for whom they have to bear only one-third of the cost and they can better aggregate their purchasing power. The city benefits by getting out of security agreements, long-term leases, asset liability, and headcount.

This is an example where the city can make some structural changes; get out of a line of work that we’re not all that good at anyway, and focus on the four core areas of government I previously described.

We need to look at this (city government) going forward as a brand new opportunity for the city. Most of the city departments were created 50-60 years ago, dealing with very different problems at that time. Things have changed. And certainly our revenue situation has changed. We have to become lean, mean, and more efficient.

DP: On the politics of it all, you have said there are not enough on the City Council who appreciate the urgency of the financial crisis facing the city. With a number of incumbents retiring this year and you not facing a challenge, are you looking to get involved in some of the other ward races in an effort to seat a
few more aldermen who do get it?

BR: Because we have so much at stake over the next four years with a brand new mayor and ten aldermen retiring this year, I think I have a duty to participate. There are
some bright candidates out there who are committed to government reform.

I am going to be evaluating several of these candidates over the next few weeks and reviewing several of the ward races to see if there is an opportunity to bring smart people into city government, hopefully with some background in the private sector, who will take a look at city government through a different lens than some of my colleagues who are less committed to structural reform.

Regardless of where you live in the city, every Chicagoan should vote in the city election this year. These decisions are critically important as we prepare for what will likely be the strongest City Council we’’ve seen in decades. The next mayor will not come in with the strength and the power that Mayor Daley enjoyed.

The City Council is going to be making a lot of big and tough decisions.

DP: Even if you get some of those smart people on the Council this year, how do you bridge the divides of racial politics in the city and build the necessary coalitions of support to enact some of the fiscal reform measures you’’ve raised?

BR: Whether one represents a majority African-American, Latino, or Caucasian ward, we’re all in this together, particularly when it comes to the fiscal challenges. Every community regardless of race depends on strong public education and currently we’re not getting that. Every community depends on frontline public safety workers, particularly our police department. These are the core services of government that should bring people together.

My real concern is regionalism when it comes to infrastructure dollars. I think it would be a real mistake of the next mayor to fall into the trap of regionalism and ignore the central business district and instead focus limited infrastructure spending on sidewalks, curbs, and gutters in neighborhood wards. There may be legitimate needs of that type in those
wards but we cannot neglect the economic engine for the city which is the downtown business district and I’m going to spend the next four years making sure we don’’t.

If we don’t nurture our central business district, we are going to be quick down the path of Detroit, Cleveland and other Rust Belt cities.

DP: The situation is that precarious? If we don’t invest in the central business district, the possibility of Detroit-like ruin for the city is a serious threat?

BR: Let me put it this way, the 42nd Ward (which includes the central business district) is producing close to 60% of the city’s revenue. If that tanks, the city tanks.

It’s not just our Fortune 100 companies. They are a big part but our hospitality and tourism industry is critical to our budget situation. If we are not making forward-looking investments in tourist destinations like Navy Pier and the Riverwalk build out, then we are going to doing ourselves a real disservice.

We are competing in a global environment now. Tourism dollars are not confined to North America. If we are not a true destination city and remain one, then that will have a real negative impact on our ability to fund core city services like public safety.

So we need to make sure people feel safe coming to the City of Chicago, that are bridges are working correctly, and that you can navigate our streets without blowing out a tire. That all costs money and that requires substantial investments in the central business district.

You stop making those investments and people stop coming to the City of Chicago, employers stop bringing employees here, then, yeah, I think you are on a path to a Rust Belt city.

DP: Your political future. The conventional wisdom says that the next mayor is likely to be a transitional figure given the difficult decisions that will have to be made to stave off bankruptcy. Do you subscribe to that view and, if that comes to pass, will you be looking at a mayoral run in 2015?

BR: Whoever the next mayor is going to have a monumental task getting the city’s finances in order which will include making substantial spending cuts and other decisions
that are not going to make that mayor very popular. But that is the job description if the next mayor is truly committed to getting the city back on course.

As far as I’m concerned, whoever the next mayor is, I’’m duty-bound to work with the next mayor to help solve these fiscal challenges and that’s exactly what I’m going to do. I’m going to be rooting for the next mayor, not against.

If the next mayor is making the smart, tough decisions that need to be made, I’ll be right there to support the mayor. If the next mayor doesn’’t do that, well obviously that may require a change down the road.

DP: Several of the major candidates for mayor have sought you out for your support. You’’ve been at City Hall for the last four years and they haven’t. What are you telling them in terms of the issues that you believe should frame this campaign and the questions they must address not only for your support but in order to be effective if they are elected?

BR: Well, the starting point is the city budget. All things flow from the city budget. Any promises any one of these candidates makes over the next two months are going to cost money and if you can’t get this city budget under control you’’re not going to be able to deliver on any one of those promises. So that’’s where I start the conversation with each of the candidates.

I want to make sure they recognize the crisis that we’re in and that they understand that taxpayers can no longer afford this size of city government. What I’m looking for is a candidate who is willing to commit to rebuilding the city bureaucracy from the ground up, department by department. I’’m looking at 2011 as an opportunity to rebuild government. Usually it’s a crisis that forces you to do that but so far I’’ve been pleasantly surprised that each of the candidates I’ve met with has acknowledged that we cannot afford to proceed on the present course and that there are tough, painful decisions that must be made over the next four years.

Coming in part two of my interview with Ald. Reilly: Where do we go from here? Watch for it soon on IllinoisPolicy.org.