In difficult budget times, we need to make sure that we close tax loopholes and re-examine deals that have outlived their usefulness. I introduced an amendment to the amusement tax ordinance that was passed by the Cook County Board of Commissioners on February 1, 2012 to address these loopholes. The amendment would require the County Board to approve exemptions or waivers to the County's amusement tax where the loss to the County would be $150,000 or more in tax revenue.
Such tax exemptions have been granted to the popular Chicago music festival Lollapalooza. Lollapalooza is a success story and a great example of how public tools like temporary tax abatements can be catalyst for cultural entrepreneurship, but the taxpayers no longer need to subsidize a profitable event.
January 23, 2012
If the city won't reexamine the boondoggle of a tax break that the Daley administration gave Lollapalooza, even in the midst of an epic budget crisis, the county will.
Cook County Commissioner Bridget Gainer says she has heard from many of her North Side constituents complaining about the negative impact on their businesses caused by Lollapalooza, and its tax break adds insult to injury. "No tax is paid or reported," she says. "It's absurd."
As first noted in the Sun-Times Thursday, Gainer has introduced a measure that would shift the responsibility of determining whether a non-profit group or event qualifies for an exemption from the 1.5 percent county amusement tax from the county revenue director to the board of commissioners. It is co-sponsored by four other commissioners--Earlean Collins, Deborah Sims, Joan Patricia Murphy, and Liz Doody Gorman--and Gainer said several Republican commissioners are likely to lend their support. Although Lollapalooza is very much a for-profit event, it partners to apply for all of its licenses with the non-profit Parkways Foundation, a favorite group of former Mayor Daley and his late wife, Maggie. A long-term sweetheart deal negotiated in part by the festival's attorney and lobbyist, Daley nephew Mark Vanecko, exempts it from paying the 5 percent city amusement tax and the 1.5 percent county amusement tax, as well as the state sales tax levied on every other major event in Chicago--even though the municipal code clearly states that every big concert and sporting event must pay what's owed unless 100 percent of its profits go to charity. Key Lollapalooza beneficiaries: Kevin Killerman, Mark Vanecko, C3 Presents main man Charlie Jones, and Ari Emanuel. Last year, Lollapalooza gave Parkways more than $2 million for park improvements, but its gross revenues were more than $21 million. The county got nothing from the event. The break on the city and county amusement tax saved the festival more than a million dollars, on top of the approximately $1 million city officials say any other group would pay to commandeer Grant Park for more than a month at the height of the summer.
The loss in sales tax could be even more substantial, Gainer said, since local government has no idea what that cut of souvenir, food, and alcohol sales would even be. Parkways applies for the festival's liquor license, but as this blog has reported, actual sales are handled by a corporation co-owned by Texas promoters C3 Presents and local bar owner Kevin Killerman, a client and friend of Vanecko. Gainer knows a lot about how both the Park District and Parkways should work: The energetic young progressive worked for the former as the director of Lakefront Parks until 2001, and she sat on the Parkways board until 2005, including the period when Lollapalooza first came to Chicago.
"This wasn't the way this [the Lollapalooza deal] was supposed to go down," Gainer says. Initially, it was considered a break to bring a speculative venture to Chicago. But Lollapalooza now has proven to be very successful and hardly in need of a benefit that no other major entertainment event is granted. "If you don't need that kind of support to survive, it should be given to someone else... some other cultural event," Gainer says. She and her fellow board members approached the state's attorney about how best to rectify the situation, and Anita Alvarez's office recommended bringing the annual review of the Lollapalooza tax abatement under board control.
County commissioners will vote on the proposal on Feb. 1. Meanwhile, Gainer says Illinois Representative Sara Feigenholtz plans to examine the festival's waiver on the state sales tax. Initially modeled on C3's Austin City Limits festival, Lollapalooza has become one of the most successful and profitable concerts of its kind in the world, and its owners since have expanded to stage similar events in Chile, Brazil, and Australia. Cook County Board President Toni Preckwinkle had no comment on Gainer's initiative last week, and this reporter still is waiting for a response to questions about the county tax break posed to Preckwinkle's spokesperson last August. At that time, after questions about Lollapalooza's tax break were raised by the Sun-Times and this blog and harshly criticized in a strongly worded Tribune editorial, Mayor Rahm Emanuel pledged to ask for an independent review of Lollapalooza's break on the city amusement tax before this year's concert. Emanuel has recused himself from any negotiations with the concert because it is co-owned by C3 and William Morris Endeavor, the Hollywood talent agency run by his brother Ari, many of whose employees made substantial donations during the mayoral campaign. Chicago aldermen Joe Moreno and Scott Waguespack have also called for a new look at Lollapalooza's sweetheart deal. But to date, as services are being slashed, fees and fines increased, and city employees laid off in record numbers, the city council has yet to turn its attention to the substantial revenues that have been waived from the music festival.
]]>January 19, 2012
The Cook County Board would have the final say before granting tax exemptions for big-ticket events such as Lollapalooza under a plan introduced this week by County Commissioner Bridget Gainer in response to a report in the Chicago Sun-Times last year.
Currently, County Board President Toni Preckwinkle's revenue director decides whether a group such as a non-profit or event qualifies for an amusement-tax exemption. But if the board approves Gainer's measure that authority would shift, at least on bigger deals, to the board. The measure comes months after the Sun-Times reported the city and county have been granting amusement tax exemptions for Lollapalooza for the last seven years. In 2011, that meant promoters saved $1 million in taxes at the event. Here's how it works: Though Austin, Texas-based Lollapalooza promoter C3 Presents puts on and manages the festival, booking the acts, hiring the vendors, overseeing the entire operation and reaping the profits, the Chicago Park District, which owns Grant Park, doesn't contract directly with C3. Nor does C3 obtain the liquor licenses for the festival. Instead, that's arranged through the Parkways Foundation, the park district's not-for-profit fund-raising arm, which serves as a conduit between the promoters and the district -- an arrangement that cost the county $350,000 in amusement tax revenues last year.
Gainer's proposal -- which fellow commissioners Earlean Collins, Deborah Sims, Joan Patricia Murphy, and Liz Doody Gorman agreed to co-sponsor -- calls for a board vote on any amusement tax exemption in which the county would lose $150,000 or more. The measure, introduced Wednesday, also states: The County Board "may deny the exemption application if it finds that the exemption is not in the best economic interest of the county."
"When we are laying off people at the county who work at the hospital and provide vital services then we have to look carefully at who's getting away with not paying taxes," Gainer said.
Preckwinkle did not immediately comment on the measure. But Gainer did say that the revenue director and the state's attorney's office were consulted in crafting the measure. The proposal could come up for a vote as early as Feb. 1. Mayor Rahm Emanuel has said he would ask the City Council to appoint a "third-party, independent" negotiator to broker talks with Lollapalooza and determine whether to eliminate the music festival's multi-million dollar amusement tax exemption. The hands-off stance is necessitated by the involvement of Emanuel's brother, Hollywood super-agent Ari Emanuel. Ari Emanuel is the CEO of William Morris Endeavor, which co-owns Lollapalooza.
Copyright © 2012 -- Sun-Times Media, LLC
]]>January 18, 2012
The Federal Housing Finance Agency is seeking a summary judgment in its case against Chicago's vacant building ordinance before the city even files a response to the lawsuit.
The FHFA, which oversees Fannie Mae and Freddie Mac, filed suit against Chicago last month, claiming that federal law prohibits the ordinance from being imposed on the regulator. The suit seeks to exempt all Fannie Mae and Freddie Mac-owned mortgages from the ordinance, a number that tops 250,000 within the city. In a court filing the FHFA made last week in support of a ruling in its favor without a trial, it also noted that in addition to those mortgages it owns, it guarantees another 750,000 loans in Chicago.
The city's ordinance, passed in November, requires mortgage lenders and loan servicers to pay to register and maintain vacant properties during the foreclosure process, before the properties have legally changed ownership. Cook County subsequently passed a similar ordinance for unincorporated areas of the county and any municipality that chooses to participate. The government argues that the city's ordinance creates a legal liability for the FHFA, that the registration fees required in the ordinance are, in fact, taxes, and that following the ordinance would interfere with the agency's mandate to conserve assets and reduce taxpayer costs. It also noted that if the FHFA must observe the ordinance, it opens the door to 50 states and 60,000 communities to impose similar requirements.
The two sides are expected to appear in court Thursday. Neither responded to phone calls Wednesday for comment. The city, which did not have to file a response to the suit for another month, agreed to move up the court date but has opposed FHFA's request for summary judgment. " It is premature and inappropriate to rush this very important case to summary judgment at this early juncture," the city said in a court filing Tuesday. A ruling against the city will have implications far more reaching that the city's borders. Other municipalities nationally have taken similar actions to help care for the growing number of vacant, dilapidated homes in neighborhoods.
The FHFA "is living in Washington, far away from the reality of what's happening," said Cook County Commissioner Bridget Gainer, D-Chicago, who sponsored the county ordinance. "You give total impunity to the bad actors in the market."
Copyright © 2012, Chicago Tribune
]]>For more information, please call (773) 728-2995 or visit http://www.andersonville.org/events/andersonville-farmers-market
Join the 44th Ward in making a difference in the lives of others!
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December 25, 2011
The cavalry may be on the way. But until it arrives, some of Chicago's most at-risk citizens -- many of whom were once productive members of the community -- will be in greater jeopardy from what experts describe as a frequent nonsystem of care.Expect more of those who are uninsured to be turned away from community centers, more desperate souls seeking shelter with their families, more children whose conditions go undiagnosed, more patients than John H. Stroger Jr. Hospital can deal with, more disturbed offenders shuttled off to Cook County Jail and more homeless people. As budget cuts continue, the ripple effects will hit many: people with chronic mental illnesses whom we may avoid on the streets; and hidden cases, like the suburban mother whose depression is so strong she can't work or care for her children. The cavalry is President Obama's health care reform law, which takes effect in 2014. It's seen by advocates as a way to ensure equal access to quality mental health services. But its worthy aims can only be achieved if it survives court challenges and if state legislatures don't undermine it when devising related regulations, according to nonpartisan experts like Harold Pollack at the University of Chicago's School of Social Services Administration. The help would come in the form of insurance for those often uninsured and incentives for providers who now often spurn the uninsured. But while the law's full impact can't be predicted, the Chicago area's mental health landscape will deteriorate in the interim.
Should we expect continuing declines in government support and a worsening mess? "Yes. Historically that's been the pattern," said Sara Feigenholtz, a state representative from Chicago who chairs the human services appropriations committee in the Illinois House. The budget cuts affecting a traditionally weak mental health system show no sign of abating. Mental health will remain low on the priority lists of most legislators, and among the first items to be slashed. Mental health gets about 6 percent of health care spending, according to The American Journal of Psychiatry. But the journal estimates staggering indirect costs of perhaps $200 billion a year nationally when one includes the impact of incarceration, homelessness, a high rate of medical complications, dependence on emergency room care, lower educational attainment, a reduced ability to hold jobs and the burden on families. But the mentally ill don't have an army of lobbyists and clout-heavy executives making hefty campaign contributions. "In Illinois, mental health services have never been a serious political priority, as evidenced by the recent city and county cuts," said Dr. Ronald Davidson, director of the mental health program at the University of Illinois at Chicago's department of psychiatry. "And reform is at risk of being whittled away by 50 state legislatures, and that means a powerful insurance lobby in Springfield gets one more shot at limiting access to mental health services." When Illinois cut mental heath financing for the uninsured several years ago, hundreds of mentally ill people were told they could no longer get help at the five Community Counseling Centers of Chicago, said Dr. Anthony Kopera, president and chief executive officer. Dr. Kopera runs those centers, employing 260 people with a $17 million budget. But he said the state is six months late with $3 million in payments to him for treating mentally ill patients. "Now the unfunded don't ask us for help," he said. "They suffer until they go to the hospital emergency department, or their symptoms flare up and they get picked up by the police and taken to state hospitals." Mr. Pollack concedes there is immediate stress on a system whose configuration is based on old assumptions as to where the needy live. The suburbanization of poverty, as many exit Chicago, means the migration to Harvey, Calumet City, Hazel Crest and elsewhere aggravates the problem because our network of facilities is based on where they lived long ago. And even if the street peddler confronting you is getting help from a city center that's closing, said Mr. Pollack, he probably won't have the wherewithal to switch to one that remains open.
His last-ditch options? Bridget Gainer, a Cook County commissioner, foresees unrealistic demands placed on the jail and Stroger Hospital, and quotes the poet Robert Frost. "Home is the place where, when you have to go there, they have to take you in."
jwarren@chicagonewscoop.org
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