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People’s City Council: community perspectives on fiscal crisis

Fifteen hundred community activists from neighborhoods across the city will gather tomorrow evening for a People’s City Council to make sure that the needs of Chicago residents – jobs, housing, education, services and safety – aren’t sacrificed for an agenda driven by corporate greed.

Twenty or more aldermen are expected to attend.

Sponsored by the Grassroots Collaborative and twenty community, labor, and civic groups, the event takes place at 6:30 p.m., Thursday, July 7 at the UIC Forum, 725 W. Roosevelt.

“With all the talk about ‘shared sacrifice,’ we want to make sure that it’s not just community residents sacrificing in terms of service cuts and job losses and their ripple effects,” said Eric Tellez of Grassroots Collaborative.  “We want to make sure the banks and corporations are sharing in the sacrifices and not taking more resources than they need.”

“We understand there are problems, but we see how the city treats contracts it has with unions,” said Tellez. “They take the position that the economic reality means we have to renegotiate.  Why not do that with the banks that have interest rate swaps that are costing millions of dollars a year?”

Those deals were sold to cities and school districts across the country as a way of saving money.  National Peoples Action has estimated the deals are costing the city $74 million a year, and the Chicago Teachers Union says they’ve cost CPS $125 million to date and could cost nearly $700 million.

The rub is that the banks are profiting so handsomely – while local governments drown in budget crises – precisely because the Federal Reserve dropped interest rates as part of the bank bailout.  Banks are now getting money at under 0.5 percent interest and lending it to the city and schools at 4 and 5 percent.

Meanwhile, the same banks are costing the city at least $36 million a year, and probably much more, by walking away from vacant homes, according to a recent study by the Woodstock Institute.

[On Tuesday, a CTU delegation met with Bank of America officials to demand that they renegotiate interest rate swaps; according to the union, the bankers refused, saying “a contract is a contract.”]

Tellez said that the area’s biggest foreclosers – BoA, Chase and US Bank – have made $127 million over the past five years handling the city’s finances, and called on the city to use the power of it purse to demand responsibility from banks.

There are also the TIF subsidies for developers and corporations that continue to drain $250 million a year from schools.   “The TIF subsidy program is never interrupted,” said Tellez, with multimillion-dollar subsidies still being handed out, while teachers are cut and property taxes are raised.

The same groups held a massive New Chicago 2011 mayoral forum last December.  On Thursday night, grassroots leaders will share personal stories on the impact of issues like foreclosure, and rank-and-file city workers will give their perspectives.

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Category: city budget, CPS, TIF, urban agenda

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