October 2–8, 2015; Chicago News
These aren’t pleasant times in Chicago. The truly horrible news is that this past September was Chicago’s deadliest September since 2002, with more than 60 homicides. For the year, homicides so far are up over one-fifth compared to the same time period in 2014, and shooting incidents are up 75 percent. While the nation focuses on the truly horrible mass murders that occur with regularity, such as the recent tragedy at Umpqua Community College where a young man executed nine people, in Chicago, the homicides come nearly daily, usually in multiples on weekends, and continue so inexorably they are almost accepted as facts of life and death in some of the city’s neighborhoods.
Prior to the bankruptcy, a similarly spiraling crime rate and impending sense of violence and danger could be found in neighborhoods in Detroit and in the downtown area. When cities start to collapse, the indicators are multiple and interrelated. Although plenty of cities are in the midst of economic boomlets, that wasn’t the case in pre-bankruptcy Detroit and may not be the case in Chicago today.
In the Chicago News, a weekly free newspaper, David Malone asks whether Chicago’s financial crisis is making the city into a new Detroit. While Chicago has cut expenses and raised revenues to reduce the city’s operating deficit to its lowest level since 2008, the city is still in fiscal difficulty. Malone cites the statement of Chicago’s mayor, Rahm Emanuel, that the city started 2015 with a deficit of $426 million. “There is no doubt this year’s budget will require difficult choices,” the mayor wrote in the cover letter for the city’s Annual Financial Analysis.
Emanuel said that the solutions, if there are any, necessitate an “all hands on deck” commitment from “elected officials and residents alike.” Echoing Detroit, one of the big challenges is to pay down the city’s unfunded pension debt for the pensions of police and firefighters and presumably other retired public servants. In this year’s budget, the City adopted a property tax increase, and for 2016 is expected to charge households for garbage pickup and to tax e-cigarettes. Despite these increases plus already having one of the highest sales tax rates in the nation, the new revenues will not eliminate the deficit of unfunded pension liabilities or the challenges in maintaining municipal services.
Malone asks his readers, “Is Chicago in as much trouble as it seems and do we have another Detroit on our hands? Or will the ship begin to right itself?”
“All hands on deck” would seemingly involve Chicago’s philanthropic foundations and its community of nonprofits, much like it did in Detroit, though with solutions that fit Chicago’s distinct circumstances. Mayor Emanuel has not declared bankruptcy, the city’s political dynamics have not taken the kind of body blow dealt to Detroit’s under the leadership of now jailed ex-mayor Kwame Kilpatrick, and despite the financial crisis, there do not appear to be federal judges and major foundations crafting a Chicago version of Detroit’s “Grand Bargain.” That being said, there will be questions about what Chicago’s nonprofit sector is prepared to do and when.
On the website of the John D. and Catherine T. MacArthur Foundation, the largest grantmaker based in Illinois, there is a statement of commitment to its home city: “MacArthur is committed to Chicago, our headquarters and our home. The Foundation seizes opportunities to work locally as an expression of civic commitment and because being rooted in Chicago yields a deeper understanding of issues faced by urban areas and how to address them.” The foundation is certainly attuned to the deficit issue, providing grant support to the Fiscal Futures Project at the University of Illinois, which this year issued Apocalypse Now, a devastating critique of the state’s structural deficits compounded by a history of financial gimmicks.
Not long ago, however, the MacArthur Foundation announced that it was ending its significant portfolio in housing (and other areas) in order to focus on climate change and violence reduction, which had significant impact on the 75 or so local groups that have long received MacArthur support. MacArthur “genius” award winner Hipolito “Paul” Roldan, president and CEO of the Hispanic Housing Development Corporation, described the MacArthur decision as “not good, especially at a time when we have a governor biting economic bullets and a city verging on bankruptcy.” If Mayor Emanuel were to approach MacArthur with a request that it play a substantive, financial role in helping the city through its fiscal crisis, there is no saying how the new mission focus of the foundation might shape its response.
MacArthur may be the “bigfoot foundation” in Chicago, but it has company with other respected grantmakers on the scene. For example, MacArthur was joined by the Joyce Foundation, the McCormick Foundation, and the Chicago Community Trust in paying for the Civic Federation’s 2011 analysis of the city’s financial challenges, a sober review of the city’s structural deficit and the shortcomings of one-off non-recurring revenue responses. That analysis and others didn’t delve into the “other” deficits that the city and state face, including the huge shortfall in the budget of the Chicago public schools, projected earlier this year at $1.1 billion.
Malone asks his readers if Chicago is another Detroit. The issue is much more than Chicago’s serious problem of gun violence and homicides—not just a strategy of responding to this problem, but a question of how to pay for the policing and programs necessary to stem the spate of shootings. The question for Chicago’s philanthropic sector may be, do Chicago’s philanthropic leaders have a strategy in mind for what foundations could and should do in case the mayor and the aldermen show up to ask the tax-exempt sector for Detroit-like emergency help?—Rick Cohen