CHICAGO – A proposed sale of Illinois’ downtown Chicago headquarters could generate $45 million in new annual revenue for the distressed Chicago Public Schools, Illinois Gov. Bruce Rauner said Friday.
The pitch from Rauner marked the latest salvo in just one of the issues caught up in the partisan feud between the first-term Republican and the General Assembly’s Democratic majorities that has driven a nearly two-year-old budget impasse. Mayor Rahm Emanuel has been dragged into the disputes as city pension legislation and pension funding help for Chicago Public Schools depends on state action.
Rauner is promoting the sale of the James R. Thompson Center as a means to generate about $300 million for the state and to free the state from responsibility for costly repairs, but is blaming Emanuel and House Speaker Michael Madigan, D-Chicago, for a “tag-team” effort to hold up a sale.
Earlier in the week, Emanuel said he wants firm assurances that the city and Chicago Transit Authority won’t be on the financial hook to rebuild the CTA station under the building.
At a news conference Friday, Rauner announced legislation that would direct all future property dollars generated by the new private development to CPS. The property is not currently taxed because it houses a public building.
CPS currently receives about half of property tax revenues collected in the city. The legislation would divert revenue generated from the new development that would otherwise go to other taxing bodies like the city and Cook County to CPS. Rauner put the amount at about $45 million.
“Selling the JRTC and directing all of the future property tax proceeds to the Chicago Public Schools would benefit both Illinois and Chicago taxpayers," House Minority Leader Jim Durkin said at the news conference. "The legislation would provide CPS with a stable source of additional revenue for years to come, and would let Illinois off the hook for hundreds of millions of dollars in repairs and maintenance costs on a dilapidated building we can no longer afford."
The state has estimated deferred maintenance on the building at more than $326 million.
The offers comes as the city and CPS is trying to close a more than $100 million shortfall that remains after Rauner vetoed $215 million of pension help for the cash-strapped district.
After an adverse court ruling last week in CPS’ lawsuit against Rauner over how the state distributes school aid, Emanuel pledged to help. CPS had warned it otherwise needs to close schools early this June. Emanuel has not provided details on what form the support will take but is expected to outline the financial help for aldermen on Tuesday.
“We are happy to work with the state on their plan to sell the Thompson Center, but the mayor is not going to allow the governor to tear down our L station and then force Chicago taxpayers to pay for it,” Emanuel spokesman Adam Collins said Friday.
The administration also admonished the governor on his numbers, questioning where the $45 million figure came from, when other buildings that occupy a city block, such as the iconic Willis Tower, generate far less.
The city would also need to further raise its property tax levy to generate any additional property tax revenues. Simply adding the new development to the tax rolls would mean other taxpayers pay less for the city to reach its levy, Emanuel aides said. Any development would take years to complete, so new tax revenue would do nothing to solve CPS’ current fiscal crisis, they added.
