Chicago is known for its deep dish pizza, skyscrapers, and lively sports scene. Unfortunately, it’s also known for high crime, fiscal woes, and political dysfunction. Other major cities have reformed their political system over time, but not Chicago. The city remains stuck with an outdated political model where the mayor is essentially king, making it harder to address long-term problems. Austin Berg, who has co-authored a book about this that explains how Chicago can finally break free from its past, explains what’s going on.
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Daniel Davis: I’m joined now by Austin Berg. He is the vice president of marketing for the Illinois Policy Institute and co-author of the book “The New Chicago Way: Lessons from Other Big Cities.” Austin, thanks for your time today.
Austin Berg: Thank you. Appreciate it.
Davis: I want to talk to you about Chicago. It’s a great American city in so many ways. In fact, as someone who lived myself in the Chicagoland area during college, some of my fondest memories are from eating deep dish and going to Cubs games and the Jazz Festival.
But as you point out in your book, this is a city with deep, deep problems, from crime to mismanagement of finances and underperforming schools. You argue in the book that these problems are symptoms of a deeper political problem.
Explain the political culture of Chicago, if you can briefly, and how that lends itself to these other dysfunctions.
Berg: Sure. So the book is a very simple thesis and it’s what you said, which is that Chicago has conspicuous problems and we see that in schools, we see that in finances, we see it in crime, and we believe that the cause of those really conspicuous problems has been poor decision-making over decades.
We believe that the poor decisions have been made as a result of the structure of city government. It’s not due to the mythical Chicago Democratic machine, although that’s played a part. It’s not due to any one mayor. It’s not due to anyone daily, any one manual. It’s due to a very outdated, anachronistic form of city government that has all but disappeared from the United States but remains in play in Chicago.
The form I’m speaking of is an extraordinarily mayor-centric form of urban governance. So the mayor in Chicago calls the shots. The mayor runs City Council, the mayor runs the schools, the mayor runs CTA [Chicago Transit Authority], the mayor runs the largest convention center in the country.
As we know, as people who care about the Constitution, you need to have separation of powers to have effective governance and make good decisions. Unfortunately, Chicago remains mired in this early 1900s form of city government.
Davis: So how does that structure of government make for poor decision-making and bad policy?
Berg: That’s a great question. So one example, a great example, is our legislative branch, which is Chicago City Council. It’s made up of 50 aldermen, which is insane for any major city to have that many people. You have each alderman representing 50,000 people.
The mayor calls all the shots on citywide policy and you would expect the legislative branch to serve as a check on the executive. The problem is we do not have a legislative body full of legislators. We have a legislative body full of mini kings of mini fiefdoms under the ward system.
So aldermen in Chicago have very little or are very poorly educated and have very little concern with any issues of citywide importance, like crime or finances. They care only about the parochial interests in their ward: Who’s getting a pothole filled? Who’s getting a tree cut down? Whose signage [do] I need to approve for every small business awning, sidewalk cafe permit?
These ombudsman-like duties fill the entire plate of every alderman in Chicago. So they get rolled every time by the mayor.
The mayor literally presides over City Council. They have no president. So we talk, throughout the book, in each chapter about these absurd decisions made on the whim of the mayor because the City Council is not equipped to be an effective check.
A very famous one, Meigs Field, one of the most famous single-runway airports in the world, was bulldozed over a single night because the mayor wanted to make that land a park.
This is in downtown Chicago. This was a mess. This was an economic jewel of the city that people could fly in directly to downtown Chicago and not to have to go out to O’Hare or Midway. On a whim, the mayor said, “No thanks.”
There [were] no consequences whatsoever for that. No City Council members stood up. Imagine that decision and then play that out across 30, 40, 50, 60 years. You’re going to end up with very, very severe problems in a city.
Davis: Right. Well, one of the many problems that’s been talked about is the chronic issue of crime. Recently, President [Donald] Trump was speaking in Chicago on this. I think he said that Afghanistan is safer than Chicago. I don’t know if you can verify the truth of that.
Berg: It’s false.
Davis: It’s false. OK. Well, it certainly got the point across that the crime has gotten horribly out of hand. How did it get so bad?
Berg: Policing is a very, very interesting topic in Chicago. So what we talk about in the book is the reputation of the Los Angeles Police Department, following Rodney King and O.J. [Simpson], was every bit as poor as [the] Chicago Police Department’s reputation is now following the Laquan McDonald killing in 2016.
The way LA was able to get out of that was through very deliberate governance changes in how policing works. So in LA, there is a state law in California called the Peace Officers Bill of Rights and it determines what people are allowed to bargain over, what the policing is allowed to bargain over in LA. They can bargain over pay and benefits.
The problem in Chicago is that over the last hundred years, the police union has been able to bargain with the mayor over everything under the sun. So there would be deals made like, “We’ll hold the line at 2% raises per year, but you’re going to get 24 hours of cool off time after you discharge your weapon at somebody.” LA fixed that.
At every police-involved shooting, the inspector general is there speaking with people on the scene. The crime rate is incredibly low; a fraction of Chicago’s, the homicide rate.
The mayor has very limited involvement in policing in Los Angeles, whereas policing is political in Chicago. The mayor decides who the police chief is. It’s a very political process and that both inspires distrust among rank-and-file police officers and also among the communities that are being policed because they don’t feel like justice is being served.
People talk about the homicide rate in Chicago a lot. The homicide clearance rate, so the people caught after shooting someone and killing someone, is less than 20%.
So you have swaths of the city that are completely devoid of justice and it’s because of a total breakdown in trust between the police department and the communities that they’re policing. We think that governance reform should be a big part of fixing that.
Davis: Would that have to come directly from the mayor, since the mayor is basically the king of the city?
Berg: It would have to come from a collaboration between state government really and the city. Because, as we said in California, a major part of that collective bargaining reform comes from the state level.
As you may know, living in Illinois, the state government is dominated by Chicago interests. The Senate president, the Illinois House speaker, and now the governor are all Chicago Democrats. So they need to be on board with any kind of reform if anything’s going to get better in Chicago.
Davis: Another concern in the city is the fiscal situation. Illinois itself has gotten [into] a horrible fiscal situation and that’s true of Chicago as well. You note in the book that the city hasn’t passed a balanced budget in 11 years. I guess it’s 12 years now since then. So what’s the cause of the mismanagement? Where’s the money going?
Berg: That’s a great question. So Chicagoans, from the city and its sister governments like the CTA and Chicago Public Schools, hold $42 billion in pension debt. That’s more than 44 of the 50 states. That’s a city.
We talk a lot about the structural causes of that in the book. So we looked at what we called fiscal firewalls across the top 15 cities in the U.S. Throughout the book, all of our recommendations come from other major cities, democratically-controlled often, and union-dominated towns. These are not radical right-wing ideas. They’re very nonpartisan.
So we looked at these three fiscal firewalls across the 15 largest cities by population. They are, one, an independently elected controller or CFO role that provides independent oversight of the budgeting process, a city council that has robust involvement in the budget, and voter approval of tax hikes and new debt. Chicago is the only major city among the top 15 that has none of those three.
One of the most powerful ones I was just talking [about] today with the mayor of Colorado Springs. In Colorado, they have a taxpayer bill of rights where every new tax hike and every piece of new debt needs to be voted on and approved and sold by city leaders to voters to say, “Hey, we need this.”
That’s the norm. Twelve of the 15 largest cities in the U.S. have to go hat-in-hand to voters when they want a new project or want to issue debt for something and say, “Hey, do you guys think this is necessary or not?”
Chicago has never had that. Chicago not only hasn’t ever had that, it’s also had a mayor that’s determined every single budget and it’s had no independent oversight of the budgeting process.
The only two other citywide elected officials we have are called the treasurer and the clerk, and you could ask a hundred Chicagoans what those people do and 99 of them would have no clue. “One of them gives out your vehicle stickers,” that’s what they’d say, and, “I don’t know which one it is.”
So again, if you have that form of governance decade after decade with no sorts of checks, you’re going to end up with one of the most heavily indebted cities in the country.
Davis: Well, in terms of dealing with the pure amount of debt, when you look to other cities, are there examples of successfully digging out of debt to solvency?
Berg: Definitely. One of our mentors in the book-writing process was really the fiscal savior of New York City, a man named Dick Ravitch. We talk a little bit, we actually talk a lot in the book, about the need for what’s called the city charter, the city constitution that distributes power intelligently across different branches of government, deals with the ins and outs of everything about city government.
Chicago is the largest city by far that has no real city charter. New York City, which was on the brink of fiscal collapse, on the brink of bankruptcy, dug itself out of that, is the only city to use what’s called general accepted accounting principles, which are the gold standard and how you should talk about your city budget numbers.
They completely reformed that, and in 1989 had a massive charter revision process, which is one of the biggest governance successes in our lifetimes in America, in my opinion, and isn’t talked about enough. Distributed power intelligently with budgeting among the mayor’s office, the City Council, and other players, and it’s been a huge help.
By no means is New York City a gleaming city on the hill when it comes to its finances, but it is so much better than it was in the ’70s. It’s because of these sorts of governance changes.
Davis: When you mentioned the pension crisis in Chicago, is there a way out of that other than breaking pension promises?
Berg: I thought you were going to say the other B word, which is bankruptcy, which would involve breaking pension promises.
Yeah, these promises were made. The real Chicago way of finances was [to] give public sector unions enough so that they don’t strike, keep taxes low enough so that politicians are protected, and then borrow the difference.
So we end up in a massive sinkhole of debt, and instead of spending money on city services that people value, you are paying for yesterday’s government in the form of pensions and health care obligations.
So it’s really, really difficult to see a way out of the pension debt problem. The only way to get out is to reform the Illinois Constitution to allow for benefit changes.
So right now, a person who was hired 30 years ago, the promise of their pension growing by 3% every single year on Day One of their employment cannot be altered under the Illinois Constitution. The Supreme Court has ruled that. It’s really a suicide pact with taxpayers. So you have to amend the Constitution to allow for some reasonable benefit changes because you can’t tax your way out of it. It would be insane.
Davis: Well, the state is completely run by Democrats. Are any Democrats coming to terms with this just based on math and objective obligations?
Berg: The problem in Illinois is that it’s been a bipartisan game for 30 years. The pension ramp was essentially back-loaded. Former Gov. Jim Edgar at the state level said, “Guys, don’t worry. It’s not a problem. Our payments are going to be really low for the next 10 years,” and then didn’t mention that 20 years after that, it would be ramped up exponentially every single year and blow a hole in every single budget.
Even that 3% benefit increase was signed by a Republican governor, Jim Thompson, in the ’80s.
The difference between Chicago, which is Illinois and Chicago in general, which is definitely dominated by the Democratic Party, completely head-in-the-sand on the pension issue, [is they] refuse to say anything because public-sector unions are the biggest source of money for their party.
In a state like New Jersey, [with] pension problems as severe as Illinois, you see the Senate president, a Democrat union member, touring the state saying, “Guys, the money’s not there. We need to start bargaining now or we’re all going to get huge haircuts on our pensions.”
Gov. [J.B.] Pritzker has not lifted a finger at all on the pension issue and it’s the biggest public policy issue facing the state because it dominates where all the money goes.
Davis: Yeah. Well, Chicago is also notoriously corrupt. It’s been that way for decades. I don’t think we need to expound on that. What kind of checks can be put in place to fight corruption? Would that be more inspectors general? More accountability offices? More whistleblower protections?
Berg: That’s a great question. So one of the misconceptions, I think, about Chicago is that it is the most corrupt city. So we actually looked at this data in the book across the 15 largest cities, and the way you analyze it is by the associated federal judicial district that covers the city. Per capita, over the last 10 years, Chicago is middle of the pack on public corruption convictions among the 15 largest cities.
Now, where Chicago is very extreme is the number of City Council members who have gone to jail. Since the 1970s, 34 Chicago aldermen had been imprisoned for corruption. Thirty-four. I said that in a panel today and people laughed, like it was a laugh line. That points to the structural problem.
Davis: And two governors over the past 10 years.
Berg: Yes. At the city level though, that’s symptomatic of the nature of power of aldermen. So a very brief example: A developer on the South Side was given city money to build housing this year. In the line items to be reimbursed by the city for their expenses was a donation to the alderman.
Alderman control, if anything is rezoned in your ward, you need the alderman’s approval. If you are a small business owner, you depend on at least the ambivalence of this elected official in order to do the most basic operations of your business. Of course, that administrative bottlenecking authority breeds corruption.
You could have all the transparency in the world about who’s getting money, what projects are being clouded through the process, it won’t matter until that power is taken away from aldermen to serve that bottleneck role. You won’t fix the corruption problem in the city until you fix that.
Davis: Given the entrenched power structure that you talked about, the mayor really being king of the city, what’s the way out of that? What’s the way toward reform if these kinds of things, if reforms generally come from the mayor?
Berg: It has to come from grassroots. Part of the reason we wrote the book is that there hasn’t really been a vocabulary for governance reform. It’s all been people-based. Throw the bums out, getting the new bums in, and we’re supposed to expect reform out of that.
But if people aren’t educated on why city government is so flawed, and that the fact that it’s not because of these characters that we construct out of our political leaders, it’s because of very deep problems, it won’t change until people understand that.
So the biggest ask we have in the book is a city charter and voters need to approve it. It’s a radical concept, the idea that voters should approve the form of government that they live under. But New York, as we said, in 1989 and Los Angeles in 1999 had extraordinarily successful charter revisions that have set those cities up.
Both the cities have conspicuous problems, but those charters have set them up for success in dealing with them and making proper decisions to deal with them.
The next crisis in Chicago, people are not properly equipped to deal with it and they won’t be until that charter is approved by voters. So the next mayor, the City Council, the governor all need to be rowing in the same direction on a charter.
Davis: Well, we’ve talked about Chicago, and we could talk about Illinois but we don’t have the time. But I understand you’ve produced a documentary about the most powerful man in Illinois politics, who is not the governor. If you can give just a minute synopsis of who he is and what the documentary is about.
Berg: Definitely. His name is Mike Madigan, and not only is he the most powerful state politician in Illinois, I have researched this a lot, he is the most powerful state politician in the nation of the last 100 years, bar none.
So Madigan has been the speaker of the Illinois House of Representatives for 34 of the last 36 years. He’s been in the General Assembly since 1971. Every piece of legislation, just as we were talking about a mayor-centric form of governance at the city level, there is autocratic, one-man rule at the state level in Illinois for the last three decades. That man’s name is Mike Madigan.
So we produced that Illinois policy, a documentary on him, feature length, was shown in theaters across the state, generated tremendous media attention around him. It’s called “Madigan: Power. Privilege. Politics.” If you want to watch it, you can go to michaelmadigan.com.
Davis: Michaelmadigan.com. Well, the book is called “The New Chicago Way: Lessons from Other Big Cities.” Austin Berg, thanks for your time today.
Berg: Thank you very much.