Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Capitol Comment

    Now He Must Govern

    02/24/2011

    No real surprises occurred during the Chicago mayor’s race, but the election was a landmark in the sense that the city elected a candidate who was not named Daley. It is hard to see any other way that this election was transformative; conservatives had virtually no chance of electing a mayor in a city which has been ruled by a single party since the Great Depression. Chicago voters were not faced with a decision of whether to elect a Democrat, but rather which Democrat to elect.

    Now that former-Chief of Staff Rahm Emanuel has been elected mayor, his first order of business will be to balance Chicago’s budget, currently suffering from a $654 million deficit. To put this in context, this is just $75 million less than the deficit of the entire state of Indiana in 2010. This runaway debt is not the result of low taxation—Chicago is tied with Los Angeles for the highest sales tax rate of all major American cities.

    Whether the new mayor will pursue policies to moderate draconian taxation remains to be seen, though his platform pledge is to lower, while also broadening, the sales tax and to focus on spending cuts rather than tax increases. Liberal pundits have already declared that “tax cuts aren’t an option” with the deficits that Chicago faces, but this does not take into account that the state and local governments will have to compete with neighboring governors who are looking to attract Illinois's businesses, especially as the state of Illinois recently passed a 66% increase on its corporate tax rate.

    Chicago has been one of America’s 10 largest cities since the Civil War and among the top three since 1890, and transforming from a grain port and meat-packing hub to a modern financial metropolis has given the city a 21st century economy. But it has also made the city's strategic location—accessible to the Midwest by land and the coast by water—less important. Chicago now has an economy based on businesses for which its government will have to compete. How should it compete? The new mayor could do worse than to look to neighboring governors for some ideas.