Inclusive Economic Growth

Future Now Plan Susana A. Mendoza

Prioritize strategies that ensure investments and job creation

The Idea

Decades of discriminatory policies on the federal, state, and local level have created communities suffering from disenfranchisement and disinvestment with little opportunity to build long-term wealth and prosperity. According to a study from the University of Illinois at Chicago, inequality in Chicago has been growing over the past 40 years, and the number of concentrated areas where wealthy individuals live, especially on the North Side of the city, has quadrupled. Meanwhile, we continue to see the expansion of areas that are low-income with high poverty rates on the South and West sides of the city.

For the first time, Chicago is on firmer financial footing to tackle these issues. To ensure every neighborhood in the city thrives, especially those with high rates of poverty, Susana will prioritize strategies that ensure investments and job creation focus on these communities by leveraging the rapid downtown growth to bring more resources and investment to neighborhoods suffering from low opportunity.

1) Bring more investment to neighborhoods

Chicago’s greater downtown is one of the fastest growing urban cores in the United States. However, Susana recognizes that this prosperity has not been distributed equally throughout the city and will work to leverage our current growth to bring more investment to neighborhoods while connecting residents to jobs created downtown.

The Neighborhood Opportunity Fund (NOF) invests funds, paid by developers to obtain the rights to building denser projects in the downtown area, to support job creation in neighborhoods on the South and West sides of Chicago. Since its launch in 2017, the NOF has invested $11 million to support 90 businesses and drive $55 million in new neighborhood investment.

This program can be expanded by tapping some of the nearly $250 million in downtown TIF districts that are subject to the freeze put in place by Mayor Rahm Emanuel in 2014. These funds cannot be used elsewhere in the city due to an Illinois law that restricts TIF use to projects located within or adjacent to the districts where funds were generated. Susana will put her Springfield legislative expertise to work and fight to change this law so these funds can be used in the neighborhoods most in need of investment.

In 2017, the city issued a policy that encourages planned developments to hire minority- and women-owned contractors.

Susana will expand upon this policy by making it the law and widening its scope to include requirements to hire returning citizens or participants in violence reduction initiatives like READI.

Over the course of this decade, the city of Chicago made good progress on expanding capital sources for neighborhood businesses via initiatives like microlending and the SimpleGrowth platform for connecting businesses to lending programs.

Susana will double down on this priority by fully implementing the City Treasurer’s $100 million Catalyst Fund and identifying other pools of capital for neighborhood businesses.

To provide focused and sustained economic development planning for neighborhoods in need of more support, Susana will work with World Business Chicago and private partners to establish and support existing neighborhood organizations that will coordinate development strategies.

This work will include helping guide the use of citywide programs like the Neighborhood Opportunity Fund, Retail Thrive Zones, and other initiatives.

In 2017, the city of Chicago launched the manufacturing growth zone to streamline the process for new manufacturing businesses to acquire land, access workforce development programs, and take advantage of incentive programs.

There is still work to be done to fully implement the program, most notably in providing additional capacity building, equipment grants, management training, and coaches to help struggling manufacturers compete in the new economy. Susana will see this plan through fruition to ensure Chicago maintains a competitive manufacturing base.

Over the course of the last few years, the city’s planning department has worked with affected aldermen, businesses, and residents on rezoning the North Branch planned manufacturing district to allow residential and commercial uses. Due to changes in the surrounding neighborhoods, manufacturing is no longer the highest and best use of the land in this district, but the current zoning places strict limits on other types of economic activity.

As part of this effort, which would unlock hundreds of millions in value for the landowners, the city would include a fee structure to support infrastructure investments in the district and to invest in manufacturing districts elsewhere in Chicago. Susana will expand this to other manufacturing districts that are in need of a new vision with an eye towards capturing some of the unlocked value for investment in job creation and infrastructure.

The 2017 federal tax bill created a new tax credit that allows investors to partially shield capital gains from taxation, if they are reinvested into projects located in targeted low-income communities. Chicago’s planning department identified 133 census tracts for inclusion in the program.

Susana will develop a program – linked to the city’s other initiatives from its retail thrive zones to the Neighborhood Opportunity Fund and beyond – to take advantage of this tax credit.

2) Invest in Chicago’s young people and set them up for economic success

According to a report by the Great Cities Institute at the University of Illinois at Chicago, Chicago has a chronic and concentrated problem of youth joblessness. Stunningly, for Chicagoans aged 20 to 24, employment conditions were worse in 2015 than in 1960. They’ve also found that “recovery after the Great Recession has been slow or non-existent for many groups.”

Susana’s 50NEW Initiative will not only support students during the school year but will also take advantage of school spaces during the summers. For high school students, these community hubs can serve as job training centers to both give them the skills they need to find jobs and connect them to available work opportunities.

By some estimates, 65% of children entering elementary school now will be employed in a job that doesn’t exist yet.

Susana will help to prepare our young people for a changing world by focusing on training them in expanding industries like green manufacturing and data security.

3) Create a fair student lending fund accountable to residents

Over the past decade, we have learned how banks can design products like mortgages and student loans to favor profits over people and set working families back for decades, if not their entire lives. Today, more than 15% of the homes in the Chicago metro area remain on underwater mortgages while the average Illinois college graduate enters the workforce with nearly $30,000 in student loan debt. Susana will take an important step in expanding access to fair lending practices by creating a fair lending fund capitalized by the city’s own deposits.

In exchange for relief from exorbitant interest rates on their student loans, Chicago residents will be able to access subsidized student loan refinancing. By putting taxpayer money to work for the betterment of the city, Chicago will also gain a major competitive advantage in attracting and retaining young talent that is critical to maintaining a vibrant city.

4) Strengthen our working families

After decades of assaults on fundamental workers’ rights, workers have been losing their leverage in fighting for fairer wages and good benefits. Moreover, even as national and state unemployment rates continue to drop, worker wages have stagnated.

Coupled with the rising cost of housing, student loans, and other basic costs of living, this means that middle- and low-income households are increasingly squeezed and are struggling to keep up. Our state and local governments have a role to play in leveling the playing field for workers by passing important protections into law and developing initiatives that boost worker incomes.

In 2011, the city of Chicago passed new penalties for wage theft, raised the minimum wage, required paid sick leave for all workers, and made it easier for airport ground workers to unionize. These protections have been enforced by a handful of attorneys in the city’s Department of Business Affairs and Consumer Protection.

In fall 2018, the City Council passed an ordinance establishing a dedicated Office of Labor Standards focused on enforcing these protections. Susana will ensure that this office is fully up and running by the beginning of 2020.

The city of Chicago boosted the incomes of more than 400,000 workers when it passed an ordinance establishing a $13 minimum wage by 2019.

Susana believes this was an important first step, but we must do more. She will advocate for a statewide minimum wage increase to ensure that Chicago does not remain an island while also advocating to increase the city’s minimum wage to $15 in the years to come.

The city of Chicago’s free tax preparation service serves more than 20,000 taxpayers each year, helping them earn millions in EITC refunds.

Susana will continue to expand the program and support linking services to more places to reach working families, including places of employment, public libraries, and other targeted locations.

Federal and state earned income tax credit programs have been some of the most successful anti-poverty programs in the United States. In 2016, the EITC lifted about 5.8 million people out of poverty, including about 3 million children. However, big cities like Chicago have higher costs of living than smaller municipalities, which reduces the impact of EITC compared to other parts of the state.

Other cities like New York City already offer residents a fully refundable earned income tax credit, matching 5% of the federal EITC. Susana will explore strategies to implement a new Chicago EITC to supplement paychecks for working families. Susana will also work with leaders in Springfield to expand the EITC at the state level.

5) Reform fees and fines that hit low-income residents the hardest

The daily fees and fines imposed by the City of Chicago’s Department of Revenue disproportionately hit low-income residents and communities of color. According to a recent ProPublica investigation, the number of Chapter 13 bankruptcies that include city ticket debt grew from 1,000 in 2007 to more than 10,000 in 2017. This debt hits African American neighborhoods the hardest.

During her time as City Clerk, Susana oversaw the first overhaul of Chicago’s city sticker program since 1908. By ending the archaic system of only issuing city stickers during the month of June, Susana helped ensure that there were shorter lines, faster turnaround, and less stress for everyone, especially those who previously had to take a day or two off from work just to get their sticker, losing valuable wages in the process. As City Clerk, she fought against increases in the price of city stickers and has criticized how the city’s Department of Revenue has enforced city sticker penalties in a way that unfairly hits predominately African-American neighborhoods the hardest.

As mayor, Susana will launch a top to bottom review of city fines and penalties and make reforms to reduce penalties, reduce the rate at which penalties escalate, allow for amnesties where appropriate, and limit instances where license suspension is used in these cases. Susana will also explore ways to use technology to build in leniency where it makes sense, so that Chicagoans can be warned about potential violations and won’t see continuous repeat tickets for the same violation, forcing some residents into bankruptcy.

Susana will implement a comprehensive set of reforms, which will be possible given the technology overhaul she implemented as City Clerk. Those reforms would include:

It’s clear that under the current system, city tickets can too quickly become debt spirals that compound and make it impossible for someone living paycheck-to-paycheck to pay off. There have been strong proposals for a cap on late fees, including Alderman Gilbert Villegas’ proposed ordinance that includes a cap on late penalties at 10 percent, rather than allowing tickets to double.

Susana would support a cap that ensures fines don’t escalate rapidly, making repayment unattainable for those who barely have the means to pay the ticket in the first place.

ProPublica and WBEZ found that, over the past decade, the city had issued close to 20,000 duplicate citations to vehicles without the required city sticker. Some were even issued on the same day, in violation of city ordinance. Susana will dismiss all duplicate tickets that were wrongly issued and remain on the books, so that drivers won’t have to worry about consequences for tickets that shouldn’t have been issued in the first place.

Susana will also work to create an integrated technological system that allows enforcement to see when tickets are issued and for what offenses, so that there will not be tickets issued in rapid succession for the same violation.

Under current policy, entering into a monthly payment plan requires a $1,000 down payment just to sign up, essentially rendering the payment plan option useless. That barrier to entry needs to be reduced so that more people can access the payment plan system. Payment plans should also be readily accessible online–whether it’s for purchasing a city sticker in the first place or for making an uncontested online payment of a fine.

Finally, citizens should have alternate payment options like community service for when the debt burden rises to an insurmountable level based on income.

In addition to taking tickets that were wrongly written off the books, there needs to be a program that reexamines tickets that were issued during this period of harsh enforcement. By instituting a program for limited amnesties and debt forgiveness, the city can make debt manageable to a point where they might actually see some repayment.

While the Finance Committee approved a measure to eliminate debt for those who file Chapter 7 bankruptcy, the measure did not go far enough. Chicago should consider eliminating long-standing debt for all drivers, not just those who file for bankruptcy.

Susana will also work in Springfield to pass a statute of limitations for ticket debt to bring Illinois in line with other states around the country.

In California and some other states, jurisdictions issue so-called “fix-it tickets,” which allow a violator to correct their violation, send proof of their correction and then only be required to pay a much smaller fee. For registration violations (failure to buy a city sticker, driver’s license violations, registration expiration) or mechanical violations like a broken tail light, giving citizens the option to correct their violation will prevent situations where someone’s driving record is permanently affected by a fixable issue.

Chicago should adopt similar policies that give violators some leniency, while still ensuring eventual compliance.

6) Move towards universal childcare

As a hard-working mom with a six-year-old son, Susana knows how hard it is for parents in Chicago to find a way to pick up their children at 3:15 pm. She also knows working families across the income spectrum face this same struggle to find affordable, quality child care.

Susana will focus on meeting this need and develop tools to support the expansion of childcare options throughout Chicago. These initiatives will include:

Illinois state law allows for TIF funds to be used to support child care for families in need, but the city has no structured program to take advantage of this authority.

Susana will task the City’s Department of Family and Support Services to come up with a plan to build out child care programs for families that most need it.

In addition to utilizing TIF to expand child care options, Susana will direct the city’s planning department to develop a set of incentives to reduce start up costs for new child care centers in areas of need. These incentives can include expedited permits and inspections, reduced cost sale or leasing of public land and buildings, and reduced city fees.