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The [Friday] Papers

Speaking of ConAgra . . .

"Illinois' flagship job program has awarded millions of dollars to companies that never hired an additional employee," the Tribune reports.

It's doled out millions more in tax breaks for corporations that eliminated jobs and became smaller.

And it's allowed companies to reap lucrative rewards and then relocate to other states without penalty or repayment.

Illinois cut these deals through a strategy dubbed EDGE - short for Economic Development for a Growing Economy - that was launched in 1999 by Gov. George Ryan as a way to create jobs and lure businesses from other states.

But what began as a modest number of tax breaks for a handful of companies has mushroomed into a billion-dollar giveaway rife with failure.

This isn't the first examination that has drawn that conclusion, though the Trib says it's the best. Consider:

In the first comprehensive analysis of 783 EDGE agreements, the Chicago Tribune found that two of every three businesses that completed the incentive program failed to maintain the number of employees they agreed to retain or hire.

State officials can't say how many jobs have been created through the job program; nor can they say how many jobs EDGE companies have eliminated. The Tribune, however, found that 79 current or former EDGE recipients have reported eliminating 23,369 jobs through layoffs and closures since entering the program.

As Jeb! Bush might say, it's free stuff for (rich) white people.

Officials have long pitched tax breaks as a competitive tool that bolsters the state's fragile economy, and the program has seen explosive growth as Illinois battles with other states to attract and retain businesses. Leaders of the EDGE program say it has been a lifeline for dozens of companies, helping to create new jobs and improve workplaces.

But the Tribune's analysis suggests that tax credits often do little to help companies expand or create sustainable jobs. A pattern of deals emerges in which businesses lobbied for maximum rewards and minimum requirements - and the state said yes.

In other words, it doesn't even help Illinois "compete" against other states in a race to the bottom. The losers are everyone who plays - or should I say, everyone who pays, which is you and I.

Incentives also carry a steep public cost. Every dollar awarded to a company is a dollar not collected to fund basic public services like education, transportation and health care.

Or, to put it another way:

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And just for good measure, while we're discussing taxpayer-supported spending priorities that place actual human lives below the comfort of the ultra-wealthy:

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"Illinois has earmarked more than $1 billion for EDGE credits, and companies have collected about $450.3 million so far, state records show. In the 2014 fiscal year, Illinois diverted a record $101.7 million in tax revenue from public programs back to the bottom line of businesses."

Sort of like the state's version of TIF districts. Call them BIFF districts.

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"Republican Gov. Bruce Rauner, who took office this year as a frequent critic of EDGE, has ordered the program to focus on creating jobs. But the Rauner administration expressed surprise at the Tribune's findings of widespread job losses and mounting costs."

And here's where the governor has pulled a double-switch. See, Rauner was elected based on his business experience finding "efficiencies" in struggling companies and either turning them around or shutting them down. Voters in the main, I'm confident in saying, expected Rauner to root out waste in state government and re-organize it more like a lean, mean business machine. For the most part he wasn't elected to hold the state budget hostage to a laundry list of unrelated items such as workman's comp "reform" that would hold businesses less accountable for maiming their workers.

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"Jim Schultz, director of the Department of Commerce and Economic Opportunity, which oversees EDGE, characterized dozens of the deals as 'very distasteful.

Schultz said the Tribune's analysis also underscores how state law and policies have served to obscure public disclosure and accountability.

For instance, the state discloses the overall value of tax credits each company is eligible to claim but not how much a company actually received, saying tax records are confidential. State law requires an annual status report for each participant, but only for the first five years of the 10-year deals.

"It doesn't make sense to me. I'm a taxpayer. We're all taxpayers," Schultz said. "We ought to be disclosing this information."

Jim, Principal Rauner will be seeing you in his office now.

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Rauner says he froze the EDGE program in June amidst budget stress, but that the ConAgra deal announced on Thursday was actually made before that. First, I'd like to see the proof of that. Second, too bad - the EDGE offers could have been rescinded. Why should their agreement be honored when agreements with, oh, say child care providers aren't?

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Go read the whole thing, there's a lot more there.

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Credibility Publicly Shredded
"Chicago Public Schools lowered four years of inflated high school graduation rates to account for a higher-than-advertised dropout rate, another blow to a district beset by financial and professional turmoil," the Tribune reports.

"The accuracy of the district's numbers had been called into question as early as January in a report by CPS' inspector general. But CPS officials did not announce the revised graduation rates until Thursday, months after Mayor Rahm Emanuel won re-election.

"Throughout the campaign, Emanuel repeatedly pointed to the district's improving graduation rates as proof that his often-controversial stewardship of one of the nation's largest public school systems was producing tangible results.

"This wasn't a one-year fluke, a statistical error," Emanuel said during an August 2014 breakfast with faith leaders.

That's one step from lying directly to God!

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Let us recall now Sun-Times reporter Lauren FitzPatrick on this subject in June:

"Emanuel and the CPS officials he appointed have a history of making bold claims that either can't be verified or turn out to be exaggerated to make them look better."

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Back to today's Trib:

"CPS CEO Forrest Claypool said Thursday that the district made a 'statistical error' and that a 'relatively minor modification' was needed to recalculate graduation rates.

"The graduation rate has been consistently rising," Claypool said. "This statistical error obviously reduces the rapidity of that rise, but the trend line is exactly the same."

Is it?

"The changes mean the 69.4 percent five-year graduation rate originally reported by CPS for the 2013-14 school year, often touted by Emanuel as a record high, dropped to 66.3 percent. The new formula drops graduation rates between the 2010-11 and 2013-14 school years an average of more than 2 percentage points."

If that stat was merely a "relatively minor" difference, the district wouldn't have juked it.

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"During his campaign, Emanuel often said what he characterized as his politically tough decisions - pushing for a longer school day, expanding kindergarten and closing schools - paid dividends in the form of improved education performance. And there's no statistic he cited more than the city's graduation rate.

"While Emanuel frequently mentions the projection that 80 percent of high school freshmen are on track to graduate, the graduation rate he pointed to during the campaign hovered at 69 percent, which Emanuel claimed was up from 58 percent when he took office, according to CPS numbers at the time.

"The district's new calculations also led to an adjustment of freshmen on-track numbers, which dipped between 2010-11 and 2013-14 based on the new methodology."

Whoa, possibly burying the lead here! The on-track numbers have been the subject of glowing reports - and mayoral spin:

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Back to the Trib:

"According to the district, the graduation rate has risen for much of the last decade with the exception of one year, 2008, when numbers slipped slightly. The improvement falls in line with an increase generally seen across the country."

Emphasis mine, for obvious reasons.

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"Graduation rates at Chicago Public Schools are at an all-time high, and have been trending upwards for the last four years," Emanuel spokeswoman Kelley Quinn said in a statement issued late Thursday.'

Here we go again: CPS GRADUATION RATES ARE NOT AT AN ALL-TIME HIGH.

"An April 2014 report from the Institute of Education Sciences, the U.S. Department of Education's research branch, found that the four-year graduation rate in the United States rose during the 2011-12 school year to a historical high of 80 percent, up from 79 percent in the 2010-11 school year.

"The admission by CPS that the numbers Emanuel frequently has lauded were inflated could hamper the mayor's messaging on the topic in the future . . . "

Um, what? I think what the Tribune means here is that the mayor could be seen as lacking credibility when talking about graduate rates in the future, which is incredibly silly given that A) the mayor's pattern of making shit up hasn't hurt him yet, and B) it hasn't hurt him because the media didn't make an issue of his credibility gap during the last mayoral campaign. Also, it's not as if the mayor's only been caught making shit up on this topic; it started during his first mayoral campaign. (Truthfully, it's gone on his whole political career, but once he decided to run for mayor the press corps came down with a huge case of journesia.) Finally, it's up to the media - like the Tribune! - to decide if it will "hamper" the mayor's messaging. The Trib acts like it's not part of the process here.

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By the way, four years of inflated graduation rates squares exactly with Emanuel's tenure.

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"[I]t's unclear what impact the changes in calculations may have on one of Emanuel's top campaign goals - to graduate 85 percent of CPS students by 2019."

It's not unclear at all: That goal will be harder to make, if even by a few percentage points.

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"On Thursday, district officials sought to downplay the issue.

"We're not saying that the distinction between the former methodology and the new approach is significant," said chief education officer Janice Jackson. "I mean, obviously it's an adjustment, but what really is important is that there's been tremendous growth over time."

From what I just read, there's been the same growth in Chicago as in the rest of the nation.

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Here's how WBEZ reported it:

"The official graduation numbers that Mayor Rahm Emanuel touted throughout his first term and his re-election campaign were wrong."

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From the BGA:

"Chicago Public Schools acknowledged Thursday that its graduation rate - heralded by Mayor Rahm Emanuel during his re-election campaign because the number of students finishing high school was reportedly rising - was overstated."

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The Beachwood Tip Line: The edge of tomorrow.



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Posted on October 2, 2015


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