Ald. Ameya Pawar (47th) on Friday floated a plan to “public-tize” Chicago’s water system by selling or giving away shares to city residents and paying them dividends that would amount to universal basic income.
One of four candidates for city treasurer, Pawar likened the idea to the annual dividend that Alaska residents receive from the state’s embarrassment of oil riches.
“They have oil. We have 21 percent of the world’s fresh water . . . Rather than oil in Alaska being the driver for creating wealth, imagine if we . . . turned our water system into a truly public asset — a cooperative,” Pawar said.
Pawar described the idea as the opposite of the 75-year, $1.16 billion deal that Chicagoans love to hate that privatized the city’s parking meters.
“Privatization means giving an asset over to a private entity who gives us a chunk of dollars, then they make the money over the long term, like the parking meters,” Pawar said of the deal that will allow private investors to to recoup their entire $1.16 billion investment by 2021 with 62 years to go in the lease.
“Imagine if you public-tize the asset . . . Every Chicagoan could have a share in the water system. That could create a dividend for individual Chicagoans like stocks do on the market or those dividends could be reinvested in communities that need it the most.”
The cooperative arrangement would not stop Chicago from replacing its crumbling water and sewer system. But if the city spends up to $2 billion to replace lead service lines, the “dividends would be smaller,” he said.
Pawar has used his self-imposed, two-term limit as a Chicago aldermen to champion the cause of income inequality.
He plans to do the same on a broader scale if he’s elected city treasurer, therby becoming an ex-officio member of all four city employee pension funds.
During a wide-ranging interview with the Chicago Sun-Times, Pawar proposed using city employee pension funds and city investments to help solve the student loan crisis that hits close to home.
“I make $108,000-a-year as an alderman — and I’m not complaining . . . But 80 percent of my take home goes to pay for student loans and child care,” said Pawar, who has $200,000 in student loan debt that carries a 7 percent interest rate.
Here’s how Pawar’s proposal would work: The treasurer’s office would either launch a public bank or work with private banks, private investment funds and city employee pension funds to invest in student loans.
If the federal interest rate of 7 percent could be reduced to, say, 5 percent, the 2 percentage points savings would generate a “massive economic stimulus” in Chicago, he said.
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“Think about your home mortgage. Even a 1 percent reduction is a massive savings. Imagine a 1 or 2 percent reduction unleashing $300 or $400 a month-per student. What that means for small businesses. What that means for economic development in our communities. What that means from a tax perspective,” he said.
“And if you tie that to residency — if we say, `Move to Chicago. Stay in Chicago. We’ll refinance your student loans’ — you get new residents.”
Pressed to pinpoint the residency commitment, Pawar suggested “10 or 15 years or the term of the loan.”
He does not believe that is too much to ask, even though Chicago’s cold and snowy winters can be tough to endure.
“Big cities are growing. That’s where young people are going. Why not make an additional incentive for them to come to the city of Chicago?” he said.
Pawar made no apologies for proposals that would dramatically expand the relatively mundane investment portfolio of the city treasurer’s office to include social issues driving income inequality.
“It’s about going big. These are not normal times. We’re sort of in the new gilded age . . . You have a few people who have tremendous wealth and everyone else . . . The upper middle-class down to the working poor is in the everyone else business. We’re fighting each other over scraps,” he said.
Pawar said a public bank could also come in handy if and when recreational marijuana is legalized in Illinois.
“Currently, federal banks do not bank marijuana businesses. I believe a public bank could bank marijuana businesses and use the dollars generated from that to re-invest in communities that were ravaged by the racist war on drugs,” Pawar said.
Earlier this week, mayoral candidate Bill Daley floated the idea of a commuter tax to help ease a looming $1 billion spike in pension payment that will confront the new mayor and City Council.
Pawar said he’s all for the idea, but with a caveat: The tax should be imposed only on those suburbanites whose annual incomes top $100,000 or $150,000.