The group of graduate students came together to propose a workable solution to Chicago's burgeoning pension liability. April 05, 2024 The University of Chicago Harris School of Public Policy this week announced the winner of the inaugural Harris Policy Innovation Challenge, a competition which tasked students to devise innovative solutions to Chicago’s largest financial problem: $35 billion in unfunded pension liabilities, a shortfall that ranks among the largest in the nation. The winning team—which received an award of $10,000 and was chosen at a live pitch event on April 3 —was made up of graduate students Syed Ahmad, James Karsten, Liam Gluck, Greg Rudd, and Anthony Beaupre, and they were mentored by Jack Brofman, executive director for global treasury operations at UChicago. The team’s proposal to address Chicago’s pension crisis included: Deregulating marijuana licensing to expand the number of dispensaries and resulting tax revenue; Updating the process for vacant lot sales to increase transactions and taxes; Increasing police and firefighter employee contributions to 11.5%; and Adding a 75-cent toll to DuSable Lake Shore Drive. At the event, three finalist teams presented their proposals to a panel of finance and civic leaders, who chose the winner based on the novelty, efficacy, and political feasibility of their solutions. The judges were David Wells, the former CFO and VP of Financial Planning and Analysis at Netflix; Alexandra Holt, Executive VP for Finance and Administration at the Art Institute of Chicago; Andrea Sáenz, President and CEO of The Chicago Community Trust; Dominic Garcia, the Chief Pension Investment Strategist at CBRE Investment Management; and Abel Ochoa, the Executive Director of College Readiness at UChicago. “The judges and I were extremely impressed by the breadth of the team’s focus, the depth of their analysis, and the creativity of their thinking in tackling the city’s pension crisis,” said Research Professor Justin Marlowe, who led the competition and is the director of Harris’s Center for Municipal Finance. Simply put, these ideas – as well as others from our terrific group of finalists – are ones that policy makers should take seriously.” Launched in September, the Harris Policy Innovation Challenge challenged students to find novel and workable solutions to Chicago’s pension crisis, which is among the worst among U.S. cities. More than 50 graduate students from across the University of Chicago’s professional schools teamed up to participate in the challenge. Each team worked with a professional mentor to come up with a range of solutions bearing in mind labor, business, and investor perspectives. The winners incorporated a diverse range of policy proposals, recognizing the challenges of advancing the effort politically. “The advantage of taking a simplified view like this is it makes diagnosing root causes and solutions a lot more intuitive,” Ahmad said during the presentation, according to Pensions & Investments. “For example, problems in a pension fund must arise from one of three reasons: Either not enough money is being put in, it’s not growing fast enough or too much is being paid out. In the case of the city of Chicago, all three have been true at various points in time. And correspondingly, solutions are going to do one of three things. They’ll either generate revenue, improve returns, or decrease liabilities.” The winning team will present their proposals at an upcoming meeting of The Civic Federation’s Pension Committee, as well as at the upcoming Harris Policy Forum entitled “Fresh Insights On Pension Reform: Solutions for Chicago,” on April 11. Other concepts from the finalists included a proposal codifying annual advance payments, creating a new public safety tax collected alongside state income taxes, driving public awareness of the problem, instituting a new tax on services which are not currently taxed, and rebalancing the property tax system to make commercial property taxes relatively lower than their current rate to encourage more corporate relocation. Faculty Spotlight Justin Marlowe Research Professor Justin Marlowe is a Research Professor in the University of Chicago Harris School of Public Policy, where he also serves as Director of the Center for Municipal Finance. His research and teaching are focused on public finance, with emphasis on public capital markets, infrastructure finance, state an... Upcoming Events More events Coffee Chat in Austin, TX Mon., October 07, 2024 | 2:00 PM Cosmic Saltillo 1300 E 4th St Austin, TX 78702 United States Austin Prospective Student and Alumni Mixer Mon., October 07, 2024 | 6:00 PM The Grove Wine Bar & Kitchen Downtown 800 W 6th St #100 Austin, TX 78701 United States National Fair Chance Hiring Conference – Erasing Criminal Records: What’s New in Policy and Practice Tue., October 08, 2024 | 1:30 PM Chicago Urban League 4510 S Michigan Ave Chicago, IL 60653 United States