Mayor Lori Lightfoot laid out her case Wednesday for a $12.8 billion spending plan, casting the tax-hike-laden proposal as a road map into a post-pandemic future that gives Chicagoans from all backgrounds a shot at security and success.
Leaning heavily on the imagery of the Great Chicago Fire that mayors have long invoked when they want to play to the city’s self-image as a tough, resilient metropolis that embraces challenges, Lightfoot compared today’s crisis to the labor unrest and cultural foment in the years after that defining 19th-century catastrophe that set the stage for the modern city.
“The lessons I take from that history are many. Importantly, as Chicagoans, throughout our history we have been tested and we have repeatedly risen to meet and exceed every challenge,” Lightfoot said to a handful of staffers in an otherwise empty City Council chambers. “But what I also know, as a woman of color, is that this time, in 2020, as we rebuild, we must continue to bring others along with us on the journey toward the next chapter in our shared destiny. We cannot afford to leave anyone behind.”
As first reported in the Tribune, Lightfoot’s approach to closing a projected $1.2 billion hole relies on a 3-cent gas tax hike and a $94 million property tax increase. It also includes a provision to raise property taxes annually thereafter by an amount tied to the consumer price index. That could prove agreeable to aldermen, who wouldn’t have to take as many deeply unpopular votes on such increases.
In addition, Lightfoot is asking to refinance $501 million in city debt, which would provide a jolt of new revenue next year, but likely cost taxpayers more down the road. Similar borrowing tactics under Mayors Richard M. Daley and Rahm Emanuel drew deep criticism, but the Lightfoot administration said the city’s current financial disaster makes such a move appropriate.
In her speech Lightfoot prevailed upon residents to do their part, while proposing layoffs for city workers and eliminating hundreds of unfilled Police Department positions.
“During this horrible pandemic, every time that we have shown strength as a city is when we have worked together as partners, making shared sacrifices and facing the challenges head-on, together,” she said.
The proposal was met with skepticism by some of the aldermen who will spend the next several weeks holding hearings on its particulars.
“I have concerns about the borrowing, as well as the cuts, what they’ll mean for services,” said West Side Ald. Jason Ervin, 28th, who chairs the council’s Black Caucus. “Without question, we need greater investments in violence prevention. We’re facing a difficult situation, but we need to be able to walk and chew gum at the same time.”
Emanuel, Lightfoot’s predecessor, persuaded aldermen to approve a series of property tax hikes, plus water and sewer tax increases, a new garbage hauling fee, 911 phone tax hike, vehicle sticker fee increase and a tax on cable television.
On Wednesday, Lightfoot tried to head off opposition to the property tax hike and spending plan, calling it a “modest” increase and arguing that she’s taken other measures to reduce the hit on taxpayers.
“Some had predicted that this budget would be predicated on hundreds of millions of new property tax dollars. Not so,” Lightfoot said. “And for the average Chicago home valued at $250,000, you will pay just 56 additional dollars for the whole year. That’s right, just 56 new dollars per year.”
Whether aldermen whose constituents’ finances have been walloped by the pandemic-fueled economic downturn agree with the mayor remains to be seen.
In a lengthy speech, Lightfoot said her spending plan relies on $501 million in refinancing city debt to help close the 2021 budget deficit and $448 million to help close 2020’s shortfall.
Mayoral critic Ald. Anthony Beale, 9th, said the refinancing is akin to “kicking the barrel down the road.”
“How can she say she’s making tough choices?” Beale asked. “We don’t know how long this pandemic is going to last. This looks like smoke and mirrors.”
But Ald. Scott Waguespack, 32nd, chair of the council Finance Committee, said the refinancing plan is a better idea than digging deeper into the city’s reserves, an alternative some aldermen prefer but that he said would hurt the city’s standing with credit rating agencies.
“It is warranted in this calamity, a once-in-a-century pandemic,” Waguespack said.
Lightfoot also said the city could fire up to 350 city workers as a cost-savings measure, though she promised to delay layoff notices until March to give the federal government a chance to agree on a municipal relief package.
In addition to a gas tax hike, her budget plan also includes the installation of 750 parking meters in all zones. Lightfoot’s budget includes an increase to the city’s “cloud” tax, which will hike the lease tax on certain computer software to 9%.
The mayor’s plan also will ask Chicago Public Schools to reimburse the city for $40 million more in school pension contributions the city makes. Lightfoot made a similar move last year and was criticized for what some said was a cost shift onto CPS to balance the city’s budget.
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The city will take 1,921 vacant positions off the books, but nearly 900 of those are crossing guards who will be shifted to CPS’ payroll.
In a message to city employees early Wednesday, Lightfoot said all nonunion city workers, including her, will take five unpaid furlough days. That’s expected to save $15.3 million in 2021.
Lightfoot’s budget plan also proposes creating a new City Council Committee on Immigrant and Refugee Rights with an annual budget of $111,500. The city Budget Office said the new committee would not increase spending because it replaces a special committee on the U.S. census that is being dissolved.
Veering from her prepared remarks, Lightfoot called on federal lawmakers to help Chicago and other big cities with their coronavirus pandemic-fueled budget woes. If the city gets enough federal aid, Lightfoot said, the city will make “any appropriate pivots” against job cuts.
“Congress, do your job,” Lightfoot said. “Don’t leave us, cities and towns all across this country, high and dry.”
To close the deficit, the city also is counting on $263 million in “improved fiscal management,” a broad term that includes a variety of activities such as improved collection practices.
Some of Lightfoot’s measures may be criticized as being short-term one-time fixes. The city’s taking $30 million out of its rainy day fund, for instance, which will always be criticized by some as too little.
By refinancing its debts then using the money to shore up finances in the short term, Lightfoot is also likely to be criticized for relying on one-time fixes and using much of the savings in the short term.
Under Lightfoot’s refinancing plan, debt payment would be extended another three years, pushing out payments through 2050. And after the initial savings of the first two years, annual payments on the debt for all but a few of the next 29 will be higher than they would have been.
Lightfoot’s budget package likely will be the stiffest test the mayor has faced in trying to whip votes in the increasingly restive council. While she hasn’t lost a major vote yet, the 39-11 margin of her 2020 budget was fairly tight for a relatively painless spending plan.
Last year, many of the votes against Lightfoot’s spending plan came from progressive aldermen who said she didn’t do enough to increase funding for mental health services or to make corporations pay more toward the city’s bottom line.
This year, Lightfoot is proposing the city spend an additional $5.25 million on funding for community-based violence prevention groups, which she’s been criticized for not supporting with more money.
The city also would spend $2 million on affordable housing funding and $8 million on economic recovery programs to support workforce training, help small businesses and spur job creation, according to her plan.
Far North Side Ald. Maria Hadden, 49th, acknowledged Lightfoot’s argument about the “modest” property tax increase but said it would hurt many residents who live in apartment buildings in her ward. About 70% of her ward’s residents are renters, she said.
“I’ve got some concerns about the property tax and the gas tax, in particular, thinking of so many of the folks who live here who would really be hit by these things,” Hadden said.
She also said she wants to “dig in a little bit more over these next couple of weeks to see where we can maybe make some more cuts or maybe we can dip in to a little beyond $30 million out of our reserves to make up a little bit of that.”
Lightfoot also used a chunk of her address to argue strenuously against defunding police. She choked up as she recalled an officer’s unsuccessful attempts to save a 7-year old girl who had been shot in the head, which she cited as an example of public service by city cops.
“Our police officers are not our enemies. They are someone’s son or daughter, or husband or wife, brother or sister. They are as complicated and imperfect as all of us,” Lightfoot said. “But do remember, they are our neighbors and an important part of who we are as Chicagoans.”
Democratic socialist Ald. Rossana Rodriguez Sanchez, 33rd, said she was disappointed to hear about layoffs and furloughs and felt as if Lightfoot brushed off residents who want to defund police.
“One of my main concerns is the amount of money that we continue to spend on the police,” Sanchez said. “I was a little disappointed with the way in which she sort of cleaned up the institution to present it in the budget of continuing to spend the amount of money and resources we’re spending on it when we know how hard it is to keep them accountable.”
Chicago Tribune’s Hal Dardick contributed.
