The coronavirus pandemic is wreaking gale force damage on Chicago’s municipal finances. It will be months before the city can even guess at the full wreckage and costs.
Given such utter uncertainty — and the likelihood that it will take a federal recovery effort on the scale of the Marshall Plan to put cities, states and the country back on their feet — we urge Mayor Lori Lightfoot to continue to lean into this fight. We support her determination to avoid layoffs and furloughs.
We frankly can’t understand the curious scolds, already shaking their fingers, who fail to understand that this is a crisis beyond the ability of any city to manage through the normal budgetary process.
A fully functioning local government is no luxury when a deadly virus is sweeping across the land, forcing Gov. J.B. Pritzker to issue a statewide stay-at-home order and the closings of thousands of businesses.
In Chicago and other towns, city services and city jobs are lifelines. To gut local government now would be to render it useless just when, in many ways, it is needed most. It would be austerity for the sake of austerity. A talking point for the no-taxation crowd.
And, honestly, does anybody really believe that trimming hours and jobs at, say, Streets and San would make a bit of difference in sparing Chicago from the financial reckoning that’s sure to come here . . . and in every city?
“We do not anticipate any of the draconian things … layoffs, furloughs and so forth. That’s a last resort.”
Consider instead the warnings of Laurence Msall, president of the Civic Federation, who is never shy in normal times to hammer City Hall for wasteful spending and taxes:
“The mayor’s focus that we save lives is absolutely the hugest priority,” Msall told us. “The economic impact of not saving those lives far exceeds [the value] of any [budget] savings. And you can’t imagine restarting the economy unless you get this virus under control.”
City government is a stimulus
Chicago government is more than a service provider, lawmaking entity and regulatory agency. With 30,000 workers — not even including the Chicago Transit Authority and the Park District — it’s also Chicago’s third largest employer. Only the Chicago Public Schools and local offices of the federal government employ more people.
City Hall also pulls in $10 billion a year in revenue — enough to place it on just below 300 on the Fortune 500 if governments were included on the list.
Every city, including Chicago, is a substantial economic player in a victorious response to COVID-19.
“What we need to be doing at this time is not shrinking government in terms of our place in the economy,” Lightfoot said the other day. “We need to be using government resources as a stimulus, if anything.”
She’s right. Substantial layoffs now at City Hall would take a monstrous financial bite out of the local economy at a time when we can afford it least. This is not a time to retrench. It is a time to push forward.
Local food banks, where requests are up, need more funding.
Children need the computers and other tech tools for remote learning.
Small businesses need loans and grants. Renters are feeling desperate.
This is how the “city that works” must work for now.
A rough and expensive road ahead
We fully appreciate that Chicago faces miles of increasingly rough financial terrain as revenues dry up from taxes on fuel, real estate transfers and sales.
The CTA is a case in point. The $1.57 billion agency announced last month that it is bracing to lose hundreds of millions of dollars this year, with ridership down 70 percent and no service cuts planned. Partially offsetting these losses, the CTA will receive a slice of $25 billion in transit funding provided under the $2 trillion federal coronavirus stimulus package.
By dint of a budget substantially larger than the CTA’s, and because property taxes remain a relatively stable revenue source, the mayor has more flexibility. Lightfoot is free to move large sums between departments, without City Council approval, under executive powers granted to her last month. The city also will receive a yet-to-be determined share of last month’s federal stimulus funds.
She also can tap special pots of city revenue set aside for large-scale water and sewer improvements and big-ticket construction at the airports. Sources outside of City Hall tell us there’s a minimum there of $500 million to $700 million.
The harder truth is that Chicago, like other local governments, will have no choice but to continue to look to Washington. The first federal stimulus package will be burned through quickly, here and across the country. Other trillion-dollar packages — something for which this editorial page has argued — will be needed.
Experts tell us Chicago alone conservatively will need at least another $1 billion.
A Marshall Plan and New Deal for America
Seventy-two years this month, President Harry Truman signed into law the $15 billion Marshall Plan, which rebuilt and stabilized a ravaged Europe after World War II. In April 1935, his predecessor, Franklin Delano Roosevelt, created the Works Progress Administration, a sweeping $5 billion component of the New Deal that lifted Chicago and the nation out of the Great Depression.
This is how our nation should be thinking now. About a national plan of recovery, lifting every city and state.
On Sunday, in part two of this editorial, we’ll talk more about that.
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