City’s share of stimulus package: $572 million

The CTA will get $800 million and Chicago Public Schools another $205 million. But it won’t be nearly enough, Mayor Lori Lightfoot said Thursday.

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Chicago City Hall, with the Board of Trade building in the background.

The $566 million the city is expected to receive from the federal stimulus bill won’t be enough, city officials said Thursday.

Sun-Times file

Chicago expects to receive at least $572 million from the federal stimulus plan, but the massive infusion won’t be enough to cover declining revenues and rising costs tied to the coronavirus — in part, because the city has already spent $100 million.

In a memo released Thursday followed by a conference call with reporters, Mayor Lori Lightfoot and her financial team said there is “no way to know what the full extent of the financial impact will be on our residents, our city and our budget” because nobody knows when the pandemic will end.

But the memo states that it is “highly probable that additional federal resources will be needed to continue to combat the virus and address the economic toll” it will have on Chicago.

That’s saying something, considering the avalanche of federal money already on the way. It includes $572 million for the city budget in several buckets:

• $470 million in “flexible funding to pay expenses related to the city’s emergency response to the pandemic. That includes police and fire overtime.

• $46.7 million in Community Development Block Grant funding to assist Chicago neighborhoods with a range of services for senior citizens and the homeless. Another $2 million will be distributed to state and local government based on the “prevalence of” people who test positive and the “related economic and housing disruption,” the memo states.

• $23.7 million in Emergency Solution Grants to address the pandemic’s impact on the city’s homeless population.

• $1.5 million earmarked for Housing Opportunities for Persons with AIDS.

• $15 million in Community Services Block Grants specifically earmarked for communities facing increased unemployment and economic disruption ties to the virus.

• $6.8 million in Coronavirus Emergency Supplemental Funding grants from the U.S. Department of Justice. This money covers “preventing, preparing for and responding to” the coronavirus.

• $9.7 million in CDC grants for public health emergency preparedness.

In addition to the city money, the CTA is expected to receive an $800 million infusion to cover operating costs during the pandemic at a time when ridership has plunged by at least 80% on rail and 70% on buses.

Chicago Public Schools will receive $205 million from the $2 trillion federal stimulus bill.

Lightfoot has vowed to be “straightforward and very transparent” with Chicagoans if and when she concludes tax increases are needed to cover declining revenues and rising costs tied to the coronavirus.

During Thursday’s conference call, the mayor once again ruled out layoffs, furlough and program cuts in this extraordinary time of need. She argued that city government “has to be part of the stimulus package.”

“For us to put people on the unemployment rolls — for us to retract and not be a partner with residents and businesses in trying to get them through this difficult time so they’re better situated to come out of this with minimized harm — that doesn’t make sense to us,” she said.

“If we shrink and then put people on the streets, we’re gonna exacerbate an already difficult time. We think that’s exactly the wrong strategy. So we’re gonna continue to look at ways that city government — obviously within our means — can serve as a small stimulus.”

As for the impact on city revenues, Lightfoot said the situation is too fluid to gauge, because we “won’t know the full picture of the impact until we really come out of this and see businesses come back on line.”

The mayor characterized city revenues in January and February as “strong” and “consistent with our assumptions,” but acknowledged March was “terrible” and April is certain to be the same, as the state shutdown order took effect and the pandemic hit Chicago.

Under questioning, the mayor ruled out only two financial remedies: raiding the city’s financial reserves and delaying state-mandated payments to the four city employee pension funds.

Lightfoot said she has worked hard to put the city on “very solid financial footing” over the last year and has no intention of undermining that progress or risking a drop in the city’s bond rating.

“We won’t tap into the reserves or seek an extension of pension obligations. We’re gonna meet those,” she said.

“We want to make sure we come out of this experience as strong as possible.”

With pension funds investments taking a hit from stock market declines, Lightfoot was asked whether she would take advantage of record-low interest rates by issuing pension obligation bonds. She ignored the question.

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