Mayor Lori Lightfoot warns of ‘hard choices’ and ‘sacrifice’ ahead: ‘We don’t have a moment to lose’

Mayor Lori Lightfoot on Thursday entered the living rooms of Chicagoans in a televised address to warn of “hard choices” ahead — and revealed the bad-news number all were waiting for: an $838 million deficit.

That was the main reveal in a 26-minute speech in which Lightfoot said no options are off the table to tackle the city’s financial crisis — and that she’d sacrifice herself “politically” to get it right.

“Some of our solutions will be hard. Yes, they may involve putting ourselves at risk. And if it means that I sacrifice myself politically, so be it in pursuit of the right thing,” Lightfoot said at the Harold Washington Library’s Cindy Pritzker auditorium. “We don’t have a moment to lose.”

Lightfoot noticeably pivoted to the state on two key issues: a Chicago casino and pension consolidation — showing her political hand in amping up the pressure for Gov. J.B. Pritzker and state lawmakers to help the city out.

The mayor did offer some general solutions to fill the gap, including a graduated real estate transfer tax; “exploring revenue options to address rampant congestion,” and collecting revenue from the cannabis industry. Lightfoot said her guiding principles with revenue would be to relieve the financial burden of those who can least afford it — and work to not drive businesses out of Chicago.

Lightfoot too enunciated that a Chicago casino, if done right, will address the city’s long-term problems and won’t serve as a “one-time fix.”

“But we also have to be honest with ourselves. If such an agreement [on a casino] isn’t made, if we don’t secure this casino and the revenue it creates, we will be forced to make painful choices on finding other revenue sources. And we all know what those are, the sources we wish to desperately avoid,” the mayor said.

Ashlee Rezin Garcia/Sun-Times

Later, Lightfoot said the city has historically relied on property taxes to heap in cash: “I want to avoid that measure as much as possible, but if we don’t get the structural changes that our pensions need, we will be presented with very hard and limited options.”

Lightfoot warned of the city’s increased annual cost of more than $200 million for public safety services, and a $400 million increase for municipal and labor pensions next year.

“In other words, no matter what we do for this coming budget, Chicago will be on the hook for over half-a-billion in new pension obligations over the next three years,” Lightfoot said.

Lightfoot also vowed a more transparent budget process — with the rare televised speech as her first step. Lightfoot plans to host four budget town halls ahead of her October budget address.

Responding to Lightfoot’s request for state help, Pritzker’s office said “it will be important for the mayor to reach out to leaders and lawmakers across the state and across the aisle to build a coalition for her ideas,” spokeswoman Emily Bittner said in a statement.

The tough choices Lightfoot warned of more than once would mark the beginning of the end of a political honeymoon for the freshman mayor who has captured headlines across the country. Lightfoot has said previously there is “no question” she’ll be forced to raise taxes.

Voicing an increasingly common refrain from newly elected officials, Lightfoot entered the mayor’s office warning that the city’s fiscal situation is even worse than imagined. The previously estimated $700 million budget shortfall figure had ballooned to an even larger gap. Factors contributing to the shortfall are believed to include the structural deficit and debt service, pension payments and yet-to-be-negotiated pay raises for police officers, firefighters and teachers. There’s also a list of wrongful conviction lawsuits to worry about.

And while many had hoped a Chicago casino would help the city reap some cash, there’s a big battle ahead. An Illinois Gaming Board consultant has thus far concluded the taxes the deal calls for are so high that not even a casino located in or near downtown would attract financing.

Ashlee Rezin Garcia/Sun-Times

After listening to the speech in the crowded auditorium, Ald. Brian Hopkins (2nd) said he heard some familiar refrains: blame the previous administration, highlight short-term successes and finding efficiencies — and then set the stage for bad news.

“I’m very interested in seeing the math on how she came up with that figure — she touched on it in broad strokes,” Hopkins said. “But she didn’t touch on the revenue side and from projections that I’ve seen independently of her office, actually revenue projections have been good. We’ve seen a net increase in the last decade of about 25% on the revenue side exceeding the rate of inflation every year. So money’s coming in. Where’s it going?”

Laurence Msall, president of the Civic Federation, said the $838 million budget deficit figure is a “shocking number” but it doesn’t surprise him given the roughly $700 million to $750 million deficit figure touted by former Chief Financial Officer Carole Brown. And he said Lightfoot’s threat of political sacrifice was “refreshing.”

“Most inspiring was she said she is willing to do what is necessary, regardless of the political risk to her,” Msall said. “I think that’s refreshing for Chicagoans to hear that this is not an election or reelection budget that she’s trying to put together. She’s trying to close an $800 million deficit. And that by definition is going to cause a lot of shared sacrifice, and a lot of pain.”

Msall noted Lightfoot was also asking for help from Springfield, both in terms of making sure a Chicago casino can happen, as well as a potential statewide resolution on pensions, though that wasn’t “artfully articulated.” That could look like consolidation since there’s “no policy justification for Chicago to have its own pensions.”

Before Lightfoot took the stage Thursday evening, protestors gathered outside of the Harold Washington Library demanding the mayor “keep her promises” in regards to funding to address homelessness and opening an investigation into a tax-increment-financing deal for Lincoln Yards.

”We’re asking for resources — it’s impossible to believe there’s no resources for us,” Estela Diaz said. “We’re asking her to keep her promises.”

At the rally, Ald. Carlos Ramirez-Rosa (35th) said it was “with great disappointment” that he and others watched Lightfoot give the green light to the mega-development.

”Chicagoans voted for change, Chicagoans are tired of business as usual, we are tired of a city where the rich and powerful corporations and connected developers get our money while we are told that we have to pay more,” Ramirez-Rosa said.