Lightfoot gives up on budget help from D.C.: ‘We have to fix this ourselves’
Lightfoot declared Republicans and Democrats in Congress had “shirked their responsibility” to address the “catastrophic effect” the pandemic has had on the economy of Chicago and other major cities.
Mayor Lori Lightfoot said Tuesday she has given up hope that Congress will bail Chicago out of a $1.2 billion shortfall and said she is determined to “fix it ourselves,” in part, with $200 million in savings from organized labor.
One day after delaying her budget address until Oct. 21 to give Congress more time to ride to the rescue, Lightfoot declared Republicans and Democrats in Congress had “shirked their responsibility” to address the “catastrophic effect” the pandemic has had on the economy of Chicago and other major cities.
With Chicago now forced to fend for itself, Lightfoot said she has no choice but to make the painful choices that will cause yet another disruption to the lives of city employees, business owners and everyday taxpayers.
That means layoffs, pay cuts, furlough days or a combination of all three as well as the massive property tax increase she has tried desperately to avoid.
“We have to fix this ourselves and we will fix it. The pain and the difficult decisions are gonna have to be made. I don’t relish them at all. ... Every single meeting has been painful. Every single one. Every single one thinking about the hardships that our residents are gonna have to endure and particularly our personnel. I feel every single one of those painful choices. They keep me up at night. They are in my thoughts all day long,” Lightfoot said, her voice nearly breaking.
Lightfoot said her “north star” would be “equity and inclusion.” She said she’s “pushing” her team to “fully appreciate all the impacts, particularly race, ethnicity, gender, what it’s gonna do to all our small businesses” and analyze “every conceivable way so we understand the potential impacts on people’s lives.”
The mayor refused to confirm the $200 million savings target from organized labor. Nor would she say what would happen if union leaders do not meet that number.
“I hope that they will come to the table with some real concrete solutions, but delaying is not possible. Kicking the can down the road? Not who I am. Our moment of reckoning is right now. We have an obligation to the residents of this city to do our jobs and that’s precisely what we’re going to do,” she said.
Lightfoot managed to avert a massive post-election property tax increase that had become standard fare for Chicago mayors by balancing her first budget with one-time revenues.
They included: a $300 million tax increment financing surplus, the largest in Chicago history; a $1.5 billion refinancing, with all $210 million in savings claimed up-front; and a $93 million clawback from the Chicago Public Schools for pension and security costs the city used to pay for.
A subsequent refinancing triggered $310 million savings, $100 million more than planned. The mayor also counted on $163 million from raising ambulance fees paid by private insurers and getting federal approval for reimbursements administered by the state for ambulance transports for low-income patients on Medicaid.
Even after enduring an avalanche of tax increases under former Mayor Rahm Emanuel that only managed to chip away at a $30 billion pension crisis, beleaguered Chicago taxpayers can look forward to more of the same.
Pressed for a preview, Lightfoot would only say she is looking at a “range of options” certain to put aldermen with whom she has a strained relationship to the test.
The only revenue option her financial team has confirmed is an increase—from 7.5% to 9% — in the personal property lease tax on computer leases and cloud services.
“I’ve said to my colleagues in the City Council, this will be the toughest budget that they vote for probably ever given the size of the challenges and our desire not to discard the values we all care about in making investments in people and in communities,” she said.
The mayor’s decision to go it alone came hours after the Sun-Times reported she had asked organized labor to help her achieve $200 million in savings — either through layoffs, pay cuts, furlough days or a combination of the three.
Some of the savings — but not all — could be achieved by eliminating 847 sworn vacancies and more than 200 civilian openings in the Chicago Police Department.
But any plan to eliminate police vacancies would face stiff resistance from the City Council, with homicides and shootings up 50% from last year and officers being pulled from neighborhood districts to patrol downtown.
More likely is a cost-cutting plan eliminating some police vacancies, but retaining others.
That means achieving the mayor’s $200 million savings benchmark likely will require the layoffs she has tried desperately to avoid or a shared sacrifice plan including furlough days or pay cuts for all city employees.
Chicago Federation of Labor President Bob Reiter issued a statement hailing city employees as “heroes who have sacrificed their own health and safety to keep this city moving” during the COVID-19 pandemic. Union leaders “continue to urge the city to work collaboratively to identify efficiencies to help protect city services without damaging cuts to public workers. We must protect our workers and protect our services.”
The CFL has an ownership stake in the Sun-Times.
AFSCME Council 31 spokesman Anders Lindall said his union has “offered to work with the city to find savings that would not require layoffs or furloughs” and await the city’s response.
Shortly after taking office, Emanuel had an early confrontation with organized labor he came to regret.
He demanded work-rule changes to replace 625 layoffs. Labor leaders who did not support his candidacy stood their ground, forcing layoffs.
Lightfoot, by contrast, has had a good working relationship with labor with two notable exceptions: the Chicago Teachers Union and the Fraternal Order of Police. She would like to keep it that way. Which is why she has given labor a $200 million target to meet without dictating how to get there.