City Council passes mayor’s 2022 budget in record time
Mayor Lori Lightfoot’s $16.7 billion budget sailed through the City Council by a vote of 35 to 15, thanks to an avalanche of federal relief funds helping support an unprecedented 30% increase in city spending.
Mayor Lori Lightfoot likes to celebrate her budget victories with a steak, a Scotch and a cigar.
After Wednesday’s City Council vote culminating the most tranquil budget season in recent memory, she might want to add dessert to the menu.
Lightfoot’s $16.7 billion budget sailed through the Council 35 to 15, thanks to an avalanche of federal stimulus funds paving the way for an unprecedented 30% increase in city spending.
“There are dollars here for damn near everything that everybody has talked about,” Ald. Jason Ervin (28th), chairman of the Black Caucus, said toward the end of a two-hour debate.
Education Committee Chairman Michael Scott Jr. (24th) applauded the mayor for navigating the “tightrope walk between doing what is fiscally prudent and investing in” the city’s neediest residents.
Later, the mayor celebrated passage of what she called “the most progressive budget ever in the history” of Chicago after the “most inclusive process this city has ever seen” during a Cultural Center rally that felt like a speech she might give to launch her reelection campaign.
She harkened back to what would be the final budget proposed by Mayor Harold Washington weeks before his death, as he was still struggling against “forces that didn’t want him to succeed” and “didn’t want to see change come.”
“He never lived long enough to see that budget come to fruition. But with the passage of this budget, we’ve picked up the baton that he has relayed us,” she said.
Her voice quivering, Lightfoot said, “I’ve had a hard time sleeping the last two days — not because of fear, but because of excitement. The excitement of what the possibilities would be in this moment if we got this budget over the threshold. Ladies and gentlemen, I am overjoyed with humility, with reflection, but also with incredible pride.”
The vote to raise Chicago’s property tax levy by $76.5 million — after a $94 million hike in real estate taxes last year — was 32 to 18.
That increase includes: $22.9 million kicking in automatically, tied to the Consumer Price Index; $25 million to bankroll the 2022 installment of Lightfoot’s $3.7 billion capital plan; and $28.6 million captured from “new property.”
Not counting new property, the cost of the increase to the owner of a home valued at $250,000 is $38 a year.
Lightfoot easily sloughed off a demand from downtown Ald. Brian Hopkins (2nd), the Hispanic Caucus and business leaders to repeal the automatic escalator.
“For the second consecutive year, Chicago businesses will face an increase in property taxes, all while contending with skyrocketing property assessments which, in some cases, have doubled or even tripled in value due to the Cook County assessor’s office shifting even more of the tax burden onto businesses,” Chicagoland Chamber of Commerce CEO Jack Lavin said in a statement.
Lavin noted many businesses are “still struggling” after 18 months of “extra safety costs, capacity restrictions, ever-growing public safety concerns” and overall uncertainty.
“Chicago’s business community needs to see more direct support, an immediate plan to fill police vacancies and bolster public safety ... and a stop to these annual increases,” he said.
What the mayor has called a “once in a lifetime opportunity to transform” Chicago allowed Lightfoot to play Santa Claus, instead of Grinch.
That’s even after using about two-thirds of federal relief money to replace revenues lost to the pandemic in 2020 and 2021. She salted away $537.4 million of it to use in 2022 and 2023.
“I feel like Christmas has come early. Everybody seems to be getting what they want. We have a $16 billion spending spree going on,” said Ald. Ray Lopez (15th), one of the mayor’s most outspoken City Council critics.
Lopez explained his “no” vote by pointing to the 4,000 vacant positions in the 2022 budget — positions Lightfoot has “no plans to fill,” he said.
“We could have given our taxpayers a $300 million break if we had merely decided to end those vacancies alone,” Lopez added.
Today we passed the FY2022 Chicago Budget making it the most progressive budget in City Hall's history. #chibudget22 pic.twitter.com/abfVg5RS87— Mayor Lori E. Lightfoot (@chicagosmayor) October 27, 2021
To reduce poverty made worse by the pandemic, Chicago will set aside $35 million to launch a one-year test of a concept known as universal basic income.
Under the plan, the city will send $500 checks, no strings attached, to 5,000 needy families. Lightfoot has called it the largest such program in the nation.
Civic Federation President Laurence Msall called the program, championed by Ald. Gilbert Villegas (36th), a “worthy experiment.” But Msall also is concerned about dependency.
“City finance officials have assured us that there is no ongoing commitment once this money is passed out. But will there be an expectation by those recipients that more people will get that money, or they will continue to get it, even after the federal stimulus money is no longer available?” he said.
Lightfoot recalled watching her parents sit around their kitchen table “with the bills all spread out trying to figure out” how to pay both them and the mortgage.
“We know that there are families going through that same exercise every single day in our city. And what we also know is that having extra income consistently for some time can make the difference for the working poor who are living on the cusp of financial ruin,” she said.
“This program is controversial for some. But for me, it just makes plain sense. Of course, we need to teach people how to fish. But, in this moment with so many people suffering in pain and worrying about financial ruin, this is what we must do to make sure that these families don’t slip into the abyss.”
Lightfoot moved up the budget process by a month to coincide with the unveiling of her plan to spend federal relief funds.
She ended up using 68% of it for revenue replacement. That freed up the city’s corporate fund to repay a $450 million line of credit used to eliminate a pandemic-induced shortfall and cancel $500 million in scoop-and-toss borrowing that saddles a another generation of Chicagoans with debt and would have been necessary without the federal largesse.
Still, she managed to earmark $1.2 billion for new investments by pooling $563 million in federal money with the $660 million that represents the 2022 installment of her capital plan.
Christmas also comes early in Chicago with: $202 million to reduce homelessness; $52 million for mental health initiatives, including $15 million to expand a pilot program for alternative responses for mental health emergencies; $150 million for youth programming; and $85 million for violence intervention.
To combat global warming, the budget calls for planting 75,000 new trees over the next five years while reducing the yearlong wait to get a tree trimmed by nearly doubling the number of crews.
There’s a $20 million Artist Relief and Works Fund, including $10 million in relief funds and a matching $10 million “dedicated revenue stream” from the corporate budget that will “no longer be subject to the vagaries of the hotel tax.”
The budget also includes several new or enhanced programs to relieve the burden on low-income Chicagoans driven into debt and bankruptcy by the city’s over-reliance on ticket revenues.
That includes so-called “fix-it tickets” for certain compliance violations, such as an invalid or missing city sticker, and a 50% reduction in tickets for low-income drivers.
In the horse-trading before the final vote, Lightfoot also ratcheted up investments to satisfy Council demands.
“When it was time to bend, you did. When it was time to [stand] steadfast, you did,” indicted Ald. Carrie Austin (34th) told Budget Director Susie Park.
“I wanted to extract some more money out of you. But you weren’t budging.”
Austin then directly addressed the mayor who dumped her as Budget Committee chairman and, after her indictment, forced her out as chairman of the Committee on Contracting Oversight and Equity.
“These are trying times for all of us. They are trying times for you. But I know you’ve done 100% for the people who elected you,” Austin told Lightfoot.
Lightfoot resisted demands to reopen mental health clinics shuttered by Mayor Rahm Emanuel, but did agree to increase staffing 72% at the five city clinics that remain open.
Other eleventh-hour concessions include more money for homeless outreach, single-room-occupancy buildings, food equity, forestry, marketing at the Commission on Animal Care and Control and additional city planners to oversee land sales.
An oversight subcommittee chaired by Budget Committee Chairman Pat Dowell (3rd) is also being created to ride herd over how the city spends federal relief funds.
With those changes — and more — the progressive agenda that can never be fully satisfied is, at the very least, appeased.
“This is not a perfect budget. That’s not possible. But there are critical investments at a time when we need it most,” said Ald. Matt Martin (47th).
Ald. Andre Vasquez (40th) said his “comrades” in the Socialist Caucus should be “proud of what we fought to win for our people.”
“We have meaningful, historic, once-in-a-generation investments in violence prevention, in public mental health and non-police crisis response. ... We provide support for our unhoused populations, cash assistance for those families that needed to be sustained during the pandemic, support for our local businesses and a landmark investment in our environment,” Vasquez said.
Ald. Carlos Ramirez-Rosa (35th) said he was supporting the 2022 budget “to support those things that progressives want and our communities fought for.”
But Ramirez-Rosa tried to have it both ways — decrying the fact that “over half a billion” in federal funds “will effectively be given to Chase Bank” as well as Lightfoot’s decision to “continue to fund policing and jails more than the things that are actually proven to keep us safe.”
“That’s why I’ll be voting no on the fiscal 2020 and 2021 budget amendment,” he said.
Ald. Sophia King (4th), chairperson of the Progressive Caucus, called the budget a “progressive win” and a “win for our most vulnerable.”
“The tragic toll of this pandemic, coupled with a racial reckoning and social unrest, has been felt across our city and has shaken us to our core. Yet it has informed us on where our budget priorities need to be for — not just 2022, but for years to come,“ King said.
Ald. Byron Sigcho-Lopez (25th) chided his colleagues for having “settled for $5 million of the $70 million commitment” needed for single-room-occupancy buildings and transitional housing.
“In the middle of a pandemic and in the [cold] weather, we allowed the mayor to continue to turn her back on 80,000 unhoused people and people who have unstable housing who go from shelter to shelter,” Sigcho-Lopez said.
Last year Lightfoot balanced her budget by, in part, eliminating 614 Chicago Police Department vacancies and shrinking CPD by attrition.
This year, she’s increasing CPD spending by $189 million — to just under $1.9 billion. Park has said the “full driver” of that increase is the new police contract, with its 20% pay raise over eight years.
Meanwhile, the tidal wave of police retirements continues with 703 retirements already this year and 987 sworn vacancies.
Some Council members wanted Lightfoot to restore at least some of the police vacancies. But the mayor has argued CPD will have enough trouble just filling the 1,000 vacancies.
“The No. 1 issue in our city is violence. If we cannot gain control of the violence on our streets, it will undercut everything we are trying to do,” said Housing Committee Chairman Harry Osterman (48th).
“What violence has taken from Chicago families is a pandemic. We need to address it with a plan, with re-imagined support services and unity as Chicago leaders. ... We need to work closer together. ... We need to fill the police vacancies and properly train our next generation of officers. ... We need to deploy those officers where they need to be. That’s in our districts where, block-by-block, they can build trust.”
Despite the political euphoria that will surely come from having put the budget to bed in record time, Msall warned Chicago is hardly out of the woods.
Although the city has “climbed the ramp” to actuarial funding for all four pension funds, there is still no long-term funding source from Springfield. Nor has the General Assembly heeded the Civic Federation’s call for a state constitutional amendment eliminating the pension protection clause going forward.
Msall also remains concerned about the mayor’s continued reliance on one-time revenues, the city’s mountain of debt and about her plan to refinance $1.2 billion more and use $232 million of the savings to bankroll four years of back pay for Chicago police officers.
He’s equally concerned about what will happen “when the federal ARP money goes away” — particularly if the $153 million in federal relief reserved for revenue replacement in 2023 is not enough.
“What’s Plan B if the city does not recover at the aggressive and robust growth that the city is hoping for? We need to have a Plan B. Will we try to raise taxes if the economic disruption caused by the pandemic continues? Will we make structural changes? Will we be cutting?” he said.
“In likelihood, it’s going to have to be a combination of all of that. But if we don’t see a return where business travel comes back, where convention attendance [comes] back, the city is going to have a hard time meeting its debt obligations for many of the key investments that those industries support.”
Voting against the budget were: Hopkins; Anthony Beale (9th); Marty Quinn (13th); Edward Burke (14th); Lopez; David Moore (17th); Matt O’Shea (19th); Jeanette Taylor (20th); Silvana Tabares (23rd); Sigcho-Lopez (25th); Roberto Maldonado (26th); Nick Sposato (38th); Anthony Napolitano (41st); Brendan Reilly (42nd); and Jim Gardiner (45th).
Joining them in voting against the property tax increase were: Stephanie Coleman (16th); Felix Cardona (31st); Villegas; and Debra Silverstein (50th). Sposato, who voted against the budget, voted for the property tax increase.