Lightfoot: Federal relief package not a ‘slush fund’
The mayor on Wednesday warned aldermen to keep those wish lists in their back pockets, saying she expects “the money is gonna come ... through specific grants that have specific requirements on how the money can be spent.”
Fresh from a City Council rebellion over her decision to spend $281 million of Round One COVID-19 relief on police payroll, Mayor Lori Lightfoot tried Wednesday to head off a repeat performance.
Hours after the U.S. House of Representatives approved an even bigger package that will send $1.8 billion to Chicago, Lightfoot warned Chicago aldermen to keep their wish lists in their back pockets, because the money will have strings attached.
“My expectation is that the money is gonna come ... through specific grants that have specific requirements on how the money can be spent,” she said.
“So I want to disabuse people out there and my colleagues in the City Council. This is not $1.9 trillion of a slush fund that we can use every way that we can.”
Lightfoot said she’s been “hearing a lot from people who’ve been around city government for a while [about] what didn’t go right and what did go right” after the infusion of stimulus funds Chicago received after the housing and economic crisis of 2008.
“We want to be smarter about the way in which we utilize this money and make sure that we’re actually making catalytic investments that are gonna lift us up into a full recovery,” the mayor said.
Lightfoot signed off on $500 million in short-term borrowing — for less than a year at an interest rate of 1.95% — to buy time for Congress to ride to the rescue of pandemic-ravaged cities.
Now, the mayor’s gamble has paid off.
The $1.8 billion federal infusion includes money to replace revenues lost to the coronavirus and will allow the mayor to cancel, or at least minimize, the scoop-and-toss borrowing that was one of the most controversial elements of her 2021 budget.
She can scale down plans to refinance $1.7 billion in general obligation and sales tax securitization bonds and claim $949 million in savings in the first two years.
That approach would have extended the debt for eight years and returned Chicago to the bad borrowing days former Mayor Rahm Emanuel ended, although not nearly fast enough to satisfy Wall Street rating agencies.
“Obviously, some of the money will come to help us address our revenue loss as a result of COVID-19. But based upon what I know at this point, a lot of that money is coming through specific grant streams that are going to be restricted,” she said.
“It’s my expectation that we’re gonna get money to help with public health through vaccinations and so forth. Monies are gonna be coming to address affordable housing, homelessness. It’s money to be sure. And it’s a lot of money. But, most of it is coming, I believe, with a lot of strings attached in how we can utilize those funds.”
Lightfoot said she expects “a tranche” of relief money this year and another next year — but the money cannot be used to reduce taxes or bankroll city employee pensions.
“We’ve got to be very smart about how we utilize those monies to make sure we have maximum impact, as intended by the Congress. If we don’t follow those rules, we put ourselves in a world of hurt,” she said.