Mayor Lori Lightfoot on Monday seized what she called a “once in a lifetime opportunity to transform” Chicago.
The mayor proposed a $16.7 billion 2022 budget that raises Chicago’s property tax levy by $76.5 million, but uses one-time revenues, debt refinancing and a $1.9 billion avalanche of federal relief funds to play Santa Claus by making scores of strategic investments.
In an hourlong budget address to the City Council, an impassioned Lightfoot said the “hardship, pain and even death” Chicagoans have endured over the last 18 months requires nothing less.
It was “ushered in by the insidious reach of a global pandemic, first of its kind in 100 years, which brought with it a pandemic-sized economic meltdown, civic unrest and unacceptable levels of violence,” the mayor said.
“But we must be honest and recognize that the fault lines revealed during the pandemic were actually decades in the making, borne of persistent, intentional acts dating back to our earliest days as a union and compounded and refined over time.”
Lightfoot said nothing short of “big, bold audacious steps” are needed to address the wealth, jobs and 15-year “life expectancy” gaps between Blacks and whites. She also talked about “rampant, unchecked opioid and heroin use” that leaves some parts of the city “looking like a scene from ‘The Walking Dead.’”
“We must commit ourselves to being intentional, but in a very different way than in our past,” the mayor said.
“We must commit to a new set of truths, starting with the truth that equity and inclusion must be at the center of all of our work and that, in our post-pandemic recovery, no one — not anyone — can be left behind.”
For the second straight year, Lightfoot’s budget is balanced with one-time revenues.
It includes $131.4 million in savings from “improved fiscal management”; $25 million by “sweeping aging accounts”; $21.6 million in health care savings; $46.2 million in lower-than-expected costs from the new eight-year police contract and $62.6 million from “improved revenue projections.”
It also calls for the city to refinance $1.2 billion in debt and use $232 million of the $254 million in savings to bankroll four years of back pay for Chicago police officers. The remaining $22 million will help close the $733 million budget gap.
Once again, the mayor’s plan to eliminate her own budget shortfall includes offloading costs to Chicago Public Schools.
This time, CPS will be asked to cover $75 million in pension costs for school administrators who draw their retirement checks from the Municipal Employees Pension Fund.
But the budget also declares a $271.6 million surplus in tax increment financing funds, with $150.2 million of that money going to CPS and $67.6 million earmarked for the city’s corporate fund.
Separate and apart from the $1.2 billion debt refinancing is the financial shell game Lightfoot has devised to get around the U.S. Treasury Department’s ban on using federal COVID-19 relief funds to retire debt.
Instead, the mayor plans to use $782 million in relief funds to replace revenues lost to the pandemic in 2020 and 2021 and set aside $152.4 million in stimulus funds for revenue replacement in 2023. Another $385 million in federal COVID-19 relief will be used to bankroll “essential existing and new programs” next year.
The infusion of federal cash will free up corporate fund revenues to retire $465 million in scoop-and-toss borrowing that saddles yet another generation of taxpayers with debt and cancel plans to borrow $500 million more.
Chicago’s property tax levy will rise by $76.5 million — to $1.71 billion. All but $300 million of that money will support four city employee pension funds.
That includes $22.9 million for the automatic escalator 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.”
During a Zoom meeting with the Chicago Sun-Times editorial board, Lightfoot argued there would be “no new vote” to raise property taxes, noting both the capital plan and the automatic escalator were approved last year.
She sloughed off a demand from downtown Ald. Brian Hopkins (2nd) to repeal the automatic escalator at a time when beleaguered property owners are already reeling from skyrocketing reassessments.
“A lot of those arguments were raised last year. And we got majority-plus support from members of the City Council who are looking at this — not as a short-term fix, but as something that was necessary to put us on the road to structural balance,” the mayor said.
“That hard vote has made this year’s budget — and, frankly, the budget for 2023 — that much easier. ... Structural solutions is the way that we are going to get ourselves out of the longer-term fiscal mess that we inherited.”
Last year Lightfoot balanced her budget by, in part, eliminating 614 Chicago Police Department vacancies and shrinking CPD by attrition.
This year, she’s proposing a $189 million increase in police spending — to just under $1.9 billion — in part, by expanding the officer wellness program and creating a full-time recruiting team to travel the country seeking candidates.
“We’d be better served with that funding going towards more of the mental health and homeless prevention,” said Ald. Andre Vasquez (40th).
Ald. Anthony Napolitano (41st), whose Far Northwest Side ward is home to scores of CPD officers, demanded that Lightfoot fill some of the police vacancies — even if it means finding a giant venue to run double classes of police recruits.
“That’s what we’re lacking. That’s where we’re hurting the most. We need more officers out there. ... You have to have some sort of show of force on the streets to combat crime,” Napolitano said.
“It’s not even a question. It has to be done. Wait till you see the retirements in the next couple of months and the next year. It’s gonna make peoples’ heads spin.”
Downtown Ald. Brendan Reilly (42nd) said it’s “crystal clear that we need more police officers on the street — especially overnight.”
“I’ll be pressing for a police budget that compensates for the 614 officer vacancies that were eliminated in last year’s budget (which I voted against),” Reilly wrote in an email to the Sun-Times.
“I plan to advocate for more funding for the acceleration of police recruitment and training to add even more officers to the street. And I will be pressing to fund the repair and ongoing maintenance of CPD’s second police helicopter — to get it back in the air to go after carjackings and drag racing across the city.”
Lightfoot said her goal is to fill the 1,000 existing police vacancies and do a better job of keeping pace with retirements.
“Our challenge is not the vacancies. The challenge is that, to be blunt, we get butts in seats to take the test. And then, once we get them into the academy, make sure they stay as police officers here in Chicago and not go to the suburbs or go to other city employment like the fire department,” Lightfoot said.
“Back in the day when you had a police test, 20,000 people showed up. You’re not seeing that anywhere in the country. So we’ve got to do more and creative things and really think about ways in which we can incentivize folks to come and take the test.”
Lightfoot moved up her 2022 budget address by a month to coincide with the unveiling of her plan to spend the stimulus funds.
The grand total of new investments is $1.2 billion. That includes $567.6 million in federal relief and $660 million from Lightfoot’s 2022 capital bond issue.
The list includes: $202 million to reduce homelessness; $52 million in new investments for mental health initiatives; $150 million for youth programming; and $85 million for violence interventions.
To combat global warming, the mayor’s budget calls for planting 75,000 new trees. To reduce poverty, she proposes a $31.5 million, one-year test of a guaranteed minimum income, something championed by her former floor leader and current Hispanic Caucus Chairman Gilbert Villegas (31st). Under the plan, $500 checks, no strings attached, would be sent to 5,000 of Chicago’s neediest families. Lightfoot billed it as the largest such cash assistance program of its kind in the nation.
“Imitation is the greatest form of flattery,” Villegas said.
Noting that he introduced a similar ordinance six months ago, Villegas said: “We could have been four or five months into a pilot program really helping people. Although I appreciate her putting this in the budget, I’m questioning why it took so long to do this. Especially when the Black Caucus wanted reparations to go first.”
Lightfoot said reparations is “about righting historical wrongs and we’re doing that” — both with the guaranteed minimum income and other stimulus spending.
The budget also includes modest increases in the budgets for Council committees and 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.
And 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.”
At one point during her hourlong budget address, Lightfoot delivered what amounts to a religious sermon. She talked about how Moses gathered the Israelites before they reached the Promised Land after a “40-year, grueling set of trials” and said those struggles are “not unlike what we have endured over the last 18 months — hunger, plagues and death.”
Just as Moses told his people they were “doomed to repeat” the harrowing test until a new, more united generation emerged, so must Chicago unite behind a new, more equitable future, the mayor said.
“Our people need us and, importantly, we have an obligation to them, to ourselves and to future generations to seize with gusto the opportunities this moment presents. To learn the lessons of history and not repeat the mistakes of the past,” she said.
Ald. Carlos Ramirez-Rosa (35th), chairman of the Socialist Caucus, credited Lightfoot with “copying” the Chicago Rescue Plan proposed by United Working Families and other progressive groups.
“We asked for $230 million to go toward affordable housing and homelessness and that’s what she’s including in this budget. We asked for a significant investment in mental health services and a 911 alternative system. That’s in this budget,” Ramirez-Rosa said.
Far South Side Ald. Anthony Beale (9th), one of Lightfoot’s most outspoken City Council critics, branded Monday’s budget address “nothing but a campaign speech.”
“How do you create all of these new programs? How is it gonna be sustainable going forward? Once all the federal money runs out, then what? We’re gonna be left holding the bag.”