Chicago is still waiting for the federal approval Mayor Lori Lightfoot claimed was imminent for a $163 million increase in ambulance fees, but it will come, averting the need for a “midyear correction” in her $11.6 billion budget, top mayoral aides said Friday.
Chief Financial Officer Jennie Huang Bennett and Budget Director Susie Park portrayed the ambulance fee delay as routine for a large bureaucracy. They’re certain it has nothing to do with the mayor’s repeated attacks on President Donald Trump.
“It is coming. We are working with the Center for Medicaid Services. We have submitted our plan for how the funds are gonna flow. We know the funding is coming. It’s just the review process,” Bennett said.
“Everyone’s been in communication with CMS. And it’s just going through the normal review process. It is no longer or shorter than what the normal review process is. We are just waiting for the approval.”
Lightfoot averted a City Council rebellion by steering clear of a massive property tax increase. Instead, her budget includes an $18 million property tax increase to open Chicago Public libraries on Sundays and higher taxes and fees on everything from ride-hailing, restaurant meals and recreational marijuana to cloud computing and parking meters.
But critics have called it a “smoke-and-mirrors” budget that is likely to require a massive property tax increase midyear because it’s precariously balanced with one-time revenues.
They include a record $300 million tax increment financing surplus; a $1.5 billion refinancing with all $210 million in savings claimed upfront and a $93 million clawback from the Chicago Public Schools for pension and security costs previously covered by the city; $150 million from “zero-based budgeting;” and the $163 million surge in ambulance fees by raising rates on private insurers and getting federal approval for reimbursements administered by the state for transporting low-income patients on Medicaid.
On Friday, the mayor’s budget team was asked whether Lightfoot’s first budget would need a “midyear correction.”
“It will not,” Park said.
Bennett was asked whether that prediction would hold up if an independent arbitrator awards a substantial pay raise — and nearly three years of back pay — to rank-and-file police officers demanding an 18% pay raise over three years. Chicago firefighters are also working under an expired contract.
“We’re working very hard to avoid it,” she said.
“It’s not to say that property taxes [are] off the table. The mayor said that a number of times. But we are working in a number of different ways — whether it’s efficiencies, whether it’s legislation in Springfield, whether it’s other potential new revenue sources — to try to avoid a property tax increase.”
Pressed to identify “other potential new revenue sources,” Bennett talked about the broader congestion fee that might emerge from a long-term study on that issue.
Park said the Lightfoot administration is also seriously considering charging universities, hospitals and other wealthy nonprofits “in lieu of fees” to compensate for they’re being exempt for paying property taxes.
That’s an idea that originated with United Working Families, Grassroots Collaborative, the Chicago Teachers Union and their City Council allies.
“We want to look at that to see what other cities have done. Where it’s been successful and how that might look here to see if that could work. Our progressive aldermen feel strongly about that. There is something there,” Park said.
“They do have large funding. [But there needs to be] some balance of the benefit they provide to the community, the services and where that right structure is. That takes time. It’s not something we could have come up with between July through November. We are gonna take the time to really look at that.”
What is the mayor’s plan to meet a looming, $1 billion spike in pension payments?
“It’s really the casinos and real estate transfer tax and any other new revenues that we could grow over the next number of years,” Bennett said.
Both measures went nowhere during the fall veto session in Springfield.
What about the telephone tax and 29.5% tax on water and sewer bills that bankrolled the Laborers and Municipal Employees pension funds? Won’t those taxes need to be raised also?
“I don’t know if they will or won’t have to be raised. It’s not in our plan currently,” Bennett said.
As for the five-year, $1.5 billion price tag for the new teachers contract, Bennett said it’s “not insurmountable.” The Chicago Public Schools will find the money to pay for it with increased state funding and by raising property taxes to the cap every year, she said.
