Six weeks ago, Mayor Lori Lightfoot warned Chicago would face “really difficult or impossible choices” without another round of stimulus money to replace revenue lost during the coronavirus pandemic.
The following day, she acknowledged the stay-at-home shutdown of the Chicago economy had blown a $700 million hole in her 2020 budget — and she refused to rule out a dreaded property tax increase.
Now, in a letter to Illinois’ congressional delegation, the mayor is joining forces with her counterparts across Illinois in sounding the alarm about what the consequences might be if Congress fails to approve replacement revenue.
“Not only are tax revenues dropping drastically. Funding essential services critical to the health and safety of our residents has been increasing. We cannot continue to function and serve the people without direct, unrestricted federal aid to our communities,” states Tuesday’s letter, signed by mayors from both parties.
“It is paramount that future funding provide the flexibility to cover lost revenue so that we may continue our essential services. Keep staff — including public safety and frontline workers — on the payroll and meet the needs of our communities which have seen tremendous hardship. We reject claims that such funding is a bailout for mismanaged governments.”
Citing warnings from the Centers for Disease Control, the mayors said they need to be prepared for a “possible resurgence of COVID-19 this fall,” adding, “In some places, this resurgence has already begun.”
“It is our sincere hope and plea that any additional federal funding will reflect this second wave possibility,” the letter states.
Lightfoot has openly acknowledged “the partisan divide has reared its ugly head in Washington D.C.” since Speaker Nancy Pelosi in May pushed through the U.S. House a $3 trillion stimulus bill that includes $1 trillion for cities and states.
That bill, the HEROES Act, would have sent massive assistance to cities, states and other local governments – more than 2,000 local units of government in Illinois. It passed on a partisan roll call. All five GOP House members from Illinois voted no. The Republican-controlled Senate shows no sign of considering the HEROES Act.
At a news conference Wednesday called to sound the alarm about an uptick in coronavirus cases among young people, Lightfoot was asked precisely what she means when she warns of dire consequences without replacement revenue.
“Everybody knows what those are. But, our hope is that we will get new relief from the federal government. I’ve spoken recently with Senator Durbin, for example, along with a mayor of another city that’s much smaller than Chicago. We’ve talked about the impact of closing the economy on local revenues, on our budgets. We desperately need new resources from the federal government that we can use for revenue replacement,” the mayor said.
The $1.1 billion in federal stimulus money that has already rolled into Chicago from the so-called “CARES Act” was “extraordinarily helpful,” but it can only be used for the city’s direct response to the pandemic, Lightfoot said.
“What we need — all of us — is resources to help us address the revenue shortfalls that have arisen as a result of the economic shutdown,” she said.
Both the House and Senate are working on a fourth round of COVID-19 emergency funding.
The comprehensive financial analysis that replaced Chicago’s preliminary budget is due out by the end of the month.
So far, Lightfoot has said she plans to use the $100 million in higher-than-expected savings from a January refinancing to reduce the shortfall, then “identify additional refinancing savings when market conditions improve.”
She has also “significantly slowed down hiring” while asking city departments that took a hit in her first budget to go back and identify even more savings and “maybe push off projects to an out year.”
Only then will she turn to another round of tax increases and budget cuts. She has called a property tax increase her “last resort” and employee furloughs and layoffs “second-to-last.”
Rep. Mike Quigley, D-Ill., a member of the Appropriations Committee, told the Sun-Times many items in the Lightfoot letter would be addressed if the HEREOS Act became law.
“The HEROES Act does the job but it only passed the House,” Quigley said. “And at some point, there’ll be another piece of legislation. She’s asking us to address the issues in the letter, which I get.”
The Lightfoot letter reaffirms how important it is that “we do get a final bill passed and signed by the president that addresses the issues in the letter,” Quigley said.