Mayor Lori Lightfoot’s plan to close a projected $ 733 million budget gap in 2022 hinges on $ 385 million in federal relief funds, roughly $ 298 million in savings and cuts, and bet the economy of the city will improve rapidly as the COVID-19 pandemic finally subsides.
Lightfoot said the spending plan contained “no new taxes or significant increases in fees” for Chicago residents.
The plan also fills a $ 950 million deficit in the city’s 2020 and 2021 budgets caused by the economic collapse triggered by the coronavirus pandemic with federal relief funds.
Originally, the city planned to take on high-interest debt to avoid cutting municipal services, but canceled those plans when President Joe Biden enacted a federal back-up plan in March.
In total, Lightfoot’s proposal sets aside $ 1.3 billion, or about 68% of the city’s share of federal relief funds, to cover the cost of providing municipal services and paying municipal workers. in 2020, 2021 and 2022 during the pandemic and compensate for the loss of income during the economic collapse.
This includes $ 152 million that the mayor has offered to save until 2023, as cover against another wave of the COVID-19 pandemic, which is still spreading at a high transmission rate in Chicago due to the variant. more infectious delta.
But along with the rest of the federal relief plan, Lightfoot has offered to fund a wide range of programs designed to help Chicago recover from the pandemic-triggered disaster and end the wave of violence sweeping the South and West sides.
“On the eve of the 150th anniversary of the Great Chicago Fire, let’s match and exceed the determination of our ancestors who literally rebuilt this city from its charred ashes and laid the foundation for the great global city that we are today,” Lightfoot said. . “To build a better city, we need to invest more in our people, our families and our neighborhoods. Fundamental and transformative investments.
The largest investment proposed by the mayor would set aside $ 31 million to fund a pilot program that would make direct cash payments to “hard-hit low-income households that need additional economic stability,” Lightfoot said.
This would launch the largest direct cash assistance program in the United States, Lightfoot said.
Ald. Gilbert Villegas (36th arrondissement) presented in April a plan to use $ 30 million from the federal government to send $ 500 a month to 5,000 families for a year, only to see it blocked by members of the black caucus of the city council who said it was a non-starter since the city has yet to come up with a plan to pay reparations to descendants of enslaved African Americans.
“Imitation is the sincerest form of flattery,” Villegas said.
In addition, Lightfoot has proposed to use $ 15 million from the federal relief program to send mental health professionals to help Chicagoans who call 911 while they are experiencing a mental health crisis. In total, Lightfoot’s 2022 budget will spend an additional $ 52 million to expand mental health services in Chicago.
The city is also expected to spend an additional $ 240 million in 2022 on affordable housing initiatives. It will create and modernize more than 4,000 housing units for low- and moderate-income Chicagoans, according to the mayor.
“I think it’s pretty clear that members of the administration have copied the duties of this coalition,” Ald said. Carlos Ramirez-Rosa (35th arrondissement) said in reference to initiatives supported by United Working Families, a progressive political group. “This coalition has been calling for certain investments for months to ensure that the federal US bailout dollars the city receives are spent on the things our communities need.”
Leaders from United Working Families, who have called for the bulk of the federal relief program to fund programs to shelter homeless Chicagoans and provide direct aid to those struggling during the pandemic, declared victory after the mayor’s announcement.
“Today’s budget speech would not have happened without months of organizing communities hardest hit by generations of neglect,” said Emma Tai, Executive Director of United Working Families. “The multi-year organization that UWF has led alongside community and union partners to fund recovery, fund police and tax the wealthy now sets the terms for the city’s annual debate.”
However, the mayor’s budget actually increases the Chicago Police Department’s budget by $ 189 million in 2022 compared to the 2021 budget of $ 1.7 billion.
More than 75% of that increase – $ 142 million – will cover the cost of the salary increase requested in the new contract approved earlier this month by city council.
The remainder of the increase will provide more resources to officers with traumatic experiences while in service and recruit new staff to fill the department’s 1,066 vacant positions, including 877 sworn-in officer positions, officials said.
Even though Lightfoot has been at odds with the Progressive Aldermen for most of his tenure, his spending plan appears designed to win as many Progressive Caucus votes. It’s a marked change from last year, when Lightfoot’s $ 96 million property tax hike was passed with just two votes to spare.
“At first glance, there is a lot to look forward to,” Ald said. André Vasquez (40th arrondissement). “It sounds like a Christmas list of things people want.”
Ald. George Cardenas (12th Ward), the deputy head of the mayor who will be tasked with rounding at least 26 votes for the spending plan before the end of the year, said his colleagues’ low-key reaction to Lightfoot’s speech was understandable .
“People were shocked,” Cardenas said of the expenses described by the mayor. “Their demands are being met. Thank goodness of course for the federal stimulus money. ”
Lightfoot also offered to give the 50 aldermen $ 100,000 each to spend on micro-grants, telling them they were best equipped to help their communities recover from the pandemic.
This represents a new approach to budget negotiations for Lightfoot, who campaigned for mayor in 2019 on a promise to reduce the power of aldermen to make unilateral decisions as part of his efforts to reduce corruption at town hall. .
After the budget vote in 2020, Lightfoot set up a website lambasting those who voted no, and ahead of the budget vote in 2021, she told City Council Black Caucus members that they shouldn’t ” come see me for s—- for the next three years. ”
Three City Council Members – Alds. Patrick Daley Thompson (11th Ward), Ed Burke (14th Ward) and Carrie Austin (34th Ward) face federal charges. WTTW News reported that Ald. Jim Gardiner (45th Ward) is the subject of an FBI investigation into allegations of bribery and payment to gamble.
The city is expected to spend $ 3.4 million to set up an oversight board for the Chicago Police Department, according to the mayor’s plan.
Lightfoot also plans to use the city’s $ 25 million tax increase funding program to help close the budget deficit.
The city’s $ 12.8 billion 2021 spending plan allowed the city to automatically increase property taxes based on the rising cost of living. This will generate about $ 22.9 million in additional property tax revenue in 2022, officials said.
In addition, the city will increase property taxes by $ 25.5 million to start repaying the $ 1.4 billion that city council has agreed to borrow as part of the 2021 spending plan to repair streets, streets and buildings. Chicago’s crumbling sidewalks, bridges and shoreline.
Jack Lavin, CEO of the Chicago Chamber of Commerce, called on Lightfoot to rethink this plan.
“The current proposal calls for the second consecutive property tax increase in two years, all at a time when businesses are seeing their property assessments skyrocket for no clear reason,” Lavin said.
In addition to the pandemic, the city’s 2022 budget will also be squeezed by the surge in pension payments, with the city facing an estimated bill of $ 2.3 billion for its four funds, an increase of $ 255 million. dollars, according to budget projections.
The city needs an additional $ 275 million to send retroactive pay increases to the Chicago police. Most of that cost will be covered by a $ 1.2 billion debt refinancing plan, officials said.
In total, the pandemic has cost the city $ 1.7 billion, Lightfoot said.
Lightfoot’s budget proposal marks a shift in strategy from its original plan to stop the flow of red ink caused by the pandemic. In April, administration officials proposed using $ 965 million from the federal relief plan to pay off the city’s high-interest debt to balance its 2020 and 2021 budgets.
In addition to borrowing $ 465 million in 2021, the city’s spending plan for 2020 called for the city to borrow an additional $ 500 million, but the city rolled back those transactions after Congress approved the back-up plan.
However, US Treasury Department officials told cities and states that “payment of interest or principal on outstanding debt” would not be allowed, disrupting Lightfoot’s plans.
Lightfoot’s budget proposes to take money from the city’s business fund, which officials use to pay most of the city’s bills, to pay off that high-interest debt while using federal relief funds to keep the city’s bank account out of the red, officials said.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]