Mayor Lori Lightfoot urged the City Council Monday to “be bold with me ... to continue to right historic wrongs” that have created two Chicagos: one for the haves, the other for the have-nots.
“Neglect is not only morally wrong. It is also fiscally foolish. ... We have all been carrying a heavy burden for our decades of neglect, whether we acknowledge it or not. It shows up in the billions that we have spent on policing and incarceration. ... It shows up in the trauma that shrouds too many of our homes and neighborhoods,” Lightfoot told the council.
“What I have asked this body to do over three prior years and now again today ... is to be bold with me. To continue to right historic wrongs so that all of our residents who call this beloved city home will benefit and be able to fulfill their God-given potential.”
Delivering the 2023 budget address that will serve as her reelection platform, Lightfoot called for new and continued investments intended to ease the intransigent problems of violence, homelessness and poverty.
Still flush with cash from the $1.9 billion avalanche of federal coronavirus relief funds, Lightfoot’s proposed $16.4 billion budget includeskk:
• $100 million for public safety, including $36 million for consent decree compliance, new police helicopters and replacing the Chicago Police Department’s aging vehicle fleet.
• $242 million to launch what she called a “new pension fund policy of pre-paying future pension obligations.”
Although Chicago has managed to climb the $1 billion ramp toward actuarially-based funding of its four city employee pension funds, Lightfoot said the city is still “essentially making the minimum monthly payment on our pension credit card.”
“We need to begin paying down that pension credit card so we can stop paying compounded interest,” she said.
“This new funding will save the city $2 billion in reduced future pension contributions as well as approximately $30 million in preserved assets, based on current market performance.”
The 2023 budget includes $2.6 billion in contributions to the four pension funds, up $334.3 million from last year. That includes a $40 million up-front payment tied to Bally’s plan to build a permanent casino in River West and a temporary gambling hall at Medinah Temple in River North.
• $200 million to prevent homelessness, $155 million for affordable housing and $3 million to launch a “Tiny Homes initiative.”
• $5 million to support immigrants shipped to Chicago from Texas and other states and $3 million for “reproductive services” tied to the influx of women descending on Chicago seeking abortions outlawed in their home states.
• $10 million to improve technology infrastructure.
• Partly delivering on her campaign promise to re-establish the Department of Environment abolished by former Mayor Rahm Emanuel, though with a six-employee section in her office — not a full-blown city department. The Mayor’s Office of Climate and Environmental Equity will “steer our climate and environmental justice agenda,” she said.
• More fine and fee reforms, this time focusing on helping businesses and individuals saddled with administrative hearing debt.
In her address, Lightfoot touted the $31.5 million Guaranteed Minimum Income pilot program delivering $500 a month to 5,000 of Chicago’s neediest families for one year — without saying whether it will be renewed.
Her budget proposes 14,093 employees for the police department, but mentions no incentives to stop the exodus of officers. CPD now has 11,623 sworn officers, compared to 13,353 shortly before Lightfoot took office.
Overall, the CPD budget is up slightly, to $1.77 billion, from $1.699 billion last year, with only $100 million set aside for police overtime. Two years ago, CPD spent $130.4 million on overtime with a relentless string of canceled days off.
The Chicago Fire Department budget, however, is down to $771 million from $775.5 million, with $45 million set aside for overtime. Two years ago, CFD racked up $75.4 million in overtime spending.
The budget includes a $395 million tax increment financing surplus, the largest in Chicago history and $124 million larger than last year’s TIF surplus. Of that money, $218.4 million is earmarked for Chicago Public Schools and $98.3 million for the city’s corporate fund.
Lightfoot is also carrying over $220 million from this year’s budget surplus — compared to just $50 million a year ago — and counting it as revenue in 2023. That could spell trouble for whomever wins the mayoral election.
Monday, Budget Committee Chair Pat Dowell (3rd) branded it a “fairly easy budget” to swallow and support.
“Once you remove the property tax increase, it takes a lot of pressure off of all the aldermen who are going through election day,” Dowell said.
Dowell called the pension pre-payment plan a “novel idea” worth considering, though some alderpersons undoubtedly will argue the $242 million would be better spent on human services.
Civic Federation President Laurence Msall was positively giddy about the mayor’s decision to cancel the cost-of-living property tax hike, steer clear of other tax increases and make an unprecedented investment in solving Chicago’s $34 billion pension crisis.
“They are planning to make a quarter of a billion extra contribution to the city pension funds — above the statutory and actuarial-based contribution. That’s really good news and a wise investment,” Msall said.
“It’s a great idea if you have extra money to put it in the pension funds. We would like to see comprehensive reform in Springfield. We’d like to see more consolidation of the funds. But while we’re waiting for that to happen, making sure that the funds, which are hitting a pretty bad year, [don’t] have to sell assets — that they’ll have enough money to make their payment long-term — that will be positive.”
Mayoral challenger Ray Lopez (15th) denounced Lightfoot’s budget as “$16 billion in fiction” and a “continuation of the bloated, smoke-and-mirrors budgeting” that has relied so heavily on debt and “one-time revenues from the federal government.”
“The questions that I have is, how is this budget sustainable? What are we actually delivering? And is there any truth to what she keeps throwing out there in terms of things that are actually getting done?” Lopez said.
“Increased violence reduction [spending] has not reduced violence. Increased investment in communities has resulted very minimal investments and actual groundbreakings. We hear a lot of headlines, but we’re not seeing a lot of results.”
Mayoral challenger Sophia King (4th) argued that what Chicago really needs is an Office of Violence Prevention.
“I’ll be looking for what we’re gonna do with crime. It’s out of control,” King said.
“Also, we’ll be looking at last year’s budget to see how we spent the money that we said we were gonna spend on crime before. ... I don’t want to throw good money after bad. I want to make sure we’re making good use of the money that we already spent.”
Last week, Lightfoot made the job of passing her pre-election budget a heckuva lot easier by scrapping plans for a $42.7 million property tax increase — half what an automatic escalator would have allowed.
The abrupt about-face was the political equivalent of saying, “You can’t fire me. I quit.”
Just one day earlier, the mayor’s own political allies had warned that tax increase would be dead on arrival in the council.
Instead of driving head-first into that brick wall of opposition, Lightfoot took the political path of least resistance, citing city revenues she expects to rebound at a rate $200 million higher than city estimates for 2023.
Now, all she has to do is explain away the hypocrisy of ignoring her own mantra, reiterated just two months ago.
“For years, mayors in this town wouldn’t make the tough decisions around funding pensions properly, so pensions became grossly underfunded. We’d skip property tax increases every single year. And then, suddenly, year after year, you’d have the highest property tax increase in the history of the city. That benefited no one,” Lightfoot said then.
“It’s easy in an election year to say, ‘Let’s do nothing.’ But our pension obligation continues to grow year after year. So if we do nothing, be sure, taxpayers, they’re coming back for you later.”
After Lightfoot’s retreat, Ald. Anthony Beale (9th), one of Lightfoot’s most outspoken Council critics, warned Chicago taxpayers to hold onto their wallets.
“If you lose, then it’s the next person’s problem to deal with. If you win, then you come back and do a mid-year adjustment to the budget,” Beale said.
“Either way, there’s no way you can wipe out that amount of money without being Houdini. ... This budget has been padded. Projections are being over-inflated to accomplish the goal. And the goal is to get re-elected.”
Last year, Lightfoot’s $16.7 billion budget sailed through the Council 35-15, thanks to an avalanche of federal relief funds allowing an unprecedented, 30% increase in city spending.
The vote to raise Chicago’s property tax levy by $76.5 million — after a $94 million hike in real estate taxes the year before — was 32 to 18.
That increase included $22.9 million kicking in automatically, 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.” Not counting new property, the cost of the increase to the owner of a home valued at $250,000 was $38 a year.
Lightfoot easily sloughed off a demand from downtown Ald. Brian Hopkins (2nd), the Hispanic Caucus and business leaders to repeal the automatic escalator.
Chicagoland Chamber of Commerce CEO Jack Lavin on that day said businesses were contending with skyrocketing property assessments that had pushed up their property tax bills. Lavin noted many businesses are “still struggling” after months of “extra safety costs, capacity restrictions, ever-growing public safety concerns” and overall uncertainty.
“Chicago’s business community needs to see more direct support, an immediate plan to fill police vacancies and bolster public safety ... and a stop to these annual increases,” he said.
What the mayor called a “once in a lifetime opportunity to transform” Chicago allowed Lightfoot to again play Santa Claus — even after using about two-thirds of federal relief money to replace revenues lost to the pandemic in 2020 and 2021. She salted away $537.4 million for 2022 and 2023.
Last month, Canadian pension plans controlling the Skyway sold their one-third stakes for a handsome profit that valued the overall roadway at $4 billion, courtesy of drivers forking over tolls that have risen steadily since the city leased it to private operators in 2005.
The latest ownership change is expected to generate a roughly $25 million windfall for Chicago taxpayers.
The mayor’s office has refused to say how the money would be used, only that the latest sale is a “win for the city, generating a tax payment in the tens of millions of dollars.”
