By Rochelle Riffer
In a speech delivered on August 29, Mayor Lori Lightfoot announced that the City of Chicago faces a budget shortfall of $838 million for 2020. Her remarks were characterized as “A State of the City;” her detailed budget proposal will be presented to the City Council this month.
While emphasizing the city’s financial problems, Lightfoot began by listing her efforts to create good governance and trust. She highlighted her proposals for ethics reform, the hiring of a Chief Risk Officer and focus on neighborhoods. She wants a growth strategy for Chicago that will lift up those in poverty. Her aim is not to hurt people who can least afford it, but also not to drive business opportunity out of Chicago. Some policies she is putting in place include privatizing the workers’ compensation program, creating a Chief Risk Officer, imposing a hiring freeze, and cutting down on absenteeism and unbudgeted overtime.
According to the mayor, 1/3 of the shortfall is due to pension obligations; another 1/3 is for increased labor costs. $100 million is for interest on the debt, $90 million to settle projected lawsuits, and approximately $100 million for other unspecified costs. In addition to the current year pension debt, Chicago will owe an additional $500 million to the city’s four pension funds over the next few years. Lightfoot spoke about the need for pension reform at the state level, but did not identify what that would encompass. Read the mayor’s budget plan online.
Lightfoot did not list specific remedies for eliminating the debt, but general areas she is considering include a graduated real property transfer tax, expanded sales tax, and some kind of commuter tax. Monies from a casino and recreational marijuana sales could bring in some revenue. Most of these ideas require assistance from the State General Assembly. The alternative, hinted at, would be higher property taxes for Chicagoans.
City Residents Weigh In on the Budget
After presenting this dire warning about city finances, the mayor attended neighborhood town hall meetings in the following weeks to hear residents’ ideas for increasing revenues and cost savings. The most popular option for increasing revenue suggested by residents is to raise taxes on cigarettes. The least popular way is by raising property or sales taxes; residents overwhelmingly support a moratorium on both property and sales tax increases. For the most part, residents prefer that budgets remain the same for most city functions; they favor reducing budgets for only planning and development and cultural affairs. More than 7000 residents provided their input, as of September 25. Learn more >>
Other Budgetary Matters
Cook County Board President Toni Preckwinkle in July presented a preliminary budget forecast for the upcoming fiscal year. Cook County Commissioners held mid-year budget hearings with bureau chiefs, department heads, and other elected officials at that time. Margaret Herring prepared Observer Reports on these hearings for Cook County League.
Those interested in the budget process itself may wish to attend meetings of LWV Chicago’s City Government Committee, which is also focusing on the structure of city government. City Government Committee meetings are held on the first Monday of each month in the League Office.
Rochelle Riffer is a member of the City Government Committee.