Mayor Lori Lightfoot is set to unveil a spending plan later Monday that is expected to boost funding for police as she seeks to move Chicago past the ongoing pandemic and to address rampant gun violence.
Last month, Lightfoot laid out a $733 million budget shortfall for 2022. The plan to close the gap is unlikely to include a sizable property tax increase. Instead, she is expected to propose filling the budget hole by refinancing outstanding debt and using one-time money from the federal American Rescue Plan.
Without a significant property tax hike, Lightfoot may have an easier time getting her budget passed than she did last year. But the mayor will likely face increased pressure from aldermen and activists who want her to spend more from the nearly $2 billion the city is receiving from President Joe Biden’s American Rescue Plan package to fill the hole and fund favored programs.
Also likely to be at issue is the best way to address the city’s violence, which has remained elevated after surging in 2020 to some of the highest levels in decades. In August, Lightfoot said she plans to boost funding for cops after last year’s spending plan cut officer positions.
Chicago’s structural deficit will also continue to grow in 2022 because of state-imposed requirements for the city to increase funding for its pension funds. Long-term, Lightfoot hopes to use revenue from a Chicago casino to help address that problem, but the plan faces an uncertain future as the city has struggled to attract interest in the casino project.
Since becoming mayor, Lightfoot has also spoken about the need for pension reform, though she hasn’t made headway on that in Springfield or unveiled a plan of her own while focusing on more immediate pandemic-related financial problems. But the pension payments will continue to increase to around $2.3 billion in 2022 and eat up more of the annual budget, adding pressure on the city’s finances.
Lightfoot has made clear she doesn’t intend to use all the funds from the federal rescue plan on the upcoming budget shortfall, saying in August that to do so would be “utterly irresponsible, ineffective, and leave us with nothing to support ourselves, God forbid another crisis strikes our city.”
After announcing in a televised August 2019 speech that Mayor Rahm Emanuel had saddled her with an $838 million deficit for 2020, Lightfoot said she made structural changes to cut costs through so-called zero-based budgeting and by eliminating vacant positions.
The mayor also turned to several one-time fixes to close the gap rather than calling for large-scale revenue increases such as property tax hikes that would have hit broad swaths of Chicagoans and been difficult politically.
Many aldermen were happy there was no big property tax jump in the mayor’s proposed budget for 2020, and passed her package 39-11. But some of them wondered privately why she didn’t leverage her popularity coming off her election win to ram through a hike then rather than waiting until later in her term.
Last year, Lightfoot scored a relatively narrow but important victory as the City Council adopted her $12.8 billion budget for 2021, which included a $94 million property tax hike and controversial debt refinancing to help close a $1.2 billion deficit. She called it her “pandemic budget.”
Aldermen voted 28-22 in support of the property tax increase and passed the full budget by a 29-21 vote.
That budget also included a provision to raise property taxes annually by an amount tied to the consumer price index. It raised gas taxes by 3 cents per gallon and relied on an increase in fines and fees collection, including a plan to boost revenue by ticketing residents who are caught going 6 mph over the limit by speed cameras.
In addition, Lightfoot asked to refinance $501 million in city debt for the 2021 budget, which would provide a jolt of new revenue next year but likely cost taxpayers more down the road. Similar borrowing tactics under Mayors Richard M. Daley and Rahm Emanuel drew deep criticism.
Behind the scenes, Lightfoot worked hard last year to generate support for her budget. In a meeting with the Black Caucus, Lightfoot told aldermen that those who don’t support her budget shouldn’t expect their wards to be prioritized and added, “Don’t come to me for s--- for the next three years” if they didn’t support her spending plan.
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