Chicago Mayor Lori Lightfoot is proposing a $16.7 billion spending plan she’s calling her “Recovery Budget,” which her office says includes no major new tax increases and is propped up in part by a nearly $2 billion dollar windfall of federal stimulus money.
“Our first step in this time of lost revenues is closing our gaps in lost revenue for 2021 and addressing the deficit for 2022,” Lightfoot said in her budget address to council members Monday. “And we propose to do this without any new taxes, no reduction in city services, and no layoffs.”
Earlier this year, Lightfoot announced the city was facing a $733 million budget shortfall driven by debt, pension payments and a new contract with Chicago’s largest police union. The mayor’s office says it will close that gap with $298.2 million in “savings and efficiencies,” as well as $491.1 million in additional revenues, including from unused tax increment financing dollars and federal stimulus money.
In her speech, the mayor touted she was striking her new budget without “any new taxes,” but details show she is increasing the property tax levy by more than $76 million, which the city says is tied mostly to automatic increases approved in the past and would be partially captured by new property being built or located in expiring tax-increment financing districts. The levy is the total amount of property tax revenue the city plans to collect from all taxable property within city limits, while a homeowner’s individual property tax bill is their share of the total levy based on their home’s assessed value.
The formal budget address Monday kicks off a series of budget hearings and debate with city departments, aldermen and the mayor. The budget needs to be approved by the end of the year.
As the mayor faces increasing concerns about public safety and the city faces rises in violence not seen in decades, the mayor’s proposal includes an 11% increase in spending for the Chicago Police Department.
The mayor had for months promised to increase police spending to deal with the city’s increase in murders and shootings, but her proposal is likely to still face pushback from a chorus of activists and aldermen who are calling to divert funds from police and instead spend more on social support services.
The progressive political group United Working Families, which has pushed for a windfall of federal stimulus money to go to Chicago families devastated by the pandemic, quickly criticized the mayor’s decision to increase police spending.
“And when you look at the details, you see more of the same failed policies that have harmed poor and working-class communities of color for generations: a shell game to use federal relief dollars to pay bank interest. An increase in funding to the Chicago Police Department,” Executive Director Emma Tai said in a statement.
While the mayor announced over the summer she’d use about $782.2 million of a $1.9 billion dollar federal spending package on closing out 2021 in the black, she outlined Monday how she wants to use $1.1 billion in remaining stimulus funds.
Lightfoot proposed spending $385 million of that money toward replacing expected loss revenue to pay for essential city services. She also proposed spending hundreds of millions of federal grant money on supportive social services, including $126 million in assistance to families programs — including $71 million in aid for undocumented residents and domestic workers, among others; another $103 million in health and wellness programs, including aid for new moms and an alternative mental health response to 9-1-1 calls; and another $85 million on violence prevention programs.
Lightfoot’s proposal also includes about $188 million toward climate issues, including retrofitting city buildings with renewable energy sources and planting 75,000 new trees.
Lightfoot started her budget address painting the importance of investing in communities dealing with disproportionate rates of violence, addiction issues or life expectancy gaps caused by systemic racism.
“But we must be honest and recognize that the fault lines revealed during the pandemic were actually decades in the making, borne of persistent, intentional acts dating back to our earliest days,” the mayor said. “…Rampant, unchecked opioid and heroin use that leaves some areas of our city looking like a scene from the Walking Dead—don’t tell me that just rose up organically.”
Lightfoot’s proposal also includes spending $635 million of corporate funds and federal stimulus money on affordable housing initiatives.
The mayor said her plan for federal stimulus spending — pegged as her Chicago Recovery Plan released Monday in conjunction with the budget — is driven by two principles: investing in families and neighborhoods, and in Chicago’s “economic engine” to support recovery from the pandemic.
While the mayor’s budget seemed to be well received by aldermen Monday, many said they’re eager to dig into the 595-page proposal.
“I want to make sure that the money from most of the [federal] funds is put out to the community. I’m not adverse to some of it being used on debt or taxes … but I think most of it should go out into the community. I haven’t read it in that much detail, the line items,” said Ald. Sophia King, 4th Ward, who chairs the council’s Progressive Caucus.
Another progressive alderman, Andre Vasquez, 40th Ward, who put out an independent budget more than a week ahead of the mayor’s address, said he feels the mayor incorporated input from him and progressive colleagues.
“I think it shows that the work and voice of grassroots groups, the public, the Progressive and Latino Caucus has been heard by the Mayor, but ultimately the devil’s in the details, and we will have to dig in line by line to see what’s actually being proposed,” he said.
Lightfoot’s 2021 budget passed 29 to 21 last year. Her administration managed to close a $1.2 billion shortfall with a $94 million property tax increase, parking meter rate increases and debt restructuring.
WBEZ’s Claudia Morell contributed.
Mariah Woelfel covers Chicago city government at WBEZ. You can follow her at @MariahWoelfel.