Chicago Mayor Lori Lightfoot is pitching a $16.4 billion spending plan she’s dubbing Chicago’s “stability budget” as the city continues to recover from the COVID-19 pandemic.
In prepared remarks, Lightfoot said her budget continues to make investments in community violence prevention, reproductive health care, homeless prevention programs and other progressive initiatives, but it’s likely to face some criticism from activists and progressive aldermen, in part for increased spending to the police department.
The plan, Lightfoot says, includes $3.1 million for reproductive health care, an investment promise the mayor has made repeatedly since the overturning of the U.S. Supreme Court precedent protecting abortion rights, Roe v. Wade.
Lightfoot is also promising $5 million to help immigrants “given the recent increase in the need for resources available to support migrants coming to Chicago.” The mayor had previously promised to boost resources for immigrants being bused to Chicago by Republican Texas Gov. Greg Abbott.
“Budgets are not just math problems,” Lightfoot said in her annual budget address to aldermen Monday morning. “They are and must be value statements.”
The mayor’s budget will no longer include a 2.5% property tax hike as previously expected.
Lightfoot had previously announced her budget would likely bump property taxes by $42.7 million, and hit owners of a $250,000 property by about $34 next year. The increase, tied to the rate of inflation but capped at 5% under city ordinance, helps the city make its annual pension payment required under state law.
But days after Lightfoot was publicly criticized by some of her own allies on the council, she reversed course — saying in a statement last week the city will meet its pension obligation without a property tax increase, citing better-than-expected revenues in 2022 and rosy revenue projections for next year.
Ald. Pat Dowell, 3rd Ward, who leads the budgeting process for the City Council as chairman of the budget committee, says she thinks her colleagues will greenlight the spending plan when it comes time for a vote.
“Once you remove the property tax increase I think it takes a lot of pressure off all the aldermen who are going through election day,” Dowell said.
On Monday, Lightfoot said the city is expecting $260 million more in revenue in 2022 than initial estimates, allowing her to avoid the tax increase amid election season. She said that revenue boost, in addition to an upfront, $40 million payment from the developer of Chicago’s future casino is also helping the city close its $128 million projected budget deficit while paying the city’s underfunded pensions.
As Lightfoot delivered good news that she, in an election season, would forgo a property tax increase, she criticized previous mayors who’ve avoided politically-unpopular financial moves in election years.
“We absolutely cannot return to the practices of the past where officials made the politically expedient, but fiscally disastrous decisions to forgo telling our taxpayers the truth about the work it takes to meet our ongoing pension obligations, which includes using the tool of modest property tax increases,” Lightfoot said. “Those days must permanently remain in the past.”
In 2023, the city will spend $2.6 billion on its severely underpaid pension funds, according to budget documents.
This is the first year that revenue from Chicago’s future casino will help the city’s revenue projections — in the form of the $40 million upfront payment — but officials will eventually start to rely on $200 million in expected annual revenue once the gambling complex is up and running.
That will help the city make its yearly pension payments, but is nowhere near a panacea, as pension obligations continue to grow each year. In response, Lightfoot said she’s allocating $242 million to “a new pension fund policy of prepaying future pension obligations.”
“While we have made significant progress in our pension contributions, we are essentially making the minimum monthly payment on our pension credit card,” Lightfoot said. “We need to begin paying down that pension credit card so that we can stop paying compounded interest.”
“Tiny homes” and environment
Gearing up for a fight against progressive opponents in the 2023 election, Lightfoot says her budget includes spending on progressive priorities like violence prevention, mental health resources, climate change prevention and assistance to families.
“What I have asked this body to do over three prior years and now again today with a fourth successive budget is to be bold with me,” Lightfoot said in prepared remarks. “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.”
Much of that programming, though, continues to be propped up by a windfall of one-time $1.9 billion in federal COVID-19 stimulus funding. Those dollars helped the mayor deliver two signature progressive programs — an alternative 911 response program and a guaranteed basic income pilot — in addition to hundreds of millions more on community violence prevention, environmental justice and family assistance programs.
The city has until 2024 to allocate and until 2026 to spend its federal, COVID-19 relief dollars. Part of that spending this year will include a new “tiny home” program the mayor said will help address housing affordability.
“We must push ourselves to be creative,” Lightfoot said. “Tiny homes are an interesting innovation that we should embrace as a city.”
As the mayor made her proposal, homeless prevention advocates one floor below filled the lobby of City Hall with chants and tents, demanding the mayor invest more in affordable housing and homeless prevention. Advocates have long been pushing for a plan they call “Bring Chicago Home” that would increase a tax when property over $1 million in the city is sold, in order to create a revenue stream dedicated to homeless prevention.
Lightfoot’s also pitching an Office of Climate and Environmental Equity within her office — perhaps in an attempt to perhaps assuage activists upset that she hasn’t made good on a campaign promise to create an entire department dedicated to the environment.
The new office will spend $640,056 to create six full-time positions.
Progressive Caucus Chair Sophia King, 4th Ward, who is running against Lightfoot for mayor, was quick to say a team within the mayor’s office isn’t enough to address the climate and environmental challenges facing Chicago.
“No, we definitely need a department of environment. We need a department of gun prevention as well,” King said. “People show what their priorities are in where they put their money and how they structure their administration.”
Lightfoot will also likely face criticism from a chorus of progressive aldermen and activists for again increasing spending within the police department. Lightfoot has long denounced the phrase “defund the police” and has reiterated she thinks investing in the police department is one tool to help decrease crime.
The police department’s budget has grown from $1.65 billion in 2019, to a proposed $1.94 billion this year — a 17% increase since Lightfoot took office. Budget documents show the department’s priorities next year include increasing the rate at which police solve crimes and recruiting diverse candidates to the department.
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.
This story has been updated to correct the deadline by which the city has to allocate COVID-19 federal relief funds. The city has until the end of 2024 to do so.
Mariah Woelfel covers city government for WBEZ. Follow @mariahwoelfel.