Lightfoot’s proposal would grow the budget by $1 billion next year, from $10.7 billion to $11.7 billion. The increase is largely due to higher required pension payments, a larger budget for legal settlements and more generous salaries and benefits.
On Monday, the City Council’s 50 neighborhood mini-mayors, as they are sometimes called, will get to grill Lightfoot’s top financial advisers. That kicks off two weeks of department-by-department budget hearings before aldermen give final approval of the budget, set for late November.
Here’s what to expect during the first week of budget hearings.
Bigger problems, bigger budget
Chicago’s annual pension payments jumped significantly this year, and so did the city’s corporate fund (i.e. the checking account used to pay for day-to-day operations). It grew by $650 million, from $3.82 billion to $4.47 billion, the largest increase in recent history. Half of that is due to pension payments increasing. The other half comes from new initiatives, a bigger budget for legal settlements and higher salaries and benefits for city employees.
“It’s a little bit bigger because the pension costs have gone up and then there’s some natural growth, but it’s not inordinately larger than previous years,” said Jennie Huang Bennett, Chicago’s Chief Financial Officer.
Under Mayor Rahm Emanuel, the corporate fund grew by about $250 million between 2014 and 2015 after City Council approved a massive and unpopular property tax hike to pay for pensions.
2020’s budget doesn’t bet on casino money
Monday also marks the start of the Illinois General Assembly’s veto session. Indeed, Lightfoot does want help from state lawmakers in Springfield, particularly for securing a Chicago casino that could generate revenue for years to come.
But the 2020 budget is conservative in what it actually counts on. In fact, there is not a single penny expected to come into city coffers from a casino next year. The mayor wants the state to make a Chicago casino viable so that the city can use it to raise revenue for pensions.
“The casino isn’t about 2020,” Bennett said. “It does take time to build a casino after you get authorization so even though it’s not 2020 money, it’s something we need now to address our challenges in the out years.”
Lightfoot also wants state lawmakers to give the city permission to enact changes to its tax on home sales. Her budget counts on $50 million in revenue from a tax on expensive home sales. That amount is only based on six months’ worth of revenue, meaning state lawmakers could wait until spring session to act.
There is a (small) property tax increase
Despite all the rhetoric about ‘no property tax increase,’ homeowners should expect an increase in their bills next year.
The city is proposing to raise its tax levy for the Chicago Public Library by $18.4 million. Lightfoot said that amounts to about $46 more each year for the average homeowner.
“What we’ve heard from people all over the city is we want more expanded library services and in particular this would be going to hire the additional personnel that we need to have Sunday hours all across the city,” Lightfoot said.
Rahm Emanuel made the unpopular move to cut back on the public library hours early in his first term. The budget hearing for the Chicago Public Library is Wednesday.
Fines, fees, water billing relief
Tuesday’s hearings will include departments who will be making changes to some of their practices as a result of WBEZ’s reporting.
The first hearing of the day will be for City Clerk Anna Valencia’s office. Earlier this year she announced sweeping changes to how people pay for their vehicle city stickers, and to the fines and fees for not having one. The changes stem from a WBEZ and ProPublica investigation that found the city’s ticketing system put hundreds of Chicagoans into bankruptcy every year and disproportionately hit communities of color and the poor.
Likewise, the Department of Water Management will face aldermen in the afternoon. Lightfoot’s proposal to offer relief to residents struggling to pay their water bills follows a WBEZ and American Public Media investigation into rising water costs. It found Chicago had nearly tripled the cost of water in recent years. The increases hit the poorest residents the most and led to a staggering number of water shutoffs.
Becky Vevea covers city politics for WBEZ.