Acknowledging that time is running out on her effort to convince state lawmakers to help her plug the city’s massive budget gap, Mayor Lori Lightfoot unveiled her Plan B Tuesday, detailing $50 million in cuts and a total property tax hike of $65 million.
Lightfoot traveled to Springfield Tuesday to lobby for her plan to change the city’s Real Estate Transfer Tax from a flat tax to a graduated levy so that the city could bank an additional $50 million to plug the city’s $838 million budget shortfall.
However, with no support from Republicans and a demand from progressive Democratic lawmakers that Lightfoot earmark some of the new revenue to reduce homelessness in Chicago, in the Real Estate Transfer Tax appears unlikely to pass both the Illinois House and Senate before the Veto Session is scheduled to end Thursday.
Lightfoot said she had not given up hope that the proposal would make it through the General Assembly.
Chief Financial Officer Jennie Huang Bennett said she would plug the city’s remaining gap by revising the estimate of how much the city will save by refinancing $1.3 billion of the city’s debt. Instead of banking $200 million, the plan will save the city $215 million, Huang Bennett said.
The city will also save another $20 million by scaling back plans to fill positions left vacant after Lightfoot ordered a hiring freeze in August as the size of the city’s budget gap became clear, Huang Bennett said. Instead, the size of the city’s workforce will remain at the same level as it was in early 2019, she added.
The city will save another $15 million by cutting spending in several departments, including the mayor’s office.
During the budget hearings, several aldermen criticized Lightfoot’s proposed expansion of the mayor’s office, which had been set to see it’s budget grow by $3.8 million and 30 positions.
Instead, the mayor’s office will grow by $2.6 million, and a number of planned new positions will not be created, Huang Bennett said. However, the she said the mayor will continue to move forward on new violence prevention, sustainability and risk management initiatives.
City officials could not immediately identify which planned positions would be eliminated and how many had been axed.
The city also revised its projections for health care spending to save $6 million, Huang Bennett said.
In addition, the city now expects to spend $2 million less on overtime for the Chicago Fire Department, Huang Bennett said.
Those cuts and savings add up to approximately $50 million, enough to bridge the gap if state lawmakers leave Chicago’s Real Estate Transfer Tax unchanged.
But although most of the briefings for aldermen Tuesday focused on those cuts, several aldermen were shocked to hear that the city’s property tax levy will rise $65 million next year, including $18 million to reopen Chicago Public Library branches on Sunday afternoons and $15 million to capture property tax revenue from newly constructed homes and businesses.
The bulk of that increase — $33 million — was approved by aldermen in the spring, before Lightfoot took over from former Mayor Rahm Emanuel as part of an agreement to retire some of the city’s general obligation debt, Huang Bennett said.
Several aldermen told The Daily Line that they did not realize that they had approved a property tax increase. The jump was never discussed during City Council committee meetings or before the final vote.
City officials did not immediately provide more information about the details about the measure that approved the property tax hike.
Even though the fate of the city’s Real Estate Transfer Tax will have the biggest impact on the city’s budget, Lightfoot said she was most focused on asking state lawmakers to change the tax and fee structure of a Chicago casino to make it more attractive to investors and operators, and she has renewed her request to allow the city to own the casino. However, the city isn’t counting on gaming revenue until 2021.
House Speaker Mike Madigan (D-Chicago) said Lightfoot advocated for changes to the rules for a Chicago casino during a meeting of the Democratic Caucus.
“She did a good job,” Madigan said. “There were several comments they had never seen a mayor of Chicago in a House Democratic Caucus. They were very pleased about that.”
Lightfoot said changing the rules for a Chicago casino will boost the entire state’s economy, a pitch she’s making to Downstate lawmakers.
“Being down here is important,” Lightfoot said, adding that she traveled to Springfield Tuesday to build relationships with members of the General Assembly and advocate for Chicago. “Many of them didn’t know me before I ran. I’m a blank piece of paper to many of them.”
Jordan Abudayyeh, a spokesperson for Gov. JB Pritzker, said the governor and the mayor “had another productive meeting and conversation this afternoon, and he remains committed to encouraging members of the General Assembly to support the mayor’s priorities.”
Lightfoot said she expected the changes for a Chicago casino to be voted on Wednesday.
The governor will sign a bill changing the tax and fee structure of a Chicago casino if it reaches his desk, Abudayyeh said late Tuesday.
“Over the past several days, staff from the city, both the House and the Senate and the governor’s office have discussed the contours of a proposal, and there has been broad agreement from the parties,” Abudayyeh said. “Our understanding is that legislators will be filing a bill shortly, and the governor would encourage lawmakers to support it.”
However, state officials have yet to assure city officials they will get the $163 million in reimbursements from the federal government for ambulance rides through the Illinois Department of Healthcare and Family Services that Lightfoot is counting on.
Aldermen are set to take the first step toward approving the city’s $11.65 billion spending plan Tuesday, when they gather at 10 a.m. for a meeting of the full City Council and hold the required public hearing on the budget.
The City Council is scheduled to meet twice more before Thanksgiving to approve the budget, with the final vote set for Nov. 26.
Aldermen on Wednesday are set give final approval to a number of items:
- O2019-7985 — A labor agreement with the Policemen’s Benevolent & Protective Association of Illinois, which represents the Chicago Police Department’s sergeants, lieutenants and captains.
- O2019-8065 — A financial package to help A Safe Haven Foundation, a Lawndale-based nonprofit for veterans with substance use disorders at risk of homlessness, build a 90-unit affordable housing complex near Roosevelt Road and Sacramento Avenue.
- O2019-7127 — A lease agreement with U.S. Customs and Border Protection for data communications equipment at Midway International Airport.
- O2019-8101 — A lease and license agreement with Taking Flight Concessions LLC for concession and vending services at Chicago O’Hare International Airport Multimodal Facility.
- O2019-8006 — A measure from Ald. Marty Quinn (13) that would ban Airbnb or other home-sharing services from setting up shop in the 15th precinct of his ward.
- O2019-8021 — A measure from Ald. Patrick Daley Thompson (11) to ban home-sharing in the 31st precinct of his ward.
- O2019-8027 — A measure that would prohibit peddling in parts of the 3rd and 4th wards.
- O2019-6960; O2019-7999; O2019-6835 — Three measures to allow the sale of packaged liquor.
- A2019-69 — The appointment of Sulema Medrano Novak, a former Cook County assistant state’s attorney now working for the Smith Amundsen law firm, to the city’s Human Resources Board.
- A2019-96 — The appointment of Danielle Meltzer Cassel to the International Port District Board.
- A2019-95 — The appointment of Ivan Solis to the International Port District Board.
- (O2019-7925 — A measure to designate Chicago Avenue between Lake Shore Drive and Fairbanks Court in Streeterville for U.S.Supreme Court Justice John Paul Stevens, Chicago native who died in July.
- Aldermen are also expected to approve several items related to Special Service Areas, which levy taxes to boost neighborhood shopping districts including appointments, budgets and the expansion of two districts in the 5th, 6th, 8th and 9th wards.