Aldermen balk at Lightfoot’s proposal to raise property taxes and spend federal relief | Chicago News

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For months, progressive members of Chicago’s city council have prepared to wage a merciless battle to convince Mayor Lori Lightfoot to spend every cent of the $ 1.9 billion Chicago earmarked from federal COVID-19 relief funds. in direct aid to struggling Chicagoans and small businesses.

Lightfoot and his finance team had repeatedly said the responsible thing to do with this windfall was to use the bulk of these funds to fill gaps left in the city’s 2020 and 2021 budgets, which were decimated by the economic disaster caused by the pandemic.

So many aldermen were caught off guard this week when the the mayor’s budget plan essentially offered a simple solution: why not both?

In total, Lightfoot’s proposal sets aside $ 1.3 billion, or about 68% of the city’s share of federal relief funds, to cover the cost of providing city services and paying workers. municipalities between 2020 and 2023 to compensate for the loss of revenue due to the economic collapse triggered by the pandemic.

At the same time, Lightfoot offered to spend an additional $ 1.9 billion as part of its Chicago stimulus package on a host of priorities championed by progressives, including affordable housing, mental health, prevention of violence, youth employment programs and helping homeless Chicagoans.

In order to fund these programs, the mayor offered to borrow an additional $ 660 million – even as the city pays off other high-interest debts it incurred last fall as the second wave of the pandemic reached. its peak.

Pressed by city council members about the wisdom of the plan Friday during the first day of two weeks of budget hearings, CFO Jennie Huang Bennett defended the mayor’s spending plan as a thoughtful plan for ” build a bridge to financial stability as the economy continues to recover.

While the city shouldn’t borrow at high interest rates to pay for daily expenses, such as a family that has to take out a payday loan to do groceries, some forms of borrowing make sense, said Huang Bennett. .

“It’s good debt, like taking out a mortgage to buy a house,” said Huang Bennett.

But several aldermen were not convinced, especially as the delta variant of COVID-19 and low vaccination rates continue to prolong the pandemic and complicate efforts to put the city’s economy back on solid financial footing.

“We have a full list of the items we make, and if things start to look awesome, what do we cut? Ald asked. Jason Ervin (28th Ward.) “What don’t we do to keep the essentials?”

The $ 660 million in borrowings will be used for infrastructure projects and other one-time spending to ensure these costs do not inflate budget deficits for years to come, said Huang Bennett.

Ald. Matt Martin (47th Ward) was one of many elected to ask Huang Bennett and budget director Susie Park to detail their plans to deal with the huge deficits that city finance officials expect until 2024 – even under the best financial circumstances – once all federal relief is spent.

“What happens when we hit the cliff? Martin asked.

Huang Bennett said the city plan was developed based on conservative estimates of the city’s ability to emerge from the pandemic for good and was designed to reap benefits for the city by creating more jobs and reducing crime.

“We think we’ve struck the right balance,” said Huang Bennett.

Even if Lightfoot said “Chicago tonight” on Monday that his spending plan was expected to win “overwhelming support from city council members,” he immediately ran into turmoil as aldermen rejected his request – splashed all over social media – that the budget did not include “any new tax”.

The city will increase its property tax by $ 76.5 million in 2022, if Lightfoot’s plan is approved as planned by the end of October.

That increase includes about $ 22.9 million in higher property taxes linked to a rise in the cost of living, which was approved by city council as part of the 2021 spending plan.

In addition, the city will increase property taxes by $ 25.5 million to start repaying the $ 1.4 billion that city council has agreed to borrow as part of the 2021 spending plan to repair streets, streets and buildings. Chicago’s crumbling sidewalks, bridges and shoreline.

Another $ 28.6 million in revenue will go to city coffers from property taxes paid by newly built homes and businesses.

The total proposed increase will add $ 38 per year to the tax bill for a homeowner worth $ 250,000, according to city officials. Last year, city council approved an increase of $ 93.9 from $ 56 per year for a house valued at $ 250,000.

“There is an increase in the property tax,” Ald said. Matt O’Shea (19th Ward), who was chosen by Lightfoot to lead the City Council Aviation Committee. “We should explore other ways to get this increase in this budget because obviously people are struggling right now.”

Ald. Harry Osterman (48th Ward), who was chosen by Lightfoot to lead the city council’s housing committee, also urged his colleagues to rethink the plan.

“I know that thanks to last year’s budget and the ordinance, it allows us to do this, but the question is, given the financial conditions of our situation as a city, the question is, should we do this ? Osterman asked.

Several city councilors lobbied Park and Huang Bennett over the growing number of vacancies in the Chicago Police Department. As of Friday, 703 officers have retired in 2021, Park said.

The police department will run as many academies as possible to fill those positions, officials said.

Several city council members urged officials to detail Lightfoot’s plan to give the 50 aldermen $ 100,000 each to spend in micro-grants to help their communities recover from the pandemic.

Ald. Andre Vasquez (40th Ward) said the program could be “open to abuse” and could become a “slush fund” for aldermen to reward their friends and supporters.

Ald. Walter Burnett (27th Ward) said it could create headaches for aldermen, even with the best of intentions.

“We love to play Santa Claus,” Burnett said. “But I never give anything unless I can give it to everyone.”

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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