Lightfoot looks to improve the economy and uses federal aid funds to balance the budget | Chicago News
Mayor Lori Lightfoot’s plan to fill a projected budget gap of $ 733 million in 2022 is based on $ 385 million in federal aid, about $ 298 million in savings and cuts and betting that the economy of the City will improve quickly, the COVID-19 pandemic is finally subsiding.
Lightfoot said the spending plan would include “no new taxes or significant fee increases” for Chicago residents.
The plan also uses federal aid to fill a $ 950 million gap in the city’s 2020 and 2021 budgets caused by the economic collapse sparked by the coronavirus pandemic.
The city originally planned to take on high-interest debt to avoid cutting city services, but reversed those plans when President Joe Biden signed a federal aid package in March.
Overall, Lightfoot’s proposal calls for $ 1.3 billion, or approximately 68% of the city’s share of the federal relief fund, to cover the cost of providing city services and paying city workers in 2020, 2021, and 2022 to cover during the pandemic and compensate for lost revenue during the economic collapse.
This includes $ 152 million that the mayor has proposed through 2023 as a hedge against a further rise in the COVID-19 pandemic, which is still spreading at high transmission rates in Chicago due to the more contagious Delta variant.
But with the rest of the federal aid package, Lightfoot proposed funding a wide range of programs designed to help Chicago recover from the pandemic-sparked disaster and end the wave of violence affecting the south and west sides recorded.
“On the eve of the 150th “To build a better city, we need to invest more in our people, our families and our neighborhoods. Fundamental, transformative investments. ”
The largest investment proposed by the mayor would provide $ 31 million to fund a pilot program that provides direct cash payments to “hard-hit, low-income households in need of additional economic stability,” Lightfoot said.
That would launch the largest direct cash aid program in the United States, Lightfoot said.
Ald. Gilbert Villegas (36th Ward) unveiled a plan in April to use $ 30 million from the federal government to send $ 500 a month to 5,000 families for a year only to see it from members The City Council’s Black Caucus, who said it was a no-start, as the city is yet to develop a plan to pay reparations to the descendants of enslaved African Americans.
“Imitation is the most sincere form of flattery,” said Villegas.
Additionally, Lightfoot suggested using $ 15 million from the federal aid package to send mental health professionals to help Chicago residents call 911 during a mental crisis. In total, Lightfoot will spend an additional $ 52 million in its 2022 budget on expanding mental health services in Chicago.
The city will also spend $ 240 million on affordable housing in 2022. This will create and modernize more than 4,000 homes for low- and middle-income Chicago residents, according to the mayor.
“I think it’s pretty clear that the people in the administration copied this coalition’s homework,” Ald said. Carlos Ramirez-Rosa (35th Ward) said in relation to initiatives supported by United Working Families, a progressive political group. “This coalition has been calling for certain investments for months to ensure that the US bailout dollars the city receives are spent on the things our communities need.”
United Working Families leaders, who called for the bulk of the federal aid package to fund programs to house uninhabited Chicagoans and provide direct assistance to those struggling during the pandemic, declared victory after the mayor’s announcement.
“Today’s budget address would not be possible without months of organizing the communities hardest hit by generations of neglect,” said Emma Tai, executive director of United Working Families. “The multi-year organization that the UWF ran with community partners and workers to fund reconstruction, relieve the police and tax the rich, is now setting the terms for the city’s annual debate.”
However, the mayor’s budget actually increases the Chicago Police Department’s budget by $ 189 million in 2022, compared to the 2021 budget of $ 1.7 billion.
More than 75% of that increase – $ 142 million – will pay for the cost of the raise called for in the new contract approved by the city council earlier this month.
The remainder of the increase will allocate more resources to officials suffering from traumatic experiences on duty and hire new staff to fill the department’s 1,066 vacancies, including 877 sworn officer positions, officials said.
While Lightfoot has been at odds with progressive Alder people for most of her tenure, her spending schedule seems tailored to attract as many votes from the Progressive Caucus. That’s a big change from last year when Lightfoot’s $ 96 million property tax hike was passed with just two votes.
“When you see it at first glance, there are a lot of things to hope for,” said Ald. André Vasquez (40th district). “It looks like a Christmas list of things people want.”
Ald. George Cardenas (12th district), the mayor’s deputy chairman, who is due to have at least 26 votes for the spending plan before the end of the year, said the muted reaction of his colleagues to Lightfoot’s speech was understandable.
“The people were shocked,” said Cardenas about the expenses outlined by the mayor. “Your demands will be met. Thank God, of course, for the federal economic stimulus money. ”
Lightfoot also suggested giving all 50 city councils $ 100,000 each in micro-grants, telling them they were best equipped to help their communities recover from the pandemic.
This represents a new approach to budget negotiations for Lightfoot, who ran for mayor’s office in 2019 and pledged to reduce the councilors’ power to make unilateral decisions as part of their efforts to reduce city hall corruption.
After the 2020 budget vote, Lightfoot launched a website blowing up those who voted no, and before the 2021 budget vote, told members of the city council’s Black Caucus that they were “for the next three shouldn’t come to me “. Years.”
Three members of the city council – Alds. Patrick Daley Thompson (11th Ward), Ed Burke (14th Ward) and Carrie Austin (34th Ward) face federal charges. WTTW News reported that Ald. Jim Gardiner (45th Ward) is under investigation by the FBI on charges of bribery and pay-to-play.
The city will spend $ 3.4 million on the mayor’s plan to set up an oversight body for the Chicago Police Department.
Lightfoot also plans to use $ 25 million from the city’s tax hike funding program to fill the budget gap.
The city’s $ 12.8 billion spending plan for 2021 authorized the city to automatically raise property taxes in response to an increase in the cost of living. This will generate around $ 22.9 million in additional property tax revenue in 2022, officials said.
In addition, the city will raise property taxes by $ 25.5 million to pay off the $ 1.4 billion the city council raised as part of the 2021 spending plan to repair Chicago’s crumbling streets, sidewalks, bridges and shoreline .
Jack Lavin, the CEO of the Chicago Chamber of Commerce, urged Lightfoot to reconsider this plan.
“The current proposal calls for the second consecutive increase in property tax in two years, and all at a time when companies are seeing their property tax assessments soar for no clear reason,” said Lavin.
In addition to the pandemic, the city’s budget will also be slashed by rising pension payments in 2022 as the city faces an estimated $ 2.3 billion bill for its four funds, which is an increase of $ 255 million according to budget projections.
The city needs an additional $ 275 million to send retroactive salary increases to Chicago police officers. Most of these costs will be covered by a $ 1.2 billion debt refinancing plan, officials said.
In total, the pandemic cost the city $ 1.7 billion, Lightfoot said.
Lightfoot’s budget proposal marks a shift in strategy from its original plan to halt the flow of red ink caused by the pandemic. In April, administration officials suggested using $ 965 million from the federal aid package to pay off the city’s heavy interest debt that the city raised to balance its budgets in 2020 and 2021.
In addition to raising $ 465 million in 2021, the city’s spending plan for 2020 saw the city borrow an additional $ 500 million, but the city canceled those transactions after Congress approved the aid package.
However, Treasury officials told cities and states that “paying interest or principal on outstanding debt” is not allowed, which upset Lightfoot’s plans.
Lightfoot’s budget calls for funding from the city’s corporate fund, which officials use to pay most of the city’s bills to pay off that high-yield debt, while federal aid money will be used to help the city’s bank account out of the red officials said.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]