OCT 22, 2021
Aldermen give initial OK to property tax hike, borrowing proposal to fund Chicago Recovery Plan
Budget Director Susie Park [left] and Chief Financial Officer Jennie Huang Bennett answer questions during a finance committee meeting on Thursday.
Several aldermen initially balked on Thursday before advancing an ordinance giving the city the greenlight to borrow $660 million to help fund Mayor Lori Lightfoot’s proposed Chicago Recovery Plan, saying they don’t trust city officials to fully carry out plans for the money in their respective wards.
Members of the City Council Committee on Finance ultimately voted 27-3 to approve Lightfoot’s bond ordinance (O2021-4788), which in part paves the way for the city to take on debt so it can bolster funding for affordable housing, expand the city’s tree canopy and rehab neighborhood parks through the Chicago Recovery Plan.
The finance committee also narrowly voted during its Thursday meeting to advance Lightfoot’s proposed $77 million property tax levy increase (O2021-4759), as well as her revenue ordinance (O2021-4786), which proposes to hike fines for environmental violations.
After voting against next year’s proposed property tax increase and the proposed revenue ordinance, Ald. Brian Hopkins (2) came out in support of the bond issuance proposal, saying it "takes full advantage of currently favorable, but rapidly changing market conditions." Hopkins also voted against last year’s $94 million property tax hike, which tied future increases to the Consumer Price Index.
Ald. Tom Tunney (44) asked budget officials for a breakdown in where recovery and capital initiatives funded with the borrowed money will be spent "so I can let my constituents know that by voting for this, we're going to see improvements in my ward."
Ald. Brendan Reilly (42) also came out early in support of the borrowing plan but echoed Tunney's comments looking for a more "detailed" look at capital projects, adding that when it comes to future presentations on capital initiatives, there should be a "greater focus on the more granular level.”
Reilly later attempted to summarize his colleagues’ uneasiness with the borrowing plan, saying, "the concern is that we do not have a more granular-level look, aside from the buckets which are at a 30,000-foot view, of how does this translate into investments in our respective wards?"
Ald. Raymond Lopez (15), a regular critic of Lightfoot, said the concerns were “an issue of trust.”
“Trust that we don't have in this administration to do right by our neighborhoods or our people that we represent,” Lopez said. “We can look at lists until we're blue in the face, but right now we’re being asked to take out a $660 million loan to give you all of that back as a blank check without knowing exactly how that's going to benefit us or if we're going to be included in how that gets spent or prioritized, [which] is not something I think most of my colleagues, and especially not something I'm comfortable dealing with.”
Ald. Leslie Hairston (5) suggested holding the bond ordinance in the finance committee "until we can get more information.”
"I think it would be helpful if we had it before and not after," Hairston said, gaining support from several aldermen including Ald. Gilbert Villegas (36), Ald. Greg Mitchell (7) and Lopez.
Budget Director Susie Park told aldermen that city officials would be providing details of when communities are getting funding, "so that is forthcoming, once the funding for these projects has been approved."
“As it relates to information by ward, it's something that is in the process of being developed,” Chief Financial Officer Jennie Bennett said. “Some of these projects haven't been developed yet, so as we go through the course of the year and provide regular updates on the Chicago Recovery Plan, we'll be sure to include local-level data for that.”
Additionally, city budget officials pointed to an eight-page document that details the breakdown of funding for initiatives proposed under the Chicago Recovery Plan, including specific dollar amounts for federal funding and bond funding for each initiative.
Still, aldermen requested more detailed reports of how they would see initiatives like violence prevention and affordable housing take shape in their wards.
Ald. Pat Dowell (3), who chairs the council’s budget committee and oversaw a two-week marathon of departmental hearings on the proposed budget, defended the process, saying, “When there’s discussion about collaboration and trust not happening, I definitely have to say that that's not accurate.”
Dowell noted that this year’s budget season kicked off one month early and budget officials gathered input from residents and aldermen.
Plus, Dowell said “a lot of people didn't even show up” to the departmental budget hearings.
“But the people who showed up, had their priorities discussed, and they're reflected in things like broadband, the issue with the trees, the increase in violence prevention dollars...the money for food equity, and I could go on and on,” Dowell said. “The administration has shown that there is a willingness to collaborate, and we have to build on trust. Trust is earned.”
Ald. Harry Osterman (48), who chairs the council’s Committee on Housing and Real Estate, said that when it comes to citywide recovery initiatives like funding for affordable housing, it is important for aldermen to give their input, "but also give the administration some latitude to have their departments doing work that they need to do."
Ultimately, after a short recess aldermen approved the bond issuance ordinance with “no” votes from Ald. Anthony Beale (9), Ald. Ed Burke (14) and Lopez.
Property tax hike passes
In a much closer vote, though with virtually no discussion, aldermen voted 19-12 to pass the $77 million property tax levy increase, sending it to the full City Council for a final vote next week.
This year the automatic inflation-related increase accounts for about $23 million of the proposed hike. An additional $25 million would help to pay down debt for last year’s $1.8 billion capital bond and $28.6 million comes from expired tax-increment financing districts and new development added to the tax rolls.
“No” votes on the proposal came from Hopkins, Beale, Ald. Patrick Daley Thompson (11), Ald. Marty Quinn (13), Burke, Lopez, Ald. Matt O’Shea (19), Ald. Silvana Tabares (23), Ald. Gilbert Villegas (36), Ald. Nicholas Sposato (38), Reilly and Ald. Debra Silverstein (50).
A majority of those who voted against the increase this year also voted “no” during the final City Council vote on last year’s $94 million levy hike, with new “no” votes coming this year from Villegas, who last year served as Lightfoot’s floor leader, and from Sposato.
“I think that it’s very easy to continue to go and tap the tax levy in order to get new revenue,” Villegas told The Daily Line on Thursday. But “during the course of the year, I provided at least two or three options to create revenue by the utilization of technology.”
Villegas said his technology proposals around time and attendance and to use the cloud for required data storage would have generated between $40 million and $50 million, eliminating the need for the increase tied to inflation.
“I know it’s a small amount, but I know the reality of it [from] listening to my constituents,” Villegas said. “They’re tired of being nickel and dimed when city services are taking a long time to do.”
Tabares told The Daily Line on Thursday that she is hearing similar calls from residents in her ward, and the pandemic is not the time to raise property taxes.
“I voted no last year because I don’t agree with increasing property taxes on the backs of homeowners,” she said, adding that seniors in her ward who are on fixed incomes are telling her they cannot afford to live in their homes because “property taxes increase every year, and it doesn’t align with the services they’re getting.”
The city could look to use federal American Rescue Plan dollars to avoid the increase, Tabares suggested.
Hopkins opposes the increase not necessarily because of the dollar amount, but due to the nature of the annual increase tied to inflation, he said.
“It’s an automatic increase that has been enshrined in city law for perpetuity. That’s the basis for my opposition,” Hopkins told The Daily Line on Thursday, likening his “no” vote in committee to a “protest” vote.
Hopkins noted the increase is “modest” but “we have to draw a line. It’s a bad idea to have an automatic property tax increase tied to inflation.”
The finance committee also approved Lightfoot’s proposed revenue ordinance, which hikes the minimum fines for violating environmental regulations, including by increasing the minimum fine for construction debris in the public way from $200 to $350. The proposal leaves the cap on public way construction debris fines at $500.
The vote closely mirrored that of the property tax levy ordinance, with the addition of Silverstein voting in favor of the revenue proposal and O’Shea not voting on the measure.
Lightfoot’s proposed revenue ordinance establishes a new “Clear Path Relief Pilot Program,” which would provide debt relief for fines tied to parking, standing, compliance, speed cameras or an “automated traffic law enforcement system.” Debt relief would be available for households whose incomes equal 300 percent or less of the federal poverty level or are enrolled in Chicago’s Utility Relief Program.
The revenue ordinance would also make permanent the city’s Utility Billing Relief Pilot Program, which was approved as part of the city’s 2021 budget. The measure would require the city comptroller to submit an annual report on the effectiveness of the program on Aug. 1. The mayor has so far resisted Ald. Daniel La Spata’s (1) more far-reaching “Water for All” ordinance, calling the existing Utility Billing Relief program a better alternative.
Under her revenue ordinance, Lightfoot proposes increasing fees for building permits and specialized review, in addition to tying all building permit and review fees to the Consumer Price Index, rounded to the closest $50-increment, beginning Jan. 1, 2023.
Contrasting the bevy of fine increases, Lightfoot proposes to lower fees for registering or renewing registrations of vacant buildings. The ordinance proposes dropping from $300 to $30 the “voluntary” registration or renewal of vacant buildings by the owner and would drop from $600 to $100 the “involuntary” registration or renewal of vacant buildings once city officials have found a violation. The proposal also lowers from $300 to $30 the renewal registration of a vacant building by a mortgagee.
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