• Alex Nitkin
    SEP 24, 2021

    In-person budget hearings to kick off Friday with overview of Lightfoot’s spending plan

    Chicago Budget Director Susie Park briefed aldermen on the city’s 2021 year-end balance sheet during a committee meeting last month.

    The Chicago City Council’s expedited two-week round of budget hearings is set to kick off on Friday with a high-level overview from city finance officials, promising to offer an early look at aldermen’s appetite for Mayor Lori Lightfoot’s plan to pair a mild property tax hike with a panoply of new federally backed spending.

    The City Council Committee on Budget and Government Operations will host a new round of hearings every day starting Friday, per the schedule committee chair Ald. Pat Dowell (3) provided to aldermen earlier this month. The hearings are all set to take place in person, representing the council’s first in-person committee hearings since the COVID-19 pandemic took hold last spring.

    Committee members are scheduled to grill a new crop of city department or agency heads every day, following tradition by closing out with a hearing of the Department of Law on Friday, Oct. 8. The council is then scheduled to host a public hearing on Oct. 14 to solicit feedback on the budget, all leading up to a final vote on Oct. 27.

    The meetings will be broadcast live on the City Clerk’s website but will not have a virtual component for aldermen to participate, a budget committee spokesperson said Thursday. Members of the public “will have a designated area to attend in-person as well as the ability to call in for public comment,” the spokesperson added.

    Dowell has asked all aldermen to show proof of vaccination or a negative test in order to participate in hearings. But Ald. Maria Hadden (49), Ald. Sophia King (4) and Ald. Rossana Rodriguez-Sanchez (33) all emailed Dowell on Thursday asking for her to open an option for virtual participation.

    “Throughout the coming weeks, there will likely be more of us exposed and the need for people to quarantine while waiting on covid tests or checking for symptoms,” Hadden wrote in the email obtained by The Daily Line. “Those of us who would act responsibly for our colleagues and communities should still be able to participate in Budget Hearings." 

    The first hearing comes days after Lightfoot rolled out her $16.7 billion plan to fund the city in 2022, in part by taking advantage of the $1.9 billion on tap from the American Federal Rescue plan to help close the city’s $733 million forecasted budget gap. Chicago Chief Financial Officer Jennie Huang Bennett, Budget Director Susie Park and Comptroller Reshma Soni are set to make presentations and answer aldermen’s questions on Friday.

    Lightfoot is proposing to close the budget gap “without any new taxes, no reduction in city services, and no layoffs,” she said during her annual budget address in the City Council chamber on Monday. But the plan does include an approximately $77 million increase in the city’s property tax levy, including $23 million tied to an increase in the Consumer Price Index. Lightfoot pushed through an initiative last year to tie property taxes to inflation, saying it would build more predictability into the city’s finances. 

    Related: Lightfoot pitches $272M TIF surplus, $77M tax levy hike, $385M from ARP to plug budget hole

    The growing property tax levy also accounts for $25 million to help the city pay down debt from last year’s $3.7 billion capital bond, which will fund the city’s five-year “Chicago Works” infrastructure plan. And it includes another $28.6 million to be reaped from expired tax-increment financing districts and new development being added to the tax rolls.

    Related: Street makeovers, building upgrades set to accelerate in first phase of 5-year capital plan

    The mayor’s plan also calls to stitch the city’s budget gap by declaring a $271.6 million tax-increment financing surplus, netting about $67.6 million for the city and spreading the rest among Chicago Public Schools and other taxing bodies. It also feeds about $385 million in American Rescue Plan dollars into the city’s core operating budget for 2022, and it leans on more than $298 million in “savings and efficiencies” and $62.6 million in higher-than-expected revenues.

    City budget officials last month laid out a plan to set aside about $782 million from the city’s $1.9 billion share of American Rescue Plan funding to pay for core city services in 2021, allowing the city to cancel its previously planned $500 million “scoop-and-toss” debt restructuring plan that would have put future taxpayers on the hook for plugging the 2021 budget hole. Aldermen like Ald. Daniel La Spata (1) and Ald. Sophia King (4) challenged officials’ insistence on retiring the short-term debt all at once, asking if they could spread out repayments so the city can pump more into boosting social services next year. But Park and Bennett stood firm, arguing the city would have to pay more in future years if they kept the debt restructure in place.  

    Related: Finance officials defend use of $782M in ARP to cancel ‘very expensive’ scoop-and-toss

    Lightfoot’s budget plan supplements the federal windfall by issuing $660 million in new general obligation bonds, leaving $1.23 billion for new spending initiatives. The mayor on Monday touted hundreds of millions of dollars in new funding for housing, mental health, workforce development, environmental benefits and other measures under the umbrella of her “Chicago Recovery Plan.”

    Related: Lightfoot reveals 'Chicago Recovery Plan' with guaranteed income plank as progressive groups take credit

    Many aldermen on Monday kept their thoughts on the budget plan close to the vest, saying they needed more time to read through the details before making a judgment. But some, like vocal Lightfoot critic Ald. Anthony Beale (9), panned her proposal, calling it “pie in the sky” and “not sustainable.”

    “We're going to use federal money to plug the Corporate Fund, and then we're going to take Corporate money to restructure the scoop-and-toss, and at the end of the day when that money runs out, we're going to be left holding the bag,” Beale said. “There was nothing to say, ‘We're going to create this, we're going to build capacity and then we're going to grow the economy going forward.’ It's full of one-and-done one-hit wonders, and we're going to be left with nothing.”

    But Lightfoot told The Daily Line in an interview on Tuesday that her budget team was “very thoughtful” about use of American Rescue Plan dollars, “because once you put something in the Corporate budget, you’re loath to take it off, “and we didn’t want to create expectations when it comes to [full-time employee positions] that were not going to be supportable down the road.” 

    “We’re trying to be very thoughtful about making sure that we’re building out a set of programmatic investments and infrastructure for the long term, and not just one-time moves,” Lightfoot said. “We recognize that the magnitude of the [American Rescue Plan] monies is not going to come again.”

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