There was an old song, from long ago, with the refrain of “What Lola wants, Lola gets,” and that seems to be the appropriate victory song for Chicago Mayor Lori Lightfoot as her proposed budget sailed from committee and into the city council on Wednesday, where it passed on a 35 to 15 vote, to the tune of $16.7 billion.
Key to its success was a flood of federal money from the American Rescue Plan Act, $1.9 billion, that gave a historical 30 percent increase to city expenditures, and where everyone who wanted money for any cause got it, or as The Chicago Sun Times reported, “There are dollars here for damn near everything that everybody talked about,” said Ald. Jason Ervin, chair of the Black Caucus.
Many residents, and lawmakers, had previously criticized Lightfoot for not proposing a revenue stream for many of the progressive planks that she ran on, as a mayoral candidate, and this budget attempts to reverse that image.
A case in point was her position, along with that of Public Health Commissioner, Dr. Allison Arwady, to not reopen all of the city’s public health clinics, (mostly closed by former Mayor Rahm Emanuel) but to focus instead on the federally qualified health centers of which the latter said, “is more efficient and effective.”
The change in position, to at least open some of them, rankled many, but she did agree to a staffing increase of 72 percent with the five existing clinics; but most of all gave a boost of $6.3 million.
Some local leaders such as Amika Tendaji, executive director of Black Lives Matter Chicago, said that the private clinics, “falls short in its true service toward the public,” and expressed concerns before the final vote,claiming that there is a lack of accountability, and told local public radio station, WBEZ that, “When you call [them] they don't answer the phone.”
Ald. Carlos Ramirez Rosa, chair of the Democratic Socialist Caucus, praised the efforts of his five member coalition, which also included grass roots organizations, that helped push for the proposed changes that influenced the mayor’s proposals.
The City Council’s Progressive Caucus, said in a statement on Wednesday, “While we still need to prioritize more progressive structural revenue and direct all of these resources equitably, especially around racial redress, this is a progressive budget and a good start.”
Chicago, like other major cities in America, faces a severe lack of affordable housing and Ald. Maria Hadden proposed $10 million, but got $5 million, for the repair, upkeep and renovation of the city’s single room occupancy hotels, “which often house the poorest Chicagoans in the worst conditions,” according to her statement to local public television station WTTW.
Overall, there is $635 million that will go to affordable housing initiatives, a figure that also includes help to 4,000 homes for low to moderate income residents.
Tacking on that is $31.5 million to pilot a year-long program for basic income to poor residents, with $500 checks going to 5,000 Chicago families in the greatest need.
This was passed over the criticism of the City Council’s Black Caucus who instead wanted a package of reparations for the descendants of Black slaves.
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This view is also shared for the $22 million earmarked to help the homeless population as Doug Schenkelberg, Executive Director at the Chicago Coalition for the Homeless, told WBEZ, in advance of the final vote, “when you’re using a one time funding source, you're not going to have those dollars in the next year, unless you create another funding stream.”
What he would rather see, and will continue to work for, is, as reported, “to lobby the mayor to back their proposal to increase taxes on new property sales over $1 million to create a consistent revenue source to address homelessness.”
Of equal concern, from others, is that to fund these progressive entities the city is “borrowing an additional $660 million,” just as “it pays off another high interest debt it incurred last fall as the second surge of the pandemic crested.”
Using a bond effort, common to city budgets, there are those concerned, Msall among them, who claim there needs to be a detailed plan of expenditure; but, which has not yet been seen, for an otherwise sound fiscal strategy.
Another increase in the property tax levy, tied to the consumer price index (which will grow to $76.5 million) was met with less enthusiasm, by some, especially “on the heels of a $94 million hike in real estate taxes last year,” reported the Chicago Sun Times, held by a vote of 32 to 18.
That $22,9 million, included $25 million to support the first instalment of the mayor’s $3.7 billion capital plan, coupled with $28.6 million from new properties, and an approved bond issue, noted The Bond Buyer.
The elephant in the room is still pensions, and specifically the four plans the city needs to pay, as mandated by the Illinois State Constitution to the tune of $2.3 billion, an “increase of $255 million as compared with 2021.”
Lightfoot praised the plan by saying, “In 2022, with the Budget we are proposing, we will climb our pension ramp, which means that for the first time in our city’s history, and all four pension funds will be paid on an actually determined basis. This is huge,” a statement that Forbes columnist Elizabeth Bauer objected to, pointing out the state law requirement.
She also pointed out that “the plan’s actuarial valuations calculate a figure that’s labelled the Actuarially Determined Contribution;” but, that instead is `` [really] determined “by the Retirement Board for respective plans!”
She says that the city will have to establish rules “when the new Standard of Practice is finally finalized, the city will have to change its ADC calculator. And what that means, is that gap between the city’s actual contribution and the ADC will be even wider, in the short term, with the payoff that the debt is paid off much sooner.”
"Significantly, there is still no long term source from Springfield. Nor has the General Assembly heeded the Civic Federation’s call for a state constitutional amendment eliminating the pension protection clause going forward,”according to the Sun Times.
While Lightfoot can justify enjoying another Scotch and steak with this budget victory there are some valid concerns about what happens to city expenditures after the federal monies run out, and how she can manage strategic issues in the future, among them enduring problems such as homelessness and crime, despite giving the Chicago Police Department by $189 million with a new police contract, and a much delayed pay raise of 20 percent over the next eight years.
