Mayor Lori Lightfoot’s plan to increase property taxes and her reliance on one-time federal money to fund community programs took center stage Friday as aldermen met to consider her proposed 2022 budget.
City Council budget hearings kicked off, and North Side Ald. Harry Osterman quickly asked Lightfoot’s finance team whether it’s appropriate to exercise the city’s ability to boost taxes next year on homeowners.
“I know that through last year’s budget and the ordinance, it allows for us to do that, but the question is, given the financial conditions of where we are as a city, the question is, should we do that?” Osterman, 48th, asked.
Budget Director Susie Park countered that the city is still working toward “structural balance” in its annual budgets.
“When the federal money runs out, it’s important for us to be able to have revenue streams that will continue to help address some of the increasing costs that occurred during the midst of COVID, no matter what happened with our revenue sources,” Park said. “And the property tax is an important component of that.”
South Side Ald. Leslie Hairston, 5th, noted that Lightfoot’s spending plan includes increases in her own office’s budget. Some of those personnel increases seem to duplicate work that’s already done by other city departments, Hairston said.
“When we’re asking people to do more, and we’re just — what I see is the functions of the departments being cut loose, and I see more red tape,” Hairston said. “And it all comes back to one location.”
And Southwest Side Ald. Matt O’Shea, 19th, urged the administration to look for ways to eliminate the tax hike for 2022.
“We should be exploring ways to get this increase out of this budget, because obviously people are struggling right now,” he said.
Lightfoot wants to boost the property tax levy by $76.5 million. About $23 million of that is tied to inflation, through an annual adjustment the mayor got aldermen to pass last year. About $25 million of the hike would go toward debt service on a capital plan.
Another $28.6 million is expected to come from new development and the expiration of tax-increment financing districts.
While it’s a relatively modest overall increase — $38 more for a home valued at $250,000, according to the city — aldermen are set to push back, given the fact many residents are having a hard time making ends meet during the pandemic while the mayor calls for spending increases.
Lightfoot has laid out a proposal to spend hundreds of millions of dollars in federal COVID-19 aid to pay for anti-violence programs, increases in affordable housing and mental health services and other initiatives aimed at helping Chicagoans who have been affected by the pandemic. That includes a $31 million program to provide $500 monthly income payments to 5,000 people in the city.
The short-term nature of the roughly $2 billion in federal money allotted to the city gave West Side Ald. Jason Ervin, 28th, pause as he surveyed the budget plan. He wondered whether the city should hold onto more than the $152 million in federal aid Lightfoot has said she wants to set aside until 2023, in case a “worst case scenario” occurs with the pandemic and the city’s recovery stalls or slides backward.
“We’ve got a full list of items that we’re doing, and if stuff starts looking funky, what do we cut?” he asked. “What do we not do in order to keep the basics?”