Chicago City Council 2022 budget approved – Crain’s Chicago Business

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Chicago Mayor Lori Lightfoot’s 2022 budget passed the full City Council today on a 35-15 vote.

Lightfoot won over progressive members of City Council in recent weeks with several tweaks to the $16.7 billion spending plan, including an increase in staffing and operating hours at city-run mental health clinics, creating a new committee to oversee how federal COVID relief money is spent and planned renovations of the city’s single-room-occupancy units.

This budget does not include any major layoffs, fee hikes or program cuts. But it does include an increase in the property tax levy of $76.5 million, for a total levy of $1.6 billion. Of that $76.5 million, $22.9 million represents an already-approved hike tied to the consumer price index; $25 million will help make debt service payments for capital bonds; and $28.6 million represents taxes on newly built properties and expiring TIF districts.

“This modest property tax increase provides stability and predictability,” Finance Chairman Scott Waguespack, 32nd, argued, rather than drastic jumps in the levy. He said he hoped for state action on a graduated income tax to ease the property tax burden on Chicagoans.

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Eighteen aldermen voted against the property tax levy. Waguespack voted in favor.

Chicago received $1.9 billion in federal COVID American Rescue Plan funding. Of that total, $1.3 billion will be used for “revenue replacement”—closing budget gaps in 2021 ($782 million), 2022 ($385 million) and 2023 ($152 million). With that money, the city was able to cancel a planned “scoop and toss” round of bond refinancing that would have extended the life of the bonds and increased the cost to repay it over time.

Ahead of the vote, aldermen were largely laudatory of the spending plans within the budget, saying a broad range of initiatives were squeezed in. The proposal has “everything that everybody has talked about,” Ald. Jason Ervin, 28th, said near the end of testimony. That includes fresh spending on violence prevention, affordable housing, climate change, homelessness prevention, and mental health aided by federal funding.

“I know it’s not perfect. I know it’s not everything that we want. I know it’s not everything that we dreamed of or imagined with this $1.9 billion dollars,” he said, but it creates “responsible progress” for all communities in the city. Ervin, the chair of City Council’s Black Caucus, had pushed hard for violence intervention programming, which will total $85 million in the budget.

“Listening to the speeches today, I feel like Christmas has come early,” Ald. Raymond Lopez, 15th, a frequent mayoral critic, said. But he argued the budget was imbalanced and that funding for expanded programs was unsustainable. The city fell short of his hopes to make city departments run better and safeguard taxpayer dollars, while meeting aspirational goals like universal basic income and reparations.

The city does plan substantial borrowing—a mix of refinancing old debt to take advantage of low interest rates and taking on new debt—that totals $4.4 billion. The city plans a $1.2 billion refinancing to receive $254 million in interest savings, using the vast majority of those proceeds for retroactive pay for Chicago police officers, and a $660 million general-obligation bond to help pay for the mayor’s proposed recovery initiatives.

Ald. Byron Sigcho-Lopez, 25th, a member of City Council’s Democratic Socialist Caucus, was most vehement in opposition to the city’s plans to pay off $450 million high-interest debt taken on last year to bridge budget gaps, describing it as a payout for Wall Street banks. Other progressive aldermen—Daniel La Spata, 1st, and Carlos Ramirez Rosa, 35th—voted against amendments to the 2021 budget in opposition to the move.

Lightfoot’s “Chicago Recovery Plan” includes several new investments over the next three to five years, paid for with a mix of ARP funding and that general-obligation bond. That plan calls for roughly $160 million each in affordable-housing investments and direct assistance to families, including the mayor’s planned cash assistance program. Another $108 million would be spent on health and wellness plans (including a food equity program and new sobering facility); $85 million in violence prevention; and nearly $200 million on climate and environmental justice initiatives like expanding the city’s tree canopy, decarbonizing the city’s fleet, and retrofitting community centers and libraries using renewable energy.

The 15 aldermen who voted no on the 2022 budget: Alds. Brian Hopkins, 2nd; Anthony Beale, 9th; Marty Quinn, 13th; Ed Burke, 14th; Raymond Lopez, 15th; David Moore, 17th; Matt O’Shea, 19th; Jeanette Taylor, 20th; Silvana Tabares, 23rd; Byron Sigcho-Lopez, 25th; Roberto Maldonado, 26th; Nick Sposato, 38th; Anthony Napolitano, 41st; Brendan Reilly, 42nd; and Jim Gardiner, 45th.

The 18 aldermen who voted no on the property tax levy: Alds. Hopkins; Beale; Quinn; Burke; Lopez; Stephanie Coleman, 16th; Moore; O’Shea; Taylor; Tabares; Sigcho-Lopez; Maldonado; Felix Cardona, 31st; Gilbert Villegas, 36th; Napolitano; Reilly; Gardiner; and Deb Silverstein, 50th.

After the meeting, Taylor said she couldn’t vote for a budget that increased property taxes while only offering “crumbs and cakes” in relief for residents. “We could have done so much better.”

“We had all this money and this was a great opportunity and we just didn’t do it. We do the bare minimum, as usual,” she said. Targeted spending on certain programs—like $5 million to support the city’s single-room occupancy units—are not enough. She also opposed an increased budget for the Chicago Police Department.

Other aldermen who voted no argued the budget didn’t do enough to bolster CPD as murders and shootings are rising.

“I can’t vote for a budget that does not address the police shortage we will continue to face,” Quinn said in a statement. According to CPD data, murders are up 3% compared to 2020 and 56% compared to 2019. Shooting incidents are up 10% compared to last year and 66% compared to 2019.

O’Shea told reporters after the meeting that the city should have mitigated the cost of the property tax increase by doing away with the mayor’s guaranteed income pilot. “In two years, we won’t be able to afford it,” he said. “In 24, 36 months, we’re going to have a real problem. I am concerned about that.”

Cash payments might deter people from returning to work, O’Shea said. “We have a workforce with tens of thousands of jobs right now that nobody’s taking. We should have been talking about, possibly, childcare, getting people back to work.”

Jack Lavin, CEO of the Chicagoland Chamber of Commerce, said in a statement the property tax increase is coming just as businesses are “contending with skyrocketing property assessments, which in some cases have doubled or even tripled in value. . . .Chicago’s business community needs to see more direct support, an immediate plan to fill police vacancies and bolster public safety efforts, and a stop to these annual property tax pressures.”

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