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* Tribune…
Chicago Mayor Lori Lightfoot offered her 2020 budget plan on Wednesday, laying out a plan to dig the city out of a daunting $838 million deficit without relying on steep property tax increases.
Lightfoot’s plan includes raising money through higher taxes on rideshares, property transfers and on all food and drinks sold in Chicago restaurants. It also relies on restructuring debt and increasing the rates of downtown parking meters, among other things.
* Click here for the budget outline. She’s projecting $352.2 million in increased revenues, including $50 million from her real estate transfer tax proposal that is pending General Assembly action. Greg Hinz explains much of the rest…
Lightfoot mentioned $163 million in new revenue from “emergency services reimbursements.” That makes up almost half of the $352 million in the new revenue she’s counting on. Officials say that money will come from the state, not ambulance users, and a deal to provide the funds has been reached with Gov. J.B. Pritzker’s administration.
Tina…
Gov. Pritzker's office says the governor will "encourage the GA to give the mayor's proposals their full consideration during the veto session" & that "balancing Chicago’s budget is an important step in stabilizing our overall fiscal health to benefit all our state’s residents." https://t.co/FiNXzLYEDW
— Tina Sfondeles (@TinaSfon) October 23, 2019
Encouraging.
She also proposed $51.8 million in spending increases.
* But there’s a whole lot of undefined “hope” in this plan…
That’s a lot (3.1 percent of the budget) of “improved fiscal management” after years of austerity. Hope she hired some wizards.
Also, keep in mind that the debt refinancing produces a one-year savings on paper. They’re booking all the savings up front. The current hole then reappears next year.
* From her speech…
Our 2020 budget developed $150 million in savings and efficiencies through an approach known as “zero-based budgeting,” which means we built it from the ground up, ensuring every line was essential to the core service mission of every department.
She didn’t mention what would be cut to reach that goal, which is 3.3 percent of the budget.
So, she’s got about $490 million in reductions which will either disappear in a year (refinancing) or will be difficult to achieve (”improved fiscal management” and, politically once the details emerge, zero-based budgeting).
* Back to her speech…
As everyone here knows, we have spoken at length to the governor and his team, legislative leaders and other lawmakers, business groups, and other organizations about our need for Springfield to support a Chicago casino, as well as develop a statewide pension reform package.
She wasn’t specific about what a “statewide pension reform package” should look like.
…Adding… Expected news…
Fitch weighs in on @chicagosmayor’s proposed budget. pic.twitter.com/NtCC7hRggy
— Hannah Meisel (@hannahmeisel) October 23, 2019
posted by Rich Miller
Wednesday, Oct 23, 19 @ 12:57 pm
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I guess if JB is going to try and alter the Illinois constitution for the graduated income tax he may as well make adjustments to the pension clause while he is opening it up.
Comment by Maximus Wednesday, Oct 23, 19 @ 1:02 pm
Every fiscal year ended in the red under Rahm. Lori will be no different.
Comment by City Zen Wednesday, Oct 23, 19 @ 1:03 pm
Improved fiscal management. Aka. Waste. Fraud. Abuse.
Comment by Blue Dog Dem Wednesday, Oct 23, 19 @ 1:04 pm
New choir.. same song. Abra Cadraba..
Comment by Wow Wednesday, Oct 23, 19 @ 1:12 pm
From Lightfoot’s speech:
“I must caution, if we don’t get the authorization that we need we will be forced to make more painful choices when it comes to new sources of revenue and we all know what those choices are,”
Basically, give me what I want or it will be on you that I had to raise property taxes. That argument means something only to legislators that have a part of Chicago. You don’t get to 60 votes with that argument.
Comment by Montrose Wednesday, Oct 23, 19 @ 1:15 pm
Are the savings from Zero-Based Budgeting coming from the hiring freeze of unfilled positions? I recall seeing something about ~200m in savings from not hiring those positions so am guessing that’s the trick in action here.
Comment by mastershake Wednesday, Oct 23, 19 @ 1:18 pm
=well make adjustments to the pension clause while he is opening it up.=
He isn’t “opening up” the constitution.
Comment by JS Mill Wednesday, Oct 23, 19 @ 1:21 pm
I can’t imagine Moodys likes what it is hearing but time will tell. Not sure who is her floor leader is in Springfield but they will be busy. Maybe a trip down there may help to personally lobby key people.
Comment by Regular democrat Wednesday, Oct 23, 19 @ 1:32 pm
JS Mill
I do love the visual, though. It is as if when a constitutional amendment is passed the Governor picks up his quill and goes, “well, while it’s open let me just make a few edits here and there.”
Comment by twowaystreet Wednesday, Oct 23, 19 @ 1:33 pm
Thoughtful and encouraging response from the Governor’s Shop.
Hopefully all sides can realize the Mayor needs the GA abd the Governor more than they need the Mayor.
That’s not new. That’s how it’s always been.
Comment by Oswego Willy Wednesday, Oct 23, 19 @ 1:36 pm
$300 million from basically better fiscal management. Lets face it, “zero based budgeting” is just fancy consultant-speak for better management of current dollars. I think given Chicago’s track record this is totally do-able /s
Comment by Red Ranger Wednesday, Oct 23, 19 @ 1:41 pm
so another $150 million bail out for the city from the state?
Comment by Todd Wednesday, Oct 23, 19 @ 1:59 pm
>Improved fiscal management. Aka. Waste. Fraud. Abuse.
That plus mention of “pension reform” and I’m having flashbacks or the Rauner administration messaging after the purge of the (very effective) Superstars.
Comment by Earnest Wednesday, Oct 23, 19 @ 2:00 pm
Can’t help but notice that she is threatening more taxes if she doesn’t get what she wants from the General Assembly. Liberal legislators don’t respond well to threats of tax increases. For many of them they believe there is an endless supply of tax money available.
What liberal legislators really respond to are threats of cuts.
Comment by Just Me 2 Wednesday, Oct 23, 19 @ 2:03 pm
Didn’t take Lightfoot long to turn into an Illinois politician. Just making up budget numbers with hope things turn out for the better. Great plan as we are likely heading into a recession. Disappointing. And I understand she can’t fix it all in one year. But the glaring reality is that the property taxes need to go up. Should have done that in year 1 of her term.
Comment by Smalls Wednesday, Oct 23, 19 @ 2:07 pm
Lori’s version of savings from a grand bargain.
Comment by Sonny Wednesday, Oct 23, 19 @ 2:36 pm
“The 2020 budget restructures the City’s Ground Transportation Tax applied to rideshare companies by increasing the tax on single rides from $0.60 per ride to $1.13, and decreasing the tax on pool rides from $0.60 per ride to $0.53. Additionally, a $1.75 surcharge on single rides and a $0.60 surcharge for pool rides will be applied to rideshare companies dropping off and picking up passengers in a designated downtown congestion area on weekdays between 6am and 10pm. These changes are anticipated to increase Ground Transportation Tax revenues by $40 million in 2020 and are intended to encourage pool rides and reduce congestion citywide.” (Page 22)
So $40 million from taxing companies that can’t turn a profit. Seems highly unlikely.
From the same page, I backed into the projected “green” sales. 3.0% excise tax for $3.5M projection ~$120M in sales. At $15 / g that’s ~8,000 kilos or about 20,000 pounds sold in one year.
Monthly sales in Colorado looked around $35M from the Google, so I think this is fairly conservative. Will be interesting to see how sales trend and if production keeps up next year.
Comment by njt Wednesday, Oct 23, 19 @ 2:38 pm
$163 million in emergency service reimbursements from the state?
Any idea what that actually is? Didn’t see in the budget specifications or examples.
Comment by Frank Talks Wednesday, Oct 23, 19 @ 2:44 pm
How do you estimate the benefits of zero-based budgeting without having already gone through the budget and identified areas to reduce or eliminate spending? But I imagine that is easier than saying $141 million in cuts have already been identified.
Comment by anon Wednesday, Oct 23, 19 @ 2:59 pm
Forget the deficit. What about the gender-specific icons in the presentation?
Comment by City Zen Wednesday, Oct 23, 19 @ 3:38 pm
I’m wondering if they’re hoping on an administration change on the federal level in 2021, meaning additional federal funding to support certain areas…
Comment by Veil of Ignorance Wednesday, Oct 23, 19 @ 4:49 pm
The city is on an unsustainable trajectory. The CTU is out of its mind with demands from CPS that are not affordable and the City has an $800million budget deficit. None of this takes into account the hundreds of millions more that will be needed for the pension debt over the next few years.
Comment by Dybalaton Wednesday, Oct 23, 19 @ 6:01 pm
=== City has an $800million budget deficit.===
Lightfoot seems to think she can close it.
Comment by Oswego Willy Wednesday, Oct 23, 19 @ 6:03 pm
I wish the Mayor luck, she needs it dealing with an insane teachers union and massive pension debt payments in the near future.
Comment by Dybalaton Wednesday, Oct 23, 19 @ 6:22 pm
===insane teachers union===
That’s a sane take. Ugh.
Comment by Oswego Willy Wednesday, Oct 23, 19 @ 6:25 pm
I believe’s it’s called “Working Together On A Grand Bargain” to make it be “balanced”.
Comment by OurMagician Wednesday, Oct 23, 19 @ 9:04 pm