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Crain’s: Mayor belatedly looking at cuts, tax hikes as deadline looms

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Illinois

* From one of my newspaper columns last month…

Holman leaves as the city is gearing up to face what is estimated as at least a $982.4 million budget deficit next fiscal year.

But the city has long known this massive deficit was coming. Almost a year ago, the city released a two-year budget forecast with a “base outlook” that projected a $986 million deficit in fiscal year 2025, which is only a few million dollars away from the current city projection. The city’s 2023 budget report predicted a “negative outlook” of a $1.14 billion deficit by 2025.

And now the city is apparently hoping to convince the General Assembly to help it out. One outlet reported the other day that city officials are “talking to state lawmakers about its budget concerns,” although I personally couldn’t find anyone who has had any serious talks with the city. Pritzker said the city hasn’t spoken with him, either.

Instead of planning for months to face that challenge - and adjusting this year’s spending and revenues to mitigate future damage - the mayor appeared to ignore the fiscal peril and then when it couldn’t be ignored any longer, he postponed his budget address until the end of the month.

* And now this…

Mayor Brandon Johnson’s team has told city department leaders to prepare to cull their staff budgets through what his office has described as an “exercise” in case layoffs are needed to close the city’s $982 million 2025 budget shortfall.

In order to stave off deep personnel cuts and avoid a fight with organized labor, Johnson is weighing whether to push for a large property tax increase that would go back on a campaign promise, but may prove easier than committing to the staff reductions necessary to balance the books and garner the required 26 votes in the City Council to approve his spending plan. […]

The mayor’s office scheduled a meeting this morning with department leaders to explain the spending cuts, according to two sources familiar with the meeting. Johnson’s budget team held a meeting with labor leaders last week to prepare them for the policy. […]

Until now, departments have not been explicitly told to prepare for layoffs, instead being directed to find between 3% and 5% reductions in their budgets that could come from program reductions or other cost-saving measures. Going deeper would be difficult without affecting personnel.

It would’ve been a whole lot easier to raise property taxes during his first few months in office than it will be now, when he is embroiled in numerous battles with literally every faction on the city council and will be planning on the fly.

posted by Rich Miller
Tuesday, Oct 8, 24 @ 2:05 pm

Comments

No mayor needs to be an expert in any area of governance, but they need to be able to internalize enough to lead effectively. I hope I am wrong, but I see a mayor who only feels comfortable attending events, does not want to do his homework, then lashes out at anyone who could hold him accountable. This is not a leader you want in a crisis.

Comment by Three Dimensional Checkers Tuesday, Oct 8, 24 @ 2:17 pm
If I am understanding the Board of Ed fiasco, isn’t the short-term $300 million loan intended to reimburse the city? Is that part of this story or am I making things up?

Also, even if the city seeks to hike the property tax for the corporate budget, they still need to find cuts to personnel and other lines. It’s both tax hikes and expense reductions that are needed.

Comment by 47th Ward Tuesday, Oct 8, 24 @ 2:23 pm
Until there is more balance in the political makeup of Chicago politicians, the trend is ever downward. There really is not balance of thought or direction. At best only in fighting among some of the Democrats with no real solutions.

And I do not see an emergence of Republicans or some reform minded alternative political force happening.

Comment by Mason County Tuesday, Oct 8, 24 @ 2:28 pm
Mayor Johnson governs with the foresight and temperament of a middle schooler furiously scribbling any sort of answers they can on their homework as the teacher is walking around to collect it.

At this point it would not be ridiculous to predict that Mayor Johnson’s solution will be to ask the city to take out a short term high interest billion dollar loan.

Comment by Charles Edward Cheese Tuesday, Oct 8, 24 @ 2:28 pm
One day we’ll have a week without this mayor stumbling all over himself and hurting this city. One day. Maybe. I hope. I pray.

Comment by You win more bees with honey Tuesday, Oct 8, 24 @ 2:29 pm
There is considerable room to look at work rules although it would be hard to implement in this next budget. Last week the city replaced the fire hydrant on my block. They had enough personnel to replace the Bears offensive line with four supervisors left over for special teams. Law Enforcement overtime is out of control. And CTU sure has a lot of non classroom administrators. Across the board cuts will impair some effective services and neglect to cut out the waste.

Comment by Peters Piece Tuesday, Oct 8, 24 @ 2:31 pm
===One day we’ll have a week without===

I think he did a very solid job in the few weeks before and during the convention.

Comment by Rich Miller Tuesday, Oct 8, 24 @ 2:31 pm
CTU sure has a lot of non classroom administrators

On what planet do you think they might be at risk? Surely they are the LAST to go.

Comment by Fav Human Tuesday, Oct 8, 24 @ 2:33 pm
Rich, He had a lot of federal help those 2 weeks

Comment by Hank Sauer Tuesday, Oct 8, 24 @ 2:40 pm
He wasn’t cuddly or a great orator, but as an advisor, it would do my mayor a lot og good to get some ideas from Rahm Emanuel. He inherited to fiscal time bombs and was able to navigate throught them. Even though the court struck it down, I had hoped his Park District pension plan concept would fly and be a template for others to follow.

Comment by levivotedforjudy Tuesday, Oct 8, 24 @ 2:47 pm
This also reflects poorly on his financial team. The last minute bond refinancing from his CFO, this last minute layoff exercise from his Budget Director. The buck stops at the top, but they seem to be not running smooth shops.

Comment by RPOne Tuesday, Oct 8, 24 @ 2:51 pm
It would’ve been a whole lot easier to raise property taxes during his first few months in office than it will be now, when he is embroiled in numerous battles with literally every faction on the city council and will be planning on the fly.
The current Illinois answer to every budget shortfall……just raise taxes…..no other responsibile actions required

Comment by Don't lose Sight Tuesday, Oct 8, 24 @ 2:56 pm
===The current Illinois answer to every budget shortfall===

lol

Try a reading comprehension course.

Comment by Rich Miller Tuesday, Oct 8, 24 @ 3:18 pm
==The last minute bond refinancing from his CFO==

Could you elaborate? How was it “last minute?”

Comment by low level Tuesday, Oct 8, 24 @ 3:37 pm
A hard lesson for any new leader: Do the toughest things first.

Comment by Walker Tuesday, Oct 8, 24 @ 3:47 pm
To add: That’s what Toni Preckwinkle did with Cook County

Comment by Walker Tuesday, Oct 8, 24 @ 3:54 pm
=== Do the toughest things first===

Hence all those bills passed in 2019.

Comment by Rich Miller Tuesday, Oct 8, 24 @ 4:04 pm
Just in the last couple of weeks the assessor mailed out notices to Chicago residents letters explaining your new assessed valuations. Not sure what the numbers look like yet but 20 percent and up seems common based on conversations i have had with people. This obviously will translate to higher taxes. If the mayor tries to pile in more this will trigger massive outcry i would predict. Time will telll.

Comment by Regular democrat Tuesday, Oct 8, 24 @ 4:37 pm
I have seen 40 percent and higher increases in assessed valuation on the NW Side.

Comment by Big Dipper Tuesday, Oct 8, 24 @ 4:56 pm
The political problem was he left himself -zero- wiggle room in the runoff with Vallas. A huge chunk of his campaign was that Vallas was going to hike property taxes and Johnson wouldn’t. To immediately flip on that would have left its own intense sour taste. But, in fairness, he’s not the first nor the last Chicago politician to have put himself into that dilemma.

Comment by ZC Tuesday, Oct 8, 24 @ 5:14 pm
Shoulda woulda coulda……. Didn’t, better do it now and hopefully by 2027 the fiscal ship will at least stop sinking, then run on “willing to make the tough decisions”.
You don’t do it now you won’t do it any closer to 2027.
If you don’t get the revenue now to at least show you have “fiscal chops” 2027 is over before it gets started.
The next mayor will come in and do it and use you as the patsy for having no courage to face your debts.
Missed opportunity last year to set things right.

Comment by Frida’s boss Tuesday, Oct 8, 24 @ 5:44 pm
Johnson’s false hopes that the State will bail Chicago out are a political ploy. Then when Johnson has to raise City property taxes he’ll point the finger at JB and the Legislature for “failing and leaving him no choice but to raise taxes.”

Comment by thisjustinagain Tuesday, Oct 8, 24 @ 6:30 pm
@thisjstin he keeps losing when going after JB and team, his own team and advisors don’t have the governing chops to match.

Comment by Frida’s boss Tuesday, Oct 8, 24 @ 6:57 pm
28% property tax raise for me. Typical for my hood.

Comment by 44 Tuesday, Oct 8, 24 @ 8:38 pm