At City Hall, time is running out and anxiety is mounting as aldermen and Mayor Brandon Johnson work to pass a 2025 spending plan.
The mayor and the city council must agree on a budget before December 31, otherwise they are at great risk. consequences such as credit downgrades or service interruptions. But with just one month to go before the state-imposed deadline, a series of recent pitfalls and concessions have only made balancing the budget more difficult.
Chicago hasn’t started the month of December without an approved municipal budget since 2009, and this year, not only is the city starting the month without an approved budget plan, but the mayor and aldermen are at odds on key issues, aldermen finding few easy solutions. answers.
“Nobody agrees on anything,” says Ald. Matt O’Shea, 19th, said.
Under mounting pressure, Johnson has reversed course several times this month, moving from cutting in half the large property tax levy he proposed up front with his 17 overall budget plan, $3 billion to reverse police cuts. While the rollbacks have come as a relief to opponents of the controversial proposals, the decisions only add to the growing gap between the funds City Hall wants to spend next year and the revenue it hopes to collect.
Johnson proposed closing next year’s $982 million gap by cutting about $250 million through “operational efficiencies” and about $43 million for unfilled city jobs. On the revenue side, he proposed raising a record $132 million from special taxing districts, raising $21.4 million in reduced taxes and fees and raising $300 million by raising property taxes.
But now cutting the property tax hike in half leaves another hole of at least $150 million to fill, which could grow as many aldermen want to see the tax hike go down even further. An unexpected tax change in Springfield and Johnson’s reversal on police cuts will add tens of millions more that city officials will have to patch up on short notice.
As the mayor’s office proposes new ways to balance the books, aldermen continue to scrutinize each city department’s budget for possible cuts, despite Johnson’s aversion to layoffs, furloughs or reduction of services. Departmental budget hearings that precede any City Council vote on a final citywide budget are expected to continue through Dec. 6.
But as aldermen seek smaller savings, negotiations over the most controversial elements of Johnson’s plan continue.
The budget timetable was shortened first by Johnson’s decision to delay presenting his spending plan for several weeks, and then by the impasse in budget committee hearings. Thanksgiving week is typically greeted at City Hall with a budget deal already in the rearview mirror, but aldermen said they are preparing for the delicate agreement to extend at least until mid-December .
The process of adopting a budget can take many forms, said Ald. Matt Martin, 47th.
“However, one of the extremely important things is not to wait until the eleventh hour,” Martin said. “It is important to note that the additional time the Mayor’s Office provided before sharing its proposal was not accompanied by more meaningful collaboration within government or with stakeholders. It was a real missed opportunity.
Much of the debate remains centered on Johnson’s proposal to raise the property tax by $150 million, down from the $300 million proposal that aldermen quickly rejected 50-0 at the start of the month. Even the $150 million proposal isn’t fully supported by the mayor, as Johnson’s in-house lobbying team has canvassed sentiment for an even more modest property tax hike, aligned with the inflation.
Ald. Maria Hadden, co-chair of the council’s Progressive Caucus, said “many different configurations” of tax hikes are being discussed.
“I don’t think anything is settled,” said Hadden, 49th. “There are a few different things, it’s still under discussion, but there’s nothing definitive.”
Johnson is expected to offset any further reductions in his proposed property tax increase with deeper cuts or new revenue. He shared last week that he plans to offset his $150 million cut by raising taxes on rented cloud computing space and streaming services.
But that was before the divide the mayor and city council must bridge grew even wider.
Last week, a law change during the Illinois General Assembly’s veto session over a tax on prepaid cell phones caught the Johnson administration off guard and blew an additional $40 million hole. dollars in the budget plan, several aldermen estimated.
On Monday, facing legal pressure from Illinois Attorney General Kwame Raoul, Johnson announced he would restore 162 vacant positions related to the Chicago Police Department’s federal consent decree enforcement. The mayor’s administration has ignored numerous requests for information about the cost of these functions to taxpayers, although some aldermen independently estimate the cost at around $12 million.
Martin said the administration should have known about the fallout from the consent decree proposed a few weeks ago and that roles charged with implementing police reform should have been banned. After Johnson unveiled his budget in late October, Martin said he reached out to the mayor’s team three times to ask why the positions covered by the consent decree had been eliminated, but got no response. response only after last week’s announcement that jobs would be restored.
“The proposed cuts were completely inconsistent with a commitment to reform and progress in community safety,” Martin said. “They should never have been offered.”
The budget could also be changed by the long lists of cuts and additions requested by aldermen.
O’Shea led a campaign to reverse a planned tax hike on wholesale alcohol sales that Johnson’s team estimated would bring in $10.6 million in revenue.
“A lot of people” oppose the tax hike, according to Ald. Jason Ervin, 28th, chairman of Johnson’s hand-picked budget committee.
Ald. Daniel La Spata, first, is pushing for about $1 million to be added to a city-run sidewalk snow-clearing pilot program. Likewise, a bloc of aldermen is demanding money for more ambulances and a new Southwest Side police district.
Several options among the budget-balancing ideas proposed by aldermen are garnering general support, such as a new tax on hemp products proposed by Ald. William Hall, 6th. Alternatives, such as raising trash collection fees, which drew strong reactions from black aldermen, were met with mixed opinions.
A close progressive ally of the mayor on the City Council suggested Johnson end a guaranteed income pilot program funded by federal COVID-19 stimulus money. City officials estimated that eliminating that program — combined with eliminating a series of small business grants — would save $60 million.
The ability of these budget balancers to resolve the gap bit by bit will likely be determined by how much of a property tax hike aldermen are willing to accept.
But some city council members are convinced the mayor is unreasonably rejecting what they see as a simpler solution: drastic cuts in municipal spending. A group of 15 aldermen, often at odds with Johnson, on Tuesday called on the mayor to cut $568 million in spending increases that have outpaced inflation in 27 departments since 2020.
The majority of that comes from a reduction in the “general finances” budget, which includes more than $162 million for “scheduled salary adjustments” partly intended to pay for a new Chicago Fire Department collective bargaining agreement, which has not not been finalized.
The day before, in an effort to increase political pressure on Johnson, a nearly identical group of aldermen released a poll they had commissioned, indicating that voters had a deeply unfavorable view of the mayor and that if the government closed its doors due to a budget impasse, , most of those surveyed would blame Johnson and not the city council.
Despite the public uncertainty, Hadden said negotiations are “moving in the right direction.” Many aldermen are working to understand how other city council members view different proposals, in a “nose to the grindstone” effort to find compromises, she said.
“The way the budget season has been launched has been frustrating at times,” she added. “There are some collaborative efforts that have not gone smoothly, but good things have come out of them nonetheless. »
But Ald. Scott Waguespack, 32nd, said he waited nearly a week to get a response from the administration on budget questions, and the responses lacked specific numbers.
“I can’t give you definitive answers on anything, or even tell my constituents … because the administration hasn’t really had that ability to just be definitive,” said Waguespack, a frequent critic of the mayor. “It is therefore extremely difficult to have confidence in the figures they publish. The trust just isn’t there.
Still, Ervin projected some confidence in the budget process he helps lead. Aldermen were taking “a little break” during Thanksgiving week, but plan to refocus in December and “work this out,” he said.
“I think people have their ideas, they have their different silos with their thoughts,” he said. “At the end of the day, we’ll get together and make the sausage.”
Tribune reporter AD Quig contributed.
