Chicago’s budget gap could widen further thanks to a tax cut in Springfield that is expected to cost the city an additional $40 million in revenue next year.
Following an amendment this week on the prepaid cell phone tax during the Illinois General Assembly’s veto session, Mayor Brandon Johnson’s budget problem appears likely to worsen as he attempts to get the City Council to accept a proposal to balance the 2025 spending package, several aldermen said. the Tribune.
Johnson administration lobbyists told aldermen that the change, which was recently updated in both chambers of the General Assembly on Wednesday, will cost Chicago about $40 million in 2025.
“It’s extremely frustrating,” said Ald. Ruth Cruz, 30, said. “With what’s happening now, it means there is no balanced budget.”
A change creating a distinction between taxes on prepaid telephone services attached to a tangible item such as a calling card, a telephone and those on other prepaid telephone plans was to come into force on January 1. But state lawmakers delayed the start date, which the state Department of Revenue said was necessary to account for implementation issues.
The phone tax issue is only part of the dilemma for Johnson amid an already difficult budget process that has seen him and the City Council clash over how to close a budget deficit of nearly billion dollars for 2025. The bill is now in the hands of Governor JB Pritzker. office for approval.
Several aldermen told the Tribune that state officials will try to get the funding Chicago expects with more legislative changes early next year.
The Johnson administration did not respond to questions about the budget hit Thursday.
The mayor’s plan to balance a $17.3 billion budget has hit a series of obstacles, including schedule delays that bring the final vote ever closer to the required Dec. 31 deadline to finalize the spending plan. Last week, aldermen showed their strength by voting 50-0 to reject his proposed $300 million property tax increase. The mayor has since lowered that figure to $150 million, although some notable allies still reject it.
Along the way, Johnson implored his counterparts in state government to step up and help him shore up so-called progressive revenues to combat the city’s structural deficit. But relations between City Hall and Springfield, always delicate, were strained throughout his tenure as he made little progress in defending his agenda there.
To that end, aldermen on Thursday already began pointing fingers at how the Johnson administration has handled its Office of Intergovernmental Affairs, which is charged with lobbying not only the City Council but also Springfield and other levels of government .
This office has experienced remarkable staff turnover, with the departure of two executives and an interim chief over the past year and a half, in addition to several vacant positions. Johnson’s IGA deputy director for state government, Mike Ciaccio, also recently submitted his resignation, effective at the end of the month.
“It highlights the futility of the city when it comes to a presence in Springfield,” said Ald. Brian Hopkins, 2nd, said. “We really don’t have an effective lobbying team in Springfield, and it really shows in times like this. This is inexcusable.
Cruz said she wanted to hear from state senators about why they made the change.
“Everyone deserves to know what happened,” she said. “I want to know who voted for this.”
Rob Karr, president and CEO of the Illinois Retail Merchants Association, a lobbying group that includes cell phone stores, applauded the tax update Thursday.
“IRMA didn’t kill the mayor’s proposed telecommunications tax increase, but we would happily take credit for protecting low-income users,” Karr said in a statement. “The city is not engaging meaningfully or consistently in Springfield. IRMA remains ready to offer assistance on issues we align on – as we always have with previous administrations – but before today, we have not seen a clear effort from the mayor’s office to do so.
Springfield’s fall veto session was scheduled to end Thursday. This week, representatives of the Johnson administration, including chief of staff Cristina Pacione-Zayas, were seen at the Statehouse during the session.
Sen. Celina Villanueva of Chicago, who chairs the Revenue Committee, said Thursday that she knows of no monetary effect on the city of Chicago from the revenue legislation passed this week and directed questions to the city, office of the governor and to state agencies.
The committee’s vice chairman, Sen. Robert Martwick of Chicago, said that after the bill passed he couldn’t say for sure whether it would have a negative impact on Chicago’s revenue, but whether it would was the case, “this is definitely something we”ll have to consider modifying.
“It’s definitely something that we need to look into, because Chicago is not able to — we shouldn’t be stealing from Chicago to increase our revenue here in the state,” Martwick said.
He also noted that no one in the city openly opposed the revenue “cleanse” legislation during the Senate Revenue Committee’s hearing on it earlier this week. A Chicago city lobbyist filed a testimony in opposition to the bill but did not speak at the hearing.
Alice Yin of the Chicago Tribune contributed.
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