DOWNTOWN — Chicago’s budget problems are bad. $838 million bad. But Mayor Lori Lightfoot said Thursday she would avoid another huge property tax hike to balance that budget — or at least she’d try to avoid it.
Addressing a crowd at the Harold Washington Library, and residents watching live on television across the city, Lightfoot warned up front that she would not share a detailed budget plan until October.
Instead, she outlined the financial woes facing the city, the policies she’s already put in place to stop the bleeding and warned of more tough choices to come.
“Let me begin by telling you we walked into a staggeringly large budget deficit for next year,” Lightfoot told the crowd, not addressing her predecessor Rahm Emanuel by name but referencing the $1 billion budget hole she inherited. “And what was worse, we were not left with any credible plan on how to fix this massive problem.”
Lightfoot went on to say that mayors of Chicago’s past would hike property taxes, short change pensions or get into a “massive borrowing scheme” that would stick the city with steep fines and interest rates.
“I fundamentally rejected these approaches,” she said, adding that after just 100 days in office, she was able to reduce the projected budget deficit to $838 million — shaving off nearly $200 million in debt. But she wouldn’t completely take raising property taxes off the table.
“I want to avoid that measure as much as possible, but if
we don’t get the structural changes that our pensions need
. . . we will be presented with very hard and limited
options,” she said.
The mayor went on to tout her accomplishments on everything from passing the Fair Workweek Ordinance to limiting the power of City Hall lobbyists.
“As your mayor, I cannot in good faith promise you that I will take any option off the table to tackle this crisis, whether it’s through budget reductions or by raising revenue,” Lightfoot said. “What I can tell you is that I will work tirelessly to ensure whatever options we take will be made with transparency and with working folks in mind.”
On June 13, Lightfoot said there is “no question” a tax hike will be needed to close the gap, but promised to listen to Chicago taxpayers — who have been up in arms about rising property taxes. She embarks on a citywide budget town hall tour next week.
The city’s gentrifying neighborhoods, which are becoming increasingly white as black and Hispanic families leave Chicago, have been hit the hardest by property tax hikes, Ald. Carlos Ramirez-Rosa (35th) said.
In 2018, Logan Square saw a 24.09 percent increase in its median tax bill — more than 10 times the citywide average of 2.15 percent.
Uptown ranked second for the highest increase (19.93 percent) and Bronzeville ranked third (13.72 percent).
Lightfoot will now listen to taxpayers in a series of town halls. The first will be Sept. 4 at the Copernicus Center, 5216 W. Lawrence Ave.
“With the city facing financial challenges this year, it is crucial that we have an open and honest conversation with residents from across the city, as well as with departments, city leaders and other stakeholders to develop solutions that will make our government stronger and work more efficiently for all of our neighborhoods,” Lightfoot said.
Lightfoot’s speech comes after a week of criticism from progressive groups in Chicago.
The Sun-Times reported earlier this week that Lightfoot would use money from a real estate transfer tax — which homeless advocates believed would be used to support the “Bring Chicago Home” ordinance — to fill the city’s budget gap instead.
Lightfoot reiterated her support for this transfer tax and the Bring Chicago Home ordinance during Thursday’s speech.
“We are committed to a graduated real estate transfer tax,” Lightfoot said. “This will bring relief to homeowners whose houses sell for under $500,000, while owners with higher-valued homes will pay more of their fair share. We are committed to addressing homelessness and housing instability, and putting real resources toward these problems.”
Another revenue option that is apparently not dead yet is the Chicago casino. Earlier this month, a study by Union Gaming Analytics concluded that Chicago’s “onerous” tax structure would make a profitable casino nearly impossible. But the mayor reiterated her support for it Thursday.
“Importantly, we are pursuing a Chicago casino that creates a dedicated revenue stream to pay for our pension costs,” she said. “If we get the tax structure right, this will represent a structural solution to address long-term problems, not a one-time fix.”
Meanwhile, teachers are threatening to walk off the job as soon as Sept. 26 if a contract is not agreed upon. On Monday, Chicago Teachers Union President Jesse Sharkey said while Lightfoot’s proposed salary increases seem generous, they come after years of cuts and pay freezes. The union is calling for more special education teachers, social workers, librarians and school nurses.
Progressive group United Working Families gave the mayor a “D” on her first 100 days during a press conference earlier this week, and a group of progressive alderman gathered Thursday to call on the mayor to support “a Chicago budget that increases funding for vital public services, freezes spending on developers and failed policing strategies and taxes the wealthy and their corporations.”
Cook County Assessor Fritz Kaegi was on hand for the speech Thursday, and said for him the main takeaway from Lightfoot’s speech was that it will take a lot of cooperation between the city, state and county if the city wants to emerge from its financial mess without even higher property taxes.
“The state is a really important partner in all of this, so we don’t have to revert to the regressive revenue solutions that are left,” he said. “I think she’s pitch perfect in what she said.”
Overhauling the workers compensation program, re-examining pension spending and introducing casinos and marijuana dispensaries, for example, are tools at the city’s disposal — if the county and state play ball, Kaegi said.
“All of the easy solutions that one could adopt unilaterally, many of those solutions are off the board,” he said, meaning those revenue streams won’t work without state or county buy-in. “One of the last unilateral solutions that’s left is property taxes. And she’s rightly focusing on the things that we can address together. So many problems we have in Chicago are interconnected between the county, the city and the state. I wanted to be here to show we’re trying to do our part to clean up our assessment system.”
The forums on the city’s 2020 budget will take place in each of the city’s four corners:
- 6-8 p.m. Sept. 4 at Copernicus Center, 5216 W. Lawrence Ave.
- 9-11 a.m. Sept. 14 at Roberto Clemente High School, 1147 N. Western Ave.
- 6-8 p.m. Sept. 19 at the Southeast United Methodist Youth and Community Center, 11731 S. Avenue O
- 6-8 p.m. Sept. 25 at Lindblom Math and Science Academy, 6130 S. Wolcott Ave.
Residents can also weigh in on what the city’s budget should prioritize via an online survey through Sept. 30.
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