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City Council Set To Vote Tuesday On 2021 ‘Pandemic Budget’ With $94M Property Tax Hike

The tax hike is part of an effort to close an unprecedented $1.2 billion shortfall next year. The budget also seeks to refinance debt, a tactic known as “scoop and toss” budgeting.

Mayor Lori Lightfoot answers questions at a press conference on the updates about COVID-19 in Illinois on Friday, March 20, 2020 in Chicago.
Colin Boyle/Block Club Chicago
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CHICAGO — The stage is set for a vote Tuesday on Mayor Lori Lightfoot’s $12.8 billion “pandemic budget.”

Lightfoot’s final budget package is the result of a tense month of negotiations. The mayor struggled to convince a majority of aldermen to support a plan that relies on a $94 million property tax increase to close an unprecedented $1.2 billion 2021 budget shortfall, while rejecting demands from protesters and progressive aldermen to reallocate significant resources away from the Police Department.

The shortfall comes as the coronavirus pandemic has devastated the city’s finances.

The budget — made up of a series of revenue and spending ordinances — passed out of the Budget and Finance Committees last week in relatively close votes. The committee votes were read into the record Monday, but a final vote was delayed until a 10 a.m. Tuesday meeting, a routine maneuver for annual spending plans.

Lightfoot tweeted in defense of the plan Monday and put public pressure on any undecided aldermen, saying, “We have to stand up and make the right calls now.”

“The kicking-of-the-can-down-the-road mentality is what got us into a lot of the problems that are now coming home to roost,” she said.

While the property tax increase closes a portion of the budget gap, the city will also restructure and refinance its existing debt to fill $450 million of the 2020 shortfall and another $500 million in 2021.

It’s a move the administration concedes is a return to “scoop and toss” budgeting, an attempt to plug short-term deficits by adding to and extending future debt obligations.

Lightfoot has made concessions to aldermen since she presented her plan to City Council in an Oct. 21 speech. To avoid laying off more than 350 city workers, the city will borrow $15 million against the tax revenues of future cannabis sales, although the borrowing could be averted if a new round of federal stimulus funds materialize.

The amended budget also includes a $10 million increase in spending on violence prevention programs for a total of $36 million.

And $1 million is being proposed to fund two approaches to responding to some mental health emergencies.

The co-responder model, which would pair a mental health professional with a police officer, was announced as a pilot program by Lightfoot in October. But funding for a non-law enforcement approach was included only after the 18-member Progressive Caucus threw its support behind a proposal from Ald. Rossana Rodriguez Sanchez (33rd).

The funding to both models falls short of the $5 million that would be reallocated from the police budget to the Department of Public Health in the plan introduced by Rodriguez Sanchez.

The revenue portion of the budget passed out of committee with 26 votes —the bare minimum needed to secure passage. But others aldermen have signaled their support.

The property tax hike was advanced out of the Finance Committee 21-12, leaving the mayor needing five yes votes out of the 17 aldermen who were absent or not part of the committee.

Lightfoot’s chances of securing passage rose over the weekend as Alds. Maria Hadden (49th) and Andre Vasquez (40th) announced they would vote yes. Both are among the council’s most progressive members and are typically at odds with Lightfoot.

In a letter to constituents, Hadden said the inclusion of funding for the non-law enforcement response to some mental health emergencies is “ultimately where I committed my support for the budget.”

Other Business

City Council voted 49-0 Monday to cap the fees third-party delivery companies, like GrubHub and UberEats, can charge restaurants.

For months, restaurant owners have urged customers to order directly from their eateries instead of using third-party delivery services, citing the sometimes exorbitant fees. Other restaurants have launched in-house delivery to avoid the fees

The ordinance caps delivery fees for restaurants at 10 percent per order. Additionally, delivery companies are limited to charging restaurants for “any combination of fees, commissions, or costs,” including marketing fees, at no more than 15 percent of the restaurant’s monthly net sales processed through the individual third-party apps.

The measure will automatically expire after indoor dining has returned to at least 40 percent capacity for 60 days.

The delivery companies have opposed the measure, arguing it could increase customer costs.

“Pricing regulations like this one could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers. This legislation also removes options available to restaurants by limiting their ability to opt-in to additional services to help their business,” said DoorDash spokeswoman Campbell Matthews.

Following the committee vote, Robert Kellman of UberEats agreed, saying “this ordinance will force costs onto customers and drive down the number of deliveries, hurting drivers and restaurants when they need help the most.”

Because more than two-thirds of the council approved the measure, it took effect immediately.

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