CHICAGO — The city is facing a nearly $130 million budget gap for the next fiscal year — but that’s a huge improvement from other pandemic years, officials announced Wednesday.
City officials expect there to be a $127.9 million budget gap in fiscal year 2023, significantly down from a budget gap of $733 million for fiscal year 2022 and $1.2 billion from the year before.
The new budget predicts Chicago will continue to see growth in revenue after it fell during the earlier years of the pandemic, according to a Mayor’s Office news release. But it also predicts expenditures will rise by about $228 million due to personnel costs, pension obligations and contractural services.
“We are now living within our means and have started on the true road to financial stability and recovery,” Lightfoot said at a Wednesday news conference.
City officials are looking for ways to find savings to balance the 2023 budget, according to the Mayor’s Office. They’ll first look internally, to City Hall agencies, to see where money can be saved, Lightfoot said. Those measures will be announced in the fall.
The city will raise property taxes by more than $42 million — but that’s less than expected, Lightfoot said.
In Chicago, property taxes are tied to the consumer price index — which means that the tax rate changes with inflation. Inflation is at its highest point in years, though, which means property taxes would normally go up. The city could calculate residents’ property tax using a consumer price index of 8.5 percent based on inflation, or 5 percent based on the city’s cap for the consumer price index.
Instead, the city will seek to give residents a break by using a consumer price index of 2.5 percent to determine residents’ property tax, Lightfoot said.
“If 2021 was our ‘pandemic budget,’ and 2022 was our ‘recovery budget,’ this one is our ‘stability budget,'” Lightfoot said.
The city’s been working on fulfilling its pension obligations, paying down debt and reducing delay tactics for payments and union negotiations, Lightfoot said. Part of that: The city received $40 million from Bally’s for its upcoming casino and has put it all toward Chicago’s annual required pension contribution, according to the Mayor’s Office.
In recent years, the city’s also increased investments in violence prevention, combating climate change, mental health funding and in building affordable housing, Lightfoot said.
Click here to view the city’s 2023 budget forecast.
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