PS Cities News

After weeks of political acrimony, the City Council on Monday could be poised to approve Mayor Brandon Johnson’s revised $17.3 billion budget — minus a $68.5 million property tax increase — averting what would have been the first budget shutdown in its history.

Getting to the vote, should it happen, has not been easy.

If Johnson manages to deliver his $17.3 billion spending plan and $165.5 million tax package to support it, he will have secured victory on the most important Council vote of the year — but only after making several rounds of changes and calling off a vote last Friday he was destined to lose.

Although Chicago property owners bracing for reassessments have been spared a double-whammy, the Chicago Board of Education will once again hit them with a property tax increase that amounts to the maximum allowed by state law.

The mayor’s revised budget also would hit Chicagoans in the wallet in a host of other ways, such as increased amusement taxes on tickets to live events and streaming services; higher taxes on cloud computing, business software and equipment leases; and higher taxes on parking and downtown congestion.

The city also hopes to generate $11.4 million in additional revenue from “automated speed enforcement” presumably by adding more speed cameras in wards where alderpersons allow it and $4.6 million by raising an array of license fees, transfer fees and fines as well as the cost of residential parking permits.

Backing off a property tax hike

The mayor originally proposed a $300 million property tax increase that broke his campaign promise to hold the line on property taxes, then agreed to cut it in half after the Council took the extraordinary step of rejecting it by a unanimous vote. He then tried for a $68.5 million property tax increase, to no avail.

Johnson also proposed a 34% increase in the liquor tax, then agreed to scrap altogether after an outcry from the hospitality industry and border ward alderpersons whose bars, restaurants and liquor stores could lose business to surrounding suburbs.

The mayor agreed to restore 162 Chicago police jobs tied to implementing a consent decree outlining the terms of federal court oversight over the Chicago Police Department after Illinois Attorney General Kwame Raoul threatened to ask a judge to hold the city in contempt.

And he cut $90 million worth of spending from federal pandemic relief funds, in part, by scrapping a second round of guaranteed basic income and a small business assistance program.

With all of those changes, he was still seven votes short of the 26 needed for passage. Friday’s humiliating delay forced the mayor back to the drawing board to hunt for more votes over the weekend.

To get those votes, he scrapped the $68.5 million property tax increase altogether and proposed saving $40 million by skipping what a top mayoral aide described as a $40 million advance payment on the loan taken out to buy the now-demolished Michael Reese Hospital. That land would have held an Olympic Village for the 2016 Games, but they went to Rio de Janeiro.

The latest changes also proposed $10 million in “cost recovery” by charging organizers of ticketed events for police and traffic services and by better scheduling those events to reduce overtime costs.

The final budget also assumes other savings: $1 million by cutting 10 jobs in the mayor’s office; $2.8 million by eliminating middle-management jobs of deputy commissioners and their assistants; and $5 million through unspecified “energy and facilities management efficiencies.”

Still not good enough, says Council’s ‘Common Sense Caucus’

For 15 members of the so-called “Common Sense Caucus,” the mayor’s final offer barely scratched the surface.

They demanded $823.7 million in cuts that include eliminating the $61.3 million-a-year Office of Public Safety Administration and scrapping Johnson’s $50 million plan to create 2,000 more summers jobs and increase spending to combat homelessness. They also wanted to cut the $435,000-a-year budget for the office of the vice mayor, a post held by Ald. Walter Burnett (27th).

For all the concessions Johnson was forced to make, Civic Federation President Joe Ferguson was not impressed.

He characterized Monday’s vote as an effort to “avoid actually doing anything other than get to 26 votes,” he said.

“We are at the end of the runway and the city has to get busy about its structural problems,” Ferguson added, but in this budget, there seems to be no understanding that fact.

“The measures taken here … do not put us in any better situation for 2026, where the challenge will be even greater. That is what the rating agencies want to see. They’re not looking at whether or not we have a budget by Dec. 31,” Feguson said of the all-important bond rating that determines city borrowing costs.

“They’re looking at whether or not that budget goes in reverse with regard to bad practices … and manifests an intention through substantive measures to begin to address the true structural challenges the city has. This doesn’t do it. … This is largely a revenue and one-time solutions budget. There is no leaning into the expenditure side. No leaning into the revenue side.”

Some ‘mistakes,’ aide says, but a ‘good process’ in the end

Senior mayoral adviser Jason Lee acknowledged “there are always mistakes” and the Johnson administration made a few that may have contributed to contentious negotiations and distrust with a Council emboldened by the mayor’s anemic public approval ratings.

But, Lee argued, the sometimes messy process was no different than what goes on all of the time in “every other body of government.” And he denied Johnson will pay a political price for his stumbles.

“We’re paid to do a job. It can be difficult. It can be easy. Whatever. If I’m the public, the only thing I want to know is … what was the outcome? What did we achieve? … What does that mean for me as a resident of the city of Chicago,” Lee said.

“This was a negotiation. And the outcome is not bad at all given the realities that we face. There are major efficiencies in this budget. There’s investments in this budget. There’s some new revenue in this budget. Fiscal obligations are met in this budget. What is the outcome that people should be upset with?”

Lee denied it was a mistake for the mayor to introduce a budget that included a $300 million property tax increase at a time when property owners have or will be hit by reassessment increases.

Property taxes are “the most widely known predictable revenue currently available to municipal governments in the state of Illinois” and, therefore, it made sense to propose it to chip away at the city’s structural deficit, Lee said.

“What we said from Day One is, we can work with the Council on finding other forms of revenue to help us meet our obligations, fund our government, make some investments and not have to cut services. … That was achieved in this budget,” he said.

“By having a structural place holder like property taxes, that created the space for a conversation on revenue that was available to us. Ultimately, that was a good process.”