TAXES, TUMULT AND TEACHERS: LIGHTFOOT’S FRAUGHT FIRST BUDGET ADDRESS
With teachers expected outside City Hall, mayor to unveil already controversial plan as an expected property tax hike looms
With striking teachers and their allies picketing City Hall, Mayor Lori Lightfoot on Wednesday will take the wraps off a 2020 budget that counts on a one-time fix, unpopular tax and fee hikes and a Springfield rescue to erase an $838 million shortfall — without raising property taxes.
The Chicago Teachers Union strike, nearly a week old with no end in sight, is hardly the ideal backdrop for a rookie mayor’s first budget address.
But Lightfoot’s “not-on-my-watch” promise to avoid a strike fell short. The contract package she has offered and concessions she has made have not been enough to end it.
As a result, Lightfoot will take the rostrum in the City Council chambers with teleprompters in front of her and controversy swirling around her.
Lightfoot might have to speak up to be heard over chanting strikers whose disciplined union has, so far, been winning the public relations war.
Will the circus-like atmosphere overshadow her message?
“That depends on what you in the media focus on. I don’t control that narrative,” she said.
“The city has a lot of other issues beyond the teachers strike. Obviously, that’s an important thing and that’s animated the narrative. But we have work to be done in the city, and we’re continuing to do that.… Yes, there’s a teachers strike. But the business of the city must and does and will go on.”
The biggest unanswered question about the mayor’s budget after more than a week of selected leaks is how much property taxes will increase if Lightfoot comes up empty during the Legislature’s fall veto session.
Two aldermen, who asked to remain anonymous, emerged from their closeddoor briefings believing a property tax increase would need to match the $100 million in annual revenues expected to be generated by an increase in the transfer tax on high-end home sales.
Lightfoot, still playing her cards close to the vest, made no apologies for leaving a giant hole in a city budget she’s required by law to balance on her own.
The mayor wants a graduated real estate transfer tax and a casino gambling fix — either through city-state ownership of a Chicago casino or a revised tax structure. Both already face long odds in Springfield amid a blockbuster corruption scandal that has spread from Chicago and the south suburbs to Springfield.
“It’s unusual, but I wouldn’t characterize
it as a hedge. It’s not a hedge when you’re really transparent about what the options are, but also what the consequences are if those options don’t come through,” the mayor said.
“I know it’s incumbent upon us to convince legislators to help us fix the tax rate regarding casinos . ... It’s also on our plate to convince legislators that a real estate transfer tax is in their best interest to help support the Chicago economy and help us deal with structural budget issues. The burden is on us. I accept that burden.”
Yet another question is whether Lightfoot plans to reopen any of the six mental health centers closed by former Mayor Rahm Emanuel.
Aldermen from across the city are so intent on reopening the clinics, they recently held up Lightfoot’s appointment of Dr. Allison Arwady as health commissioner because Arwady refused to make that commitment and even defended the closings.
But, during Tuesday’s briefings, aldermen were told that none of the six shuttered clinics would be reopened. The mayor hinted as much during an interview with the Sun-Times last week.
“The level of trauma that people are experiencing in this city is profound — and particularly our young people . . . . We need to have a community-based network of care,” Lightfoot said.
“Some people are not ever gonna go to a clinic. Some people prefer to have private doctors. Some people are comfortable in a community-based setting that’s kind of a mix of the two. We have to have a menu of choices at the neighborhood level that meet the needs of a full range of people who are experiencing challenges in their life.”
Even if Springfield comes through enough to avert an increase in property taxes, which Emanuel more than doubled, Lightfoot’s budget is in for a rough ride in an increasingly restive City Council.
Her congestion-reduction plan, which would triple the tax on Uber and Lyft passengers riding solo to and from downtown — and slap a 74% increase on ride-hailing trips in the neighborhoods — has taken a beating on social media.
Her plan to raise the Chicago tax on restaurant meals by one-quarter of a percentage point will push the total tax on downtown restaurant bills to 11%. Illinois Restaurant Association President Sam Toia said that might persuade suburban diners to eat out closer to home.
The mayor also plans to raise parking meter rates, frozen since 2013, to $7 an hour in parts of downtown. But that would be unpopular, and besides, pocketing the $7 million in annual revenue, instead of forwarding it to Chicago Parking Meters LLC, could be on shaky legal ground.
The widely despised long-term lease on city parking meters, with 65 years left, has this clause: “The Concessionaire shall, during the Term, have the right to collect and retain all of the Metered Parking Revenue derived from the Concession Metered Parking Spaces, and the right to pledge and assign such Metered Parking Revenues as security for any indebtedness incurred by the Concessionaire.”
Sources said the city plans to get around that by using the $7 million to offset socalled “true-up” payments that compensate the concessionaire for parking spaces taken out of service, such as for construction projects or special events.
The mayor also plans to eliminate most, if not all, of the 3,100 vacant city jobs, abolish Emanuel’s slow-starting Infrastructure Trust, declare a giant tax increment financing surplus and sunset five large TIFs.
But the Civic Federation is none too happy about Lightfoot’s plan to refinance $1.3 billion in city debt and take the entire $200 million savings up front.
“The fact that they’re going to be using the [sales tax] securitization vehicle does create some concerns for how they’re going to make do without that revenue in the future,” Civic Federation President Laurence Msall said Tuesday.
“And if they are taking all of the savings over the life of the bonds all in the first year, that certainly is not best practice and creates real questions as to how you’re going to pay that debt service next year and in future years.”
Ald. Gilbert Villegas (36th), Lightfoot’s City Council floor leader, was asked how tough it will be to round up the 26 votes needed to pass an already controversial budget with a property tax looming over it.
“If it does come to that, we’ll have to see how high . . . . I haven’t talked to the members about that yet because I’m focused on Springfield,” Villegas said Tuesday.
“This is going to be a challenging budget. . . . We’re relying on Springfield for some assistance. The issue going on with CPS and CTU. There’s just a lot of balls in the air. I’ve got to try to figure out how to land this plane.”