The baton is officially out of Rahm Emanuel’s hands and now in the possession of Mayor Lori Lightfoot. Despite that leadership change, there is at least one thing here to stay: the city’s troubling finances.
Those fiscal woes include $28 billion in unfunded pension liabilities and a projected deficit of $740 million.
Can Lightfoot make it to the 2020 budget finish line with a viable solution?
Here are what some of Chicago’s financial analysts are saying:
Amanda Kass, associate director of the Government Finance Research Center at the University of Illinois at Chicago, says she would like to see Lightfoot and her team do three things: increase communication on budgets and finances to the public; expand the Council Office of Financial Analysis; and “evaluate financial proposals in terms of equity and policy dimension, in addition to revenue generation and budgetary impact.”
Michael Belsky, executive director of the Center for Municipal Finance at the University of Chicago’s Harris School of Public Policy, recommends a “four-pronged financial approach” for Chicago’s new mayor. One of those prongs includes applying outcome-based budgeting. “Rather than having a base budget, you assume the base is there every year and then you might adjust it up or down based on economic conditions,” he said. The fluctuation in the base is dependent on the mayor’s goals and how she works to achieve those goals. The plan to reach the goal is ultimately what gets funded, he said.
Ed Bachrach, founder and president of the Center for Pension Integrity, said the Lightfoot administration needs to look outside the city for solutions. “Los Angeles has twice the land area of Chicago and 45% more people, and yet it spends about the same number of dollars for its fire and police departments,” he said. “This is not a political statement of one aisle or another because L.A. is a heavily democratic, heavily union town. Yet, if Chicago had parody with L.A., we’d save $650 million per year in those two departments.”
Kass, Belsky, Bachrach and Laurence Msall, president of The Civic Federation, join us in discussion.
Related stories:
Pension Plan: How Mayor Emanuel Hopes to Confront Pension Obligations
Mayor Emanuel Prepares to Release His Final City Budget
A Chicago Pension Fix? Using Revenue from Public Assets
