Alderman: Budget Gap Could Be As High As $1.3 Billion

Just how big is the city’s budget deficit? And will Mayor Lori Lightfoot propose new taxes to close it? The mayor will likely spell out some of that in a much-anticipated “State of the City” address Thursday evening.

On Wednesday, some hints.

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Lightfoot’s administration spent the day briefing aldermen on what to expect in the address, though some aldermen said that even the briefings were vague on details. The mayor herself said a lot of jaws dropped when she referenced the tough fiscal situation.

Fifteenth Ward Ald. Ray Lopez, a frequent critic, says he crunched the numbers they gave out – from higher pension payments, to police settlements, new union contracts and more – and said he expects the deficit to be as much as $1.3 billion. But instead of laying out what taxes to raise, Lopez says the mayor’s team focused on cuts and efficiencies in government.

“Efficiencies will only get us so far,” Lopez said. “She definitely wants to see what opportunities that a restructured casino could get for Chicago, some of the real estate transfer taxes in the news as well, but at the end of the day, when you’re looking at such a high number, it’s going to be impossible to do it with any one trick alone.”

Other aldermen have put the deficit between $750 million and $1 billion. Within this tight fiscal situation, a group of progressive aldermen on Wednesday said they’re going to fight for more spending in the budget for vital public services and taxes on the wealthy to fund them. They have some power in numbers, too: they say their caucus could number as many as 18 members.

One of them says there is one area in which Lightfoot has promised no new spending.

“We’re over-policed in our community and I don’t feel safe, so how can we allocate that money to other areas?” said Ald. Jeanette Taylor (20th Ward). “So she said we’re not going to spend more money on police, which makes sense to me.”

Ald. Susan Sadlowski Garza, 10th Ward, says she expects the budget negotiation process to ultimately be successful, because the mayor has involved aldermen at an early stage.

“This is the first time in four years that we are brought to the table to actually ask our suggestions and revenue ideas. That never happened before,” Garza said. “It’s exciting to be part of the process instead of being given a piece of paper saying ‘here’s what we’re doing.’”

Lightfoot on Wednesday sought to downplay any expectations of specific budget solutions in Thursday’s address. She held a roundtable discussion with top members of her cabinet in the morning to mark her 100th day in office.

So if residents are looking for specifics on whether or not their taxes are going up – they will be disappointed Thursday evening.

“The speech tomorrow night is not a budget address, we’re not going to be laying out specific detail of, here’s what our costs are, here’s what the supports are going to be for the departments. That’s not what tomorrow night is about,” Lightfoot said. “It’s about the start of a transparent process about where we are, where we’ve come, and what we see as a path forward, and asking people for their help.”

Some of the ideas that have been reported on include going to Springfield for help on things like instituting a broader sales tax that would apply to more services, and a higher real estate transfer tax. And some aldermen are talking about a potential plan to broaden out the long-term pension funding responsibilities, perhaps aiming for a lower required funding level in 30 years, which could provide immediate budget relief.

But budget watchdog Laurence Msall of the Civic Federation says that scenario could be almost disastrous in the long term.

“Moving the goal posts, moving the funding schedule around, that’s not going to stabilize the city’s finances, in fact it may push the police and fire pension fund in danger of running out of funding in two or three years if we have an economic downturn,” Msall said.

After Thursday’s address, the mayor plans to make some public appearances to solicit community feedback, and she wants aldermanic ideas for revenue.

The mayor will deliver a full budget address in October.

Follow Paris Schutz on Twitter: @paschutz

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