Labor Proposal to Save $272M Won’t Avert Layoffs or Tax Hike, Mayor’s Office Says

(Jürgen Polle / Pixabay)(Jürgen Polle / Pixabay)

A proposal from the Chicago Federation of Labor that union officials contend could save the city of Chicago between $195 million and $272 million will not avert a property tax hike and layoffs in 2021, Mayor Lori Lightfoot’s office said Tuesday.

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Developed by Pennsylvania-based Public Works, the proposal emphasizes “recurring, long-term structural improvements” rather than new sources of revenue, service cuts or borrowing.

“For the past several weeks, Chicago’s unions have worked diligently to identify cost-saving measures that will eliminate the need for workforce cuts without diminishing desperately needed city services,” said Chicago Federation of Labor President Bob Reiter. “We will continue to identify more savings over the next several weeks.”

Reiter said he wanted to work with Lightfoot’s budget staff to incorporate those proposals into the spending plan that has been the subject of more than two weeks of hearings by the Chicago City Council.

However, Lightfoot spokesperson Anel Ruiz said that “much of the report reflects efforts that we implemented as part of the 2020 Budget or are included in the 2021 Budget proposal under current consideration by the City Council.”

The full City Council is scheduled to hold a public hearing on the budget on Nov. 16, with final approval set for Nov. 24.

READ: Lightfoot Proposes Slashing Positions, Hiking Taxes to Help Fill $1.2B Budget Gap

“In the waning days until the council votes on the 2021 Budget, we will continue to engage with the CFL on these important issues,” Ruiz said in a statement. “We look forward to continuing this dialogue with our partners in labor, and to keeping the lines of communication open about elements from the report we could implement as we work to make the difficult but responsible budget decisions necessary to keep Chicago on a path toward long-term growth.” 

The biggest chunk of savings proposed by the Chicago Federation of Labor — between $114 million and $151.4 million — would come from changes to the city’s health care programs.

The city could save another $28.6 million to $43 million by reducing the number of supervisors, so that each manager oversees 10 employees, up from the current level of seven employees, according to the proposal.

Applying that ratio of supervisors to employees to the Chicago Police Department would save another $17.4 million to $26 million, according to the proposal. However, that change would violate the consent decree imposed by a federal court that found that Chicago police officers need more supervision to ensure they protect the rights of Black and Latino Chicagoans.

Lightfoot’s plan would close a projected $1.2 billion budget gap in 2021 by hiking property taxes and laying off employees. 

Throughout the more than two weeks of hearings, aldermen pleaded for other options amid a raging pandemic — but found their requests stymied by the fact that the city has few other options in what Lightfoot has called the “most challenging budget in Chicago’s history.”

READ: Aldermen Balk at Plan for Property Tax Hike, Layoffs To Fill Budget Gap

It’s not clear whether the mayor has at least 26 votes to approve her plan to increase taxes by a total of $93.9 million in 2021.

As Budget Committee Chair Ald. Pat Dowell (3rd Ward) gaveled the hearings to a close just before 8 p.m. Tuesday, she thanked her colleagues on the City Council and the city staff for making the virtual hearings possible.

“Now let’s go make sausage,” Dowell said, indicating a significant negotiation over the final spending plan was in the works.

Aldermen are also less than enthusiastic about Lightfoot’s plan to borrow an additional $1.7 billion to refinance existing city debt to save $450 million in 2020 and $501 million in 2021, returning the city to the era of scoop and toss, a budget-stretching tactic reviled by fiscal watchdogs as a costly gimmick.

READ: Chicago to Return to ‘Scoop-And-Toss’ Borrowing, Chief Financial Officer Acknowledges

The plan means it will take the city an additional eight years to pay off the debt — increasing interest costs and adding to the city’s already large debt burden, officials said.

Aldermen have also objected to the plan to save $15 million to order all non-union employees to take a five-day unpaid furlough and lay off 350 employees in March — unless the federal government approves a relief package for states and cities.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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