Boosted by Wall Street, Lightfoot Says Budget Set for Final Vote Is Path to Long-Term Stability

Video: Alds. Silvana Tabares, Harry Osterman, Scott Waguespack and Maria Hadden discuss the ongoing vaccine mandate battle, voting on the budget and more. (Produced by Alexandra Silets)

Mayor Lori Lightfoot made her closing argument for her $16.7 billion 2022 budget on Tuesday, saying the spending plan would allow Chicago officials to “build a stronger and more prosperous city” amid the wreckage of the continuing COVID-19 pandemic. 

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To make her case, Lightfoot pointed to the decision by Fitch, one of a handful of Wall Street ratings agencies, to revise its outlook for Chicago from negative to stable, reversing the decision the agency made a year ago in the midst of the pandemic’s deadly second wave

“The City of Chicago is on the road to recovery, and this year’s budget will allow us to build a stronger and more prosperous city,” Lightfoot said, calling the decision by Fitch “an important milestone for Chicago’s growth and development.” 

Fitch affirmed its BBB-negative rating of Chicago’s credit, which is one notch above junk status. Fitch’s rating, as well as those from other ratings agency, helps determine how much the city has to pay in interest to borrow money, much like an individual’s credit score. 

That is crucial, because Lightfoot’s plan calls for the city to refinance $1.2 billion to save $250 million and to borrow an additional $660 million to fuel the Chicago Recovery Plan, which will spend $1.9 billion on a host of priorities championed by progressives, including affordable housing, mental health, violence prevention, youth job programs and help for unhoused Chicagoans. 

The mayor’s spending plan “reflects the ongoing revenue recovery across the city and the significant infusion of federal fiscal aid that ease pressure on the city’s investment grade standing,” according to Fitch Ratings. “Chicago still faces considerable financial challenges and the size of recent years’ budget gaps illustrate its sensitivity to economic setbacks.” 

In an interview on “Chicago Tonight,” Ald. Harry Osterman (48th Ward) praised the budget set for a final vote on Wednesday as an “historic” plan that would invest in communities ignored by the city for decades and ravaged by the COVID-19 pandemic. 

Ald. Scott Waguespack (32nd Ward), the chair of the City Council’s Finance Committee, said the spending plan was a “sound and solid” budget that addresses the city’s rising pension costs and heavy debt burden while helping Chicagoans hit hardest by the pandemic. 

Ald. Maria Hadden (49th Ward) said she was pleased that the 2022 budget includes $52 million more than in 2021 for mental health services, including $15 million to expand a pilot program to send paramedics and mental health professionals, either with or without a police officer, to Chicagoans who call 911 for help. 

Hadden also secured an additional $5 million in the budget to expand efforts to renovate single-room occupancy hotels, which often house the poorest Chicagoans in the worst conditions as part of the Chicago Recovery Plan’s $635 million earmarked for affordable housing.

Hadden said a subcommittee charged with tracking that spending would reassure Chicagoans that it was not being wasted. 

However, Ald. Silvana Tabares (23rd Ward) said she opposed the spending plan because it did not do enough to help small businesses in her ward struggling to recover from the pandemic and hire new employees. 

Tabares said the city should cancel the plan to use $31.5 million to send 5,000 low-income households $500 per month for a year as part of what would be the nation’s largest test of a universal basic income. 

That proposal is opposed by several of the more conservative members of the City Council, including Tabares, as a “give away” that will not alleviate poverty. 

The Chicago Rescue Plan includes $87 million to help small businesses and expand Chicago’s workforce. 

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

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