Politics
Chicago Alderpeople React to City’s $89M Budget Shortfall, Debate Debt Collection
Mayor Brandon Johnson said Chicago is staring down a midyear budget deficit, and he’s pointing the finger at City Council.
City officials said last week Chicago is grappling with an $89 million shortfall — revised down from the $130 million figure the mayor announced earlier this month.
Last year, alderpeople rejected Johnson’s proposed head tax on the city’s largest companies and instead approved a budget that relied on alternative revenue sources, including selling city debt to private collectors and licensing advertising on city light poles.
So far, Johnson said, much of that expected revenue hasn’t materialized.
“Corporate-aligned members of the City Council chose a different direction and adopted their so-called alternative budget,” Johnson said at a news conference earlier this month. “Throughout that process, we raised concerns about the assumptions in that plan. Not to oppose for the sake of opposing, but because Chicagoans deserve honesty about the risks of budgets that rely on fines and fees.”
Alderpeople had expected to collect $89.6 million by selling city debt to private collectors, $29.3 million by selling advertising spots on city light poles and kiosks and $6.8 million in video gaming fees. So far, Chicago has collected none of that money.
Johnson was initially skeptical of City Council’s measure to sell debt to private collectors, calling it “immoral” and saying the majority of debts would be extracted from working-class Chicagoans. Earlier this month, Johnson said his administration has tried to find a buyer for city debt to no avail.
Alds. William Hall (6th Ward) and Scott Waguespack (32nd Ward) joined “Chicago Tonight” to discuss the shortfall. Here’s a snapshot of where they stand:
On what’s behind the midyear deficit:
Waguespack: “It’s $100 million short because the mayor didn’t implement the budget that was passed. As you recall, he didn’t veto that budget. He basically said he was gonna move forward with it. And what we’ve seen is a failure to execute on what the legislature decided to pass. That’s where we are at this point, just a failure to execute by the Johnson administration.”
Hall: “Let’s look at one of their streamlines of revenue, which was video gaming. They said that that would generate XYZ amount of million — 3,300 slot machines had to be online. That was not realistic. Second, debt collection was a big deal. They thought that $90 million would be available by simply calling people with 1-800 numbers on their cellphones. Nobody wanted to touch our debt because people in Chicago just don’t have it. So those two budget lines of revenue were what they thought would be sufficient enough to balance the budget. … It was almost like a check that was written with no money in the bank, and now everybody’s crying about the fact that the check is bouncing.”
On whether the mayor is slow-rolling collecting revenues:
Waguespack: “I don’t think they (the Johnson administration) tried hard enough. It’s very evident that when other cities are doing this, you’re capable of doing it in Chicago. I’m talking not just in Illinois, but around the United States. I know the mayor is out there saying it’s immoral to collect somebody’s debt from someone who parked at a fire hydrant or a developer who’s not paying their fines or fees. But those are things that we’ve been collecting for decades. Other cities do it, too.”
On whether debt collection is immoral:
Waguespack: “The mayor has basically allowed $1 billion in additional debt to be created here over the past three years that he’s just not collecting. He’s decided not to do that because it’s immoral. But if we can’t move forward and say that people have to pay for something that they did — and I’m not talking about collecting from people who have to have water in their homes. Nobody has ever said that in their budget coalition. That is the mayor going out and misdirecting this entire budget. We’re also talking about collecting from city employees in our sister agencies who owe tens of millions of dollars that the mayor refuses to collect on. Those are people at CPS, at the parks, at CHA. Everybody needs to make sure that if things are gonna be fair and equitable, that they’re paying for the wrongs that they did.”
Hall: “Let’s look at the conditions that every Chicagoan and American is facing. We’re down 11% on disposable income, meaning that 11% of what people had to spend, they don’t have it anymore. The cost of food is rising. The cost of gas is almost at an all-time high. Affordability is the No. 1 issue that people are facing across the city of Chicago. How dare we say to people that are down 11% and then to the 3,000 that are getting ready to lose their jobs, ‘Pay because you made a mistake.’ How many of us have not paid a parking meter? I’m not justifying irresponsibility, but where is the compassion?”
On why Chicagoans’ debt hasn’t been sold yet:
Hall: “The reason why the debt did not sell is because people know in the debt market that Chicagoans are broke. People are hurting. The average income in my ward is only $38,000 a year. Only one neighborhood is solvent. And that one cannot carry the six. So Chicagoans don’t have the money, so the best the 31 (members of City Council who passed the alternative budget) decided to offer to Chicagoans was more pressure to get money that they don’t have.”
On Johnson’s accusations that City Council members are aligned with corporations:
Waguespack: “That’s just not the case. If you look at what he is billing for the small businesses medium and large in this city — it’s hundreds of millions more than when he came in. He’s not even going after the people that we’ve said to go after, when we go for collections. We’ve said we should go after everybody. And he had a day right before the budget, where there was $8 million in uncollected fees from a developer. He allowed them to pass an ordinance or go ahead with not paying that debt. So, he’s not even really taking the effort to get that done.”
