Chicago is now facing a $700 million budget shortfall this year due to the COVID-19 economic downturn, and Mayor Lori Lightfoot acknowledged Tuesday that “2021 isn’t looking great, either.”
Budget officials released the new projected 2020 deficit after reviewing the numbers from March and April, when most of Illinois’ economy and amusements were shut down to slow the spread of coronavirus. Lightfoot said tax revenue from hotels, restaurants and other large events tanked while the stay-at-home orders were in place.
“While this budget shortfall is grim, what would have been worse is if we would have seen more people die and more people infected with the virus if we hadn’t sheltered in place,” Lightfoot said, noting that City Hall will continue to update the numbers as revenue comes through.
The city pushed back tax deadlines for businesses at the start of the stay-at-home order. But city budget department spokeswoman Kristen Cabanban says the new $700 million estimated shortfall for the remainder of 2020 accounts for those shifts.
“We will continue to evaluate our revenues, every month as we have been,” Lightfoot said at a news conference Tuesday.
The new projections come less than 24 hours before the City Council’s Committee on Budget and Government Operations is scheduled to vote on how to distribute the more than $1.1 billion in federal stimulus from the CARES Act.
Budget Director Susie Park and Chief Financial Officer Jennie Huang Bennett outlined where the money would go during a conference call with reporters late Monday. Chicago’s two airports will get the most, at $376.7 million, followed by the public health department’s $189.3 million. Housing related relief efforts are in line for roughly $57 million and small businesses are in line to get $35 million.
But Lightfoot emphasized that federal stimulus money will not offset the sobering shortfalls expected for 2020 and 2021.
To grapple with the unexpected deficit, the city will reprioritize hiring plans and refinance debt.
Lightfoot said a property tax hike is still a last resort.
“Our finance team can attest, when we talk about options, they know that that has to be at the end of the table,” Lightfoot said. “Bring me other options first.”
Becky Vevea covers city politics for WBEZ. Follow her @beckyvevea.