Facing a $1.2 billion pandemic-induced shortfall, Mayor Lori Lightfoot this week introduced a budget that relies on $94 million in increases to Chicago’s property taxes, cuts of hundreds of city workers, as well as furloughs.
WBEZ political reporter Becky Vevea spoke with the mayor in a brief virtual interview Thursday night to dig more into her budget plan.
This transcript was edited for brevity and clarity.
How are you doing?
I’m still standing. I’m doing fine. This is the budget season so there’s always a lot to do. A lot of people that want to have a conversation and understand the particulars of the budget. So it’s a very busy time for all of us.
This budget — at first glance — appears to grow by almost $1.2 billion dollars. But when you look deeper, nearly all of that increase can be attributed to state and federal grants. Is it risky to rely so heavily on grants?
Most of that growth has been at the Department of Public Health. There’s certainly a measure of risk, but we feel comfortable with the level of funding that we received from the federal government in terms of the grants so far. Obviously, we want more.
I’ve been an advocate for providing unrestricted funds for revenue replacement. We’re going to keep advocating for that. But look, public health is something that’s essential in this time, and I’m grateful that the CDC and HHS have recognized that and we’ve certainly tried to leverage those resources as best we can.
You’re also proposing a giant refinancing deal to close the gap for both 2020 and 2021. Today, your top budget staff admitted this is a “scoop and toss” that pushes debt out into the future. Why fall back on this old bad habit that the city has had?
First of all, $1.2 billion, I’m told, is the largest deficit ever in the history of the city, 65% of which is attributed directly to COVID. We were well within our budget project projections for 2020, until we started to see the economic meltdown occasioned by closures related to COVID-19.
We looked internally first. There’s a number of efficiencies and savings that we were able to generate in how we operate city government and how we deliver services to our residents. But that was not nearly enough. So then we started looking at personnel. We started with vacancies. We looked at layoffs. We looked at furloughs. But even with all of that, it still was not enough.
The borrowing is something that the city does every year. Obviously, when you see interest rates as low as they are, we certainly wanted to take advantage of it. We’re being very transparent about the fact that this is a one-time measure occasioned by hopefully a once-in-a-generation, once-in-a-lifetime economic meltdown.
Property taxes. This year’s increase is expected to generate $94 million, but you’re also proposing to make increases automatically going forward. Do you worry this will impact the cost of living the cost of housing and also just people wanting to stay in the city?
I’ve been very clear that property taxes are a last resort, but this is a “last resort” kind of budget. There are no easy choices here. We had to use a lot of different tools to be able to climb up this huge mountain of $1.2 billion deficit. We’ve done it, I think, in a way that is modest. If you look at the average price of a home in Chicago, which is $250,000. That’s a $56 increase annually. What we’ve seen over the last 20 plus years is: no property tax increase, no property tax increase, and then, this huge spike.
By being steady and transparent and having state stability and predictability, our hope is to avoid any kind of a huge spike in future years because we’re being honest with the taxpayers, telling them right now, what’s on the table. And obviously, every year, there’ll be a vote on that property tax increase.
There are some efforts across the city to consider something known as a “People’s Budget” — communities are calling for drastically different ways of allocating city money. The city did solicit feedback in this process. How did you incorporate that feedback? And what do you think of this idea?
I haven’t heard too much about the People’s Budget, but obviously we value feedback. We held a total of eight town halls, mostly live-streamed on Facebook, which gave us the opportunity to reach a really thousands of more people. We also have a bunch of ambassadors that went out and talked to a range of people on a variety of issues and brought those back to us and to me directly. I’ve listened to a lot of suggestions that people made to try to incorporate as many of those suggestions as best we could.
You just announced more restrictions for bars and restaurants as COVID-19 cases rise. Do you worry about a second wave of coronavirus further decimating the budget?
We are in a second wave. There’s no doubt about it. We model based upon current information. But if we have a full-fledged, months-long second wave, we’re going to have to readjust because that will have a significant impact on our economy.
Obviously in 2021, we anticipated that we would still be in COVID-19, that there will be certain restrictions, and that our economy would not fully recover until sometime late in the year and into 2022. But God forbid, we go back to seeing the kind of case surge that we saw earlier this year, that will have a dramatic impact on revenues.
Setting aside those grants. This budget is flat from last year to this year. But last year, it grew by a billion dollars. I’m wondering if, looking back, there’s anything you wish you’d have done differently in your 2020 budget?
Part of why it grew is because we made a lot of investments in people and places and neighborhoods that hadn’t been made in decades. I make no apologies for investments in affordable housing, in mental health, in homeless prevention and violence intervention. Also, We needed to make those kinds of investments to really improve the quality of life for people across the city that had been starving for resources. I think there’s a moral imperative for us to keep doing that. And we’re urging the City Council to continue those investments into 2021 and beyond.
There’s a real dollars-and-cents reason why you do it. When you invest in people, particularly the early stages of life, when you spur economic development by betting on small business, when you make infrastructure improvements in neighborhoods, that’s playing chess, not checkers. You’re strengthening communities. You’re giving people more of a stake in the future. In Chicago, you’re growing the tax base, and you’re going to get a return on that investment.
I want to talk about the Police Department. Before you were mayor, you chaired a task force that recommended “a fundamental rethinking of the use of force” by police. And just last week, a similar group of community members recommended 155 different changes in use of force. But your police department only accepted five. How is that a fundamental rethinking of the use of force?
Not so. No, that’s, that’s not, that’s not so. No. 1. Since the taskforce issued its report, the use of force order has been fundamentally changed, and this working group was spurred by the independent monitor. If you look at it, a third of what they were suggesting already exists in present policy.
For example, one of the things that they recommended is that there had to be documentation anytime an officer pointed as a weapon at a civilian. That’s baked into the consent decree. It’s been a policy of the police department for seven years. About a third of the things that they recommended had already been made into departmental policy. Why they didn’t know that given the access that they had to leadership and to the policies and general orders, I don’t know.
Another third of the recommendations spoke to things that were either beyond the purview of the Police Department in the city, or were just fundamentally contrary to law. For example, they were asking for independent autopsies anytime the police were involved in a shooting that resulted in death. The city doesn’t have, nor does a police department have the ability to dictate to the coroner and a medical examiner who does an autopsy.
We want and we value community engagement and input. And we agreed to participate in this process because it was mandated by the consent decree, and the superintendent and his team are trying to engage these folks. Community engagement is going to be a hallmark of this administration and it continues to be, and it’s not going to be any different from the Police Department.
This budget shifts about $55 million in costs back to Chicago Public Schools. Their budget also relies on federal money that hasn’t materialized yet. Do you worry about mid-year cuts at Chicago Public Schools?
I don’t anticipate that happening. We believe that it’s appropriate in accounting transparency and accountability for those costs to be reflected on the CPS budget.. We’re going to help them transition on some of those costs, but I think in order for that board to understand the entirety of what the costs are, and for the public to see that … it was important to move those things back to CPS. This is something that we started in last year’s budget, we’re just taking the next steps.
Regarding money from the federal government, CPS still has CARES Act money that will carry over into this year’s budget. it’s my expectation that if there is a stimulus, the Chicago schools will be covered.
Do you think you have the votes to get this budget passed? If not, how do you plan to get support from aldermen?
We’re gonna work hard to earn 26 votes to get the budget passed. There’s going to be someone who won’t vote for it. I think we have a pretty good sense of who those are. Aldermen recognize this is a really tough year. Our team has been working diligently since the summer on the 2020 budget. We’ve been very responsive in asking for specific revenue ideas, specific ideas around efficiencies and we’ve reflected some of those suggestions in the budget itself. We’re gonna work hard to answer questions, be responsive, and work hard to get those votes. We manage to 26, not to 50, not to a rubber stamp City Council. We have an obligation to perform our fiduciary duties. The worst case scenario, God forbid, a budget doesn’t pass, nobody’s getting paid and residents are going to be the poorer for it. People recognize that. We’ll pass a budget.
This is a really tough year, and there were absolutely no easy choices in constructing this budget. But I want everybody to know that we’ve worked very, very hard. We have sweated the details. I don’t take lightly the prospect of layoffs. I’ve had a lot of sleepless nights worrying about that very thing. But we know we have an obligation to deliver for residents, and we’re going to do that.
Becky Vevea covers City Hall for WBEZ. Follow her @beckyvevea.