Chicago aldermen approved a new city budget. Here’s what it means for you.

Chicago aldermen approved a $16.4 billion spending plan on Monday that keeps the property tax rate flat and increases police spending.

Mayor Lori Lightfoot
Mayor Lori Lightfoot presides over a Chicago City Council meeting to deliver the 2023 Budget Address at City Hall last month. Ashlee Rezin / Chicago Sun-Times
Mayor Lori Lightfoot
Mayor Lori Lightfoot presides over a Chicago City Council meeting to deliver the 2023 Budget Address at City Hall last month. Ashlee Rezin / Chicago Sun-Times

Chicago aldermen approved a new city budget. Here’s what it means for you.

Chicago aldermen approved a $16.4 billion spending plan on Monday that keeps the property tax rate flat and increases police spending.

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Chicago aldermen have narrowly approved Mayor Lori Lightfoot’s $16.4 billion election-year spending plan for 2023 that includes no property tax hike, increased spending for police and continues to rely on more than a billion dollars in COVID-19 relief funding for violence prevention, mental health and other social service programs.

“Though our work is by no means over, we might take this moment to reflect on and be proud of what we’ve accomplished together,” Lightfoot said after the vote on the final spending plan of her first term in office. Lightfoot will ask voters for another four years in the upcoming 2023 February municipal election.

By a 32-18 vote, the mayor’s spending plan passed after hours of criticism from council members – from progressive council members, to current and former allies of Lightfoot, to those who are running against her for mayor. Some of Lightfoot’s allies also stood to praise the budget, many of them noting a first-of-its-kind advance pension payment that will help keep the city’s retiree pension funds solvent.

Without a property tax increase, Lightfoot’s budget plan was largely meant to be non-controversial this election season, but her proposal garnered pushback on multiple fronts from aldermen who said Lightfoot ignored their budget ideas and failed to make good on campaign promises in the last budget of her term.

At a news conference after the vote, Lightfoot said she was pleased with the vote tally, despite receiving just six votes more than needed to pass her election-year budget.

“I don’t buy votes and I manage to 26, which is the majority. So anything over 26 to me is gravy,” Lightfoot said.

Aldermen criticized the mayor for not doing enough to replace retiring Chicago police officers, as well as a provision in the budget that allows her and other elected officials to take annual raises based on inflation. They criticized her administration for being slow to spend significant amounts of nearly $2 billion in COVID-19 relief funds that the city got last year. And member after member from the council’s Democratic Socialist Caucus stood up to criticize Lightfoot for her failure to make good on certain campaign promises, including to create a standalone Department of Environment, or reopen the city’s previously shuttered mental health clinics.

Still, the budget is now expected to go into effect in January. Here’s what else you need to know about what it does – and doesn’t – include.

Does the budget include a property tax increase?

No. While all three of Lightfoot’s previous budgets included a property tax hike, her election-year spending plan does not. Lightfoot initially predicted a 2.5% increase and told residents that would translate to a moderate bump — the cost of a four-person dinner at Al’s Beef, to be exact — for the average property owner. But Lightfoot changed course after public criticism from some council allies. The administration says better-expected-revenues, as well as rosy projections for next year, allowed them to forgo the tax hike.

How does this budget affect my wallet?

Besides not seeing a property tax hike, Chicagoans likely will not notice much of a difference in the city’s other taxes and fees in 2023 — a typical sign of an election-year budget where officials, who are preparing to face voters in February, aim to avoid any major price hikes. For instance, the cost of city vehicle stickers — at $95.42 a year for cars — will stay the same.

But there are some changes. Residents applying for a business license online will now have to pay a $25 fee, which will eventually be applied to the overall fee for the license. Also, the minimum fine for parking a car in a vacant lot will double, from $50 to $100.

Certain ticket prices are decreasing, though, as the city aims to align the costs of tickets with state law that caps certain violations at $250. A maximum fine for blocking a bike lane or obscuring a license plate will be slashed in half from $500. This was a topic of debate and controversy for some aldermen, like downtown Ald. Brendan Reilly, who said the fees are an important public safety tool. But Lightfoot administration officials told aldermen the city’s hands are tied, citing a recent court decision that said Chicago needs to fall in line with the state’s law. The city tried to appeal that decision, but the Illinois Supreme Court declined to take up the case, the law department told aldermen.

How much will the city spend on policing and violence prevention?

Lightfoot’s 2023 budget will increase police spending by 3.4% compared to last year — bringing the Police Department’s budget to a total of $1.94 billion. Despite the increase, and to the dismay of numerous aldermen, the department will only add 35 positions in the year to come. Money will go in part toward increasing the number of officers assigned to the Chicago Transit Authority, which has been the backdrop of several high-profile shootings in the past year. A report from the Chicago Tribune reveals that police spending may be actually much higher than what’s included in the annual budget, in part because the estimated figure historically does not accurately predict what the department will spend on overtime pay.

Overall, the city will spend $3.02 billion on efforts that fall under the category of public safety, including budgets for the Civilian Office of Police Accountability and the Police Board.

Lightfoot also plans to rely on COVID-19 relief funding to support community-based violence prevention programs. The city is slated to spend $61.5 million out of the $85 million in grant funding earmarked for violence prevention over the next three years.

The influx of the federal grant funding last year, which will carry over into 2023 and beyond, made Lightfoot’s budget favorable among progressive aldermen. But this budget season, her administration has been criticized this year for being slow to get those dollars out the door. In 2022, the city will spend just $8.2 million in the violence prevention category.

“In dealing with violence in my neighborhood … you go at violence with everything you got … we don’t have the luxury to wait and use this money glacially over the next five to 10 years. We have to use it now … it is inexcusable that we did not spend more of that money,” said North Side Ald. Harry Osterman, 48th Ward, who ultimately supported the budget. Osterman is one of Lightfoot’s hand-picked committee chairs, but is retiring after this term and was outspoken in his criticism of this budget.

What’s the status of the city’s underfunded pension system?

The city’s pensions remain severely underfunded, and mandated payments continue to grow year over year. In 2023, the city will spend $2.6 billion in contributions to its four pension funds — a more than 500% increase in payment contributions from a decade ago. That’s because after decades of politicians deferring politically unpopular moves like increasing property taxes, or other revenue generators like fines and fees to keep up with paying adequate pension payments, the city is now required by state law to fund its pensions by 90% by 2045.

This year’s whopping payment includes an “advanced” pension payment, too, of $242 million. The advanced payment policy, which the city plans to continue in years to come, will save the city $2 billion in the long run, according to the mayor’s administration. The plan received praise from major credit rating agencies. The payment will put cash in the hands of pension fund operators, potentially allowing them to hold onto assets they would otherwise have to sell off to keep paying the city’s retirees.

“We’re not going to get everything that we ask for… but this budget is a sound and solvent budget for the future of the city,” said mayoral ally and Finance Chairman, Ald. Scott Waguespack, 32nd Ward.

This year’s budget is also the first to reflect what many hope will be years to come of revenue from the city’s forthcoming casino. As part of the city’s deal with Bally’s Corporation, the future casino operator handed the city a lump, $40 million payment to be put toward its pension obligations. The casino still needs approval from the state gaming board, but is expected to open its permanent location in 2026, with a temporary site scheduled to open next year.

What does the budget not include?

Sidewalk shoveling

Some accessibility and transit advocates have been outspoken during the budget process about the need for the city to plow its own sidewalks. Currently, that responsibility falls on individual homeowners. Despite the push, and support from at least one alderman, a proposed pilot program did not make the cut.

Environmental department

Perhaps the most glaring absence in Lightfoot’s spending plan is a standalone Department of Environment. Lightfoot campaigned on the promise of reopening the department that her predecessor, Rahm Emanuel, disbanded in his 2012 budget proposal. Instead, she’s creating a 10-person climate office that will make policy recommendations, and commission a report by June 2023 on the feasibility of creating an entire department. The move has disappointed aldermen across the political spectrum — from progressive members to more conservative ones — and was a repeated complaint throughout the budget process.

“Our residents deserve more … it’s not enough, we’re not there yet,” said Ald. Maria Hadden, 49th Ward, before casting a “no” vote. “Representing a ward where we’ve gone through lakefront erosion … We had a tornado in Rogers Park, when does that happen? We had three women who died in their apartments during an early heat wave. We need a department that’s fully empowered and resourced to address these issues for our city.”

Modified real estate transfer tax to address homelessness

A group of homeless prevention advocates known as the Bring Chicago Home Coalition has for years been pitching an increase to the so-called real estate transfer tax, a tax levied when a property is sold in Chicago. They want to bump the tax by 1.9 percentage points on properties valued at more than $1 million. The group says that would result in a $163 million annual revenue stream for homeless prevention. Despite campaigning on the idea in 2019, Lightfoot no longer supports it. The mayor is, however, planning to spend $43 million in federal grant funding on homeless support services in 2023.

Funding for the Chicago Torture Justice Memorial

Elected officials have yet to allocate funding for the Chicago Torture Justice Memorial, seven years after the City Council passed an ordinance that said they would. The memorial would be a tribute to survivors of abuse at the hands of disgraced former police detective Jon Burge, who used mental and physical violence to coerce mostly Black men into “confessions” from the 1970s to 1990s. Instead, Lightfoot’s budget allocates funding for a planning phase of the memorial, to the dismay of advocates who’ve been waiting for years to break ground on it.

Mariah Woelfel covers Chicago government and politics for WBEZ. You can follow her at @MariahWoelfel.