Chicago faces a $127.9 million budget shortfall in 2023: Lightfoot | Chicago News

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Mayor Lori Lightfoot said Wednesday the city faces a projected budget shortfall of $127.9 million in fiscal year 2023.

The budget gap is the smallest since 2019, when the city’s budget gap was $97.9 million. Chief Financial Officer Jennie Huang Bennett said the estimated deficit for 2023 was “very small” compared to the size of the city’s overall budget.

It’s an indication that Chicago is “on a real path to financial recovery and financial stability” from the damage caused by the COVID-19 pandemic, Lightfoot said.

This year’s shortfall comes after city officials closed a $733 million budget gap in their 2022 spending plan, which Lightfoot called a “stimulus budget” after the economic collapse triggered by the continuation of the COVID-19 pandemic. The city’s 2023 budget will be its “stability budget,” Lightfoot said during a speech at the Chicago Cultural Center.

Lightfoot’s proposal includes a property tax hike of $42.7 million to offset the rising cost of inflation.

According to a measure included by Lightfoot in its 2021 budget, property taxes would have increased by $85.4 million, or 5%, due to the rapidly rising cost of living. Lightfoot said a 2.5% hike was enough.

“It’s the fairest thing to do,” Lightfoot told reporters that owners of a home worth $250,000 would pay an extra $34 a year to cover the increase related to the ‘inflation. “That’s about the price of Al’s Beef sandwiches — hot, dipped, and with extra cheese — for a family of four,” Lightfoot said.

In recent weeks, several city council members have called on Lightfoot to drop this planned increase to help Chicago homeowners cope with soaring prices for food, gas and other necessities.

Aldus. Pat Dowell (3rd Ward), the chairman of the city council’s budget committee, said the hike would be a “tough sell” in an election year.

“Council will certainly have a lot of questions about this,” said Dowell, who was the only member of city council to attend Lightfoot’s speech, which kicks off the months-long process that will culminate in the passage of the 2023 budget before the end. of the year.

Chicago’s financial situation has been buoyed by the city’s scorching real estate market and nearly $2 billion in federal aid designed to help the city weather the ravages of the pandemic. Chicago ended 2021 with a surplus of $318 million, according to the city’s annual financial report.

Chicago’s 2023 spending plan is the first to reflect casino revenue, with Bally’s cutting the city from a $40 million check after the city council gave its plan to build a casino and a resort in River North the go-ahead and a temporary casino set to open in Medina Temple next summer.

Additionally, city officials still have more than $152 million to spend under the federal COVID-19 relief package signed into law by President Joe Biden in March 2021.

However, the city’s finances will continue to be penalized by skyrocketing pension payments as the city complies with a state law that requires Chicago’s four funds to be 90% funded by 2045, ensuring that they can pay benefits to employees when they retire.

Chicago’s $16.7 billion budget for 2022 included nearly $2 billion in spending on affordable housing, mental health, violence prevention, youth employment programs and support for Homeless Chicagoans. These funds can be spent in 2022, 2023 and 2024, under federal law.

Much of the debate over the 2023 budget — which will take place simultaneously with the elections for mayor and 50 aldermen — will likely focus on whether these programs, funded by the Chicago bailout, will continue or be expanded. .

Lightfoot’s 2022 spending plan would not have passed without the support of progressive members of the city council.

The Chicago bailout calls on the city to borrow $660 million to fund its programs. That debt has yet to be incurred, Huang Bennett told reporters hours after Lightfoot’s speech.

It’s unclear how much of the plan’s funding will carry over into 2023 and beyond, budget director Susie Park told reporters.

Additionally, Huang Bennett could not tell reporters how much it will cost taxpayers to cover the next installment of the debt the city incurred to fund the city’s $1.4 billion infrastructure plan. In 2022, property taxes are increased by $25 million to cover the first payment.

The debate over the police budget — which stood at $1.72 billion in 2021 — will also be a flashpoint during the city’s budget negotiations. Progressive city council members are likely to push to reduce it to instead fund violence prevention efforts and strengthen the city’s social safety net.

At the same time, conservative members of the city council are likely to ask for more money to hire more officers and help those in office deal with police trauma.

In 2020, the city was facing a budget deficit of $838 million. In 2021, the city was facing a budget deficit of $1.2 billion.

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


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