At City Hall, the clock is ticking and anxiety is mounting as aldermen and Mayor Brandon Johnson work to pass a 2025 spending plan.
The mayor and City Council must agree on a budget by Dec. 31 or risk stark consequences such as credit downgrades or service shutdowns. But with that state-mandated deadline just one month away, a series of recent snafus and concessions have only made the budget-balancing act more difficult.
Chicago hasn’t entered December without an approved city budget since 2009, and this year not only is the city starting the month without an OK’d fiscal plan, but the mayor and aldermen are a chasm apart on key issues with aldermen finding few easy answers.
“Nobody agrees on anything,” Ald. Matt O’Shea, 19th, said.
Amid mounting pressure, Johnson has reversed himself several times this month, from halving the large property tax levy he proposed out of the gate with his overall $17.3 billion budget plan to undoing Police Department cuts. While the backtracks relieved opponents of those controversial proposals, the decisions only add to the growing gap between the funds City Hall wants to spend next year and what revenues it expects to receive.
Johnson has proposed closing next year’s $982 million gap by cutting roughly $250 million via “operational efficiencies” and about $43 million for unfilled city jobs. On the revenue side, he pitched taking in a record $132 million in revenues from special taxing districts, raising $21.4 million in smaller taxes and fees and bringing in $300 million by raising property taxes.
But now cutting the property tax hike in half leaves another at least $150 million hole to fill, which could grow bigger as many aldermen want to see the tax hike shrink even more. An unexpected tax change in Springfield and Johnson’s reversal on police cuts will add tens of millions more that city officials must patch up in very short order.
While the mayor’s office pitches fresh ways to balance the books, aldermen continue examining each city department budget for potential cuts, despite Johnson’s aversion to layoffs, furloughs or a reduction in services. The departmental budget hearings that precede any full City Council vote on a final citywide budget are expected to continue through Dec. 6.
But as aldermen search for smaller savings, negotiations over the most contentious chunks of Johnson’s plan continue.
The budget timeline was first shortened by Johnson’s decision to delay introducing his spending plan for weeks and again by stalled Budget Committee hearings. Thanksgiving week is usually greeted at City Hall with a budget deal already in the rearview mirror, but aldermen said they are bracing for the tricky dealmaking to stretch into at least mid-December.
The process of passing a budget can take many forms, said Ald. Matt Martin, 47th.
“One of the things that’s incredibly important, however, is not to wait until the eleventh hour,” Martin said. “Critically, that extra time that the mayor’s office built in before they shared their proposal did not come with more significant collaboration within government or with stakeholders. That was a real missed opportunity.”
Much of the debate remains focused on Johnson’s proposed $150 million property tax hike, lowered from the $300 million proposal aldermen swiftly struck down 50-0 earlier this month. Even the $150 million proposal isn’t being fully pushed by the mayor as Johnson’s internal lobbying team has probed sentiments toward an even smaller property tax hike aligned with inflation.
Ald. Maria Hadden, co-chair of the council’s Progressive Caucus, said “a bunch of different configurations” of the tax hike are being discussed.
“I don’t think anything is settled,” said Hadden, 49th. “There are several different things, it’s still in discussion, but there’s nothing final.”
Johnson would need to fill any further downsizing of his proposed property tax hike with deeper cuts or new revenue. He shared plans last week to counterbalance his $150 million trim largely by hiking taxes on leased cloud computing space and streaming services.
But that was before the gap that the mayor and City Council must plug widened further.
Last week, a change to legislation during the Illinois General Assembly’s veto session to a tax on prepaid cellphones caught Johnson’s administration off guard and blew an additional $40 million hole into the budget plan, several aldermen estimated.
On Monday, facing legal pressure from Illinois Attorney General Kwame Raoul, Johnson announced he would restore 162 vacant positions tied to enforcement of the Chicago Police Department’s federal consent decree. The mayor’s administration has ignored multiple inquiries about how much those roles will cost taxpayers, though some aldermen independently calculate the cost at roughly $12 million.
Martin said the administration should have been on top of the fallout from the proposed consent decree cut weeks ago, and that roles tasked with implementing police reform should have been off limits. After Johnson unveiled his budget in late October, Martin said he reached out three separate times to the mayor’s team to ask why the consent decree positions were slashed, but did not get a response until an announcement last week that the jobs will be restored.
“The proposed cuts were wholly inconsistent with a commitment to reform and to progress involving community safety,” Martin said. “They never should have been proposed.”
The budget could also be put in flux by aldermen’s long lists of requested cuts and additions.
O’Shea has led a charge to cancel a planned tax hike on wholesale liquor sales that Johnson’s team expected to net $10.6 million in revenue.
“A lot of people” oppose the tax hike, according to Ald. Jason Ervin, 28th, Johnson’s handpicked Budget Committee chair.
Ald. Daniel La Spata, 1st, is insisting around $1 million for a city-run sidewalk snowplowing pilot program be added. Similarly, a bloc of aldermen is demanding money for more ambulances and a new Southwest Side police district.
Several options in the buffet of budget-balancing ideas aldermen have proposed are drawing general support, such as a new tax on hemp products proposed by Ald. William Hall, 6th. Alternatives, such as a garbage collection fee hike, which has drawn sharp pushback from Black aldermen, have been greeted with split opinions.
One close progressive City Council ally of the mayor suggested Johnson halt a guaranteed income pilot program funded with federal COVID-19 stimulus money. City officials estimated cutting that program — combined with nixing a round of small business grants — would save $60 million.
Whether such budget balancers could resolve the gap piece by piece will likely be determined by how large a property tax hike aldermen are willing to accept.
But some in the City Council are stalwart in their belief the mayor is unreasonably rejecting what they see as a more straightforward solution: deep cuts to city spending. A group of 15 aldermen often at odds with Johnson called on Tuesday for the mayor to slash $568 million in spending increases that have outpaced inflation in 27 departments since 2020.
The majority of that sum is in a cut to the budget’s “finance general” pool, which includes more than $162 million for “scheduled wage adjustments” in part earmarked to pay for a new Chicago Fire Department union contract, which has not been finalized.
The day before, in an effort to amp up political pressure on Johnson, a near-identical group of aldermen released a poll they commissioned stating that voters have a deeply unfavorable view of the mayor and that if the government shut down because of a budget impasse, most respondents would blame Johnson and not the City Council.
Despite the uncertainty in public, Hadden said negotiations are “moving in the right direction.” Many aldermen are working to get a sense of how others in the City Council view different proposals in a “nose-to-the-grindstone” effort to find compromises, she said.
“It’s been frustrating at times, how budget season was kind of launched,” she added. “There are fits and starts of collaborative efforts that haven’t gone smoothly, but good things are still coming out of them.”
But Ald. Scott Waguespack, 32nd, said he has waited nearly a week to get a reply from the administration on budget issues, and responses have lacked specific numbers.
“I can’t give you definitive answers about anything, or even out to my constituents … because there hasn’t really been this ability by the administration to just be definitive,” said Waguespack, a frequent critic of the mayor. “That has made it extremely difficult to have trust in any numbers that they’re throwing out. The trust is just not there.”
Still, Ervin projected confidence in the budget process he is helping lead. Aldermen were taking “a little break” during the week of Thanksgiving, but plan to refocus in December and “figure this out,” he said.
“I think people have their ideas, people have their various siloes with their thoughts,” he said. “Ultimately, we will get together and make the sausage.”
Tribune reporter A.D. Quig contributed.
