Lightfoot unveils 2022 budget, says her goal is ‘a safer, strong and more prosperous city’

Mayor Lori Lightfoot delivers the city’s 2022 budget proposal during a Chicago City Council meeting at City Hall Monday morning. | Ashlee Rezin/Sun-Times

Mayor Lori Lightfoot on Monday seized what she called a “once in a lifetime opportunity to transform” Chicago.

The mayor proposed a $16.7 billion 2022 budget that raises Chicago’s property tax levy by $76.5 million, but uses one-time revenues, debt refinancing and a $1.9 billion avalanche of federal relief funds to play Santa Clause by making scores of strategic investments.

In her budget address to the City Council, an impassioned Lightfoot talked about the “hardship, pain and even death” that Chicagoans have endured over the last 18 months.

It was “ushered in by the insidious reach of a global pandemic, first of its kind in 100 years, which brought with it a pandemic-sized economic meltdown, civic unrest and unacceptable levels of violence,” the mayor said.

“But we must be honest and recognize that the fault lines revealed during the pandemic were actually decades in the making, borne of persistent, intentional acts dating back to our earliest days as a union and compounded and refined over time. Life expectancy gaps of 15 years or more between Black and white people did not happen by chance.”

Lightfoot said nothing short of “big, bold audacious steps” are needed to address the systemic racism that triggered the wealth, jobs and life expectancy gap between Blacks and whites. She also talked about “rampant, unchecked opioid and heroin use” that leaves some parts of the city “looking like a scene from the Walking Dead.”

“We must commit ourselves to being intentional, but in a very different way than in our past,” the mayor said.

“As leaders, we must commit to a new set of truths, starting with the truth that equity and inclusion must be at the center of all of our work and that, in our post-pandemic recovery, no one — not anyone — can be left behind.”

She added: “Our ultimate goal with this Recovery and Resiliency Budget is to recover and develop Chicago into a safer, strong and more prosperous city in which people can take root, raise a family, build a business and make a better life for themselves.”

For the second straight year, Lightfoot’s budget is balanced with one-time revenues.

It includes $131.4 million in savings from “improved fiscal management”; $25 million by “sweeping aging accounts”; $21.6 million in health care savings; $46.2 million in lower-than-expected costs from the new eight-year police contract and $62.6 million from “improved revenue projections.”

It also calls for the city to refinance $1.2 billion in debt and use $232 million of the $254 million savings to bankroll four years of back pay for Chicago Police officers. The remaining $22 million will help close the $733 million budget gap.

WATCH LIVE: Mayor Lightfoot delivers the 2022 Budget Address in City Council Chambers. #ChiBudget22 https://t.co/GOooNVjF0M https://t.co/qJC8tpam3e

— Mayor Lori E. Lightfoot (@chicagosmayor) September 20, 2021

Once again, the mayor’s plan to eliminate her own budget shortfall includes off-loading costs to Chicago Public Schools.

This time, CPS will be asked to cover $75 million in pension costs for school administrators who draw their retirement checks from the Municipal Employees Pension Fund.

But the budget also declares a $271.6 million tax-increment-financing surplus, with $150.2 million of that money going to CPS and $67.6 million earmarked for the city’s corporate fund.

Separate and apart from the $1.2 billion debt refinancing is the financial shell game Lightfoot has devised to get around the U.S. Treasury Department’s ban on using federal COVID-19 relief funds to retire debt.

The mayor originally intended to use more than half of the $1.9 billion in federal relief funds headed to Chicago to retire $465 million in scoop-and-toss borrowing and cancel plans to borrow $500 million more.

But when the Treasury Department guideline nixed that idea, the mayor’s financial team devised an end-run.

Instead, the mayor plans to use $782 million in relief funds to replace revenues lost to the pandemic in 2020 and 2021 and set aside $152.4 million in stimulus funds for revenue replacement in 2023. Another $385 million in federal COVID-19 relief funds will be used to bankroll “essential existing and new programs” next year.

Mayor Lori Lightfoot delivers the city’s 2022 budget proposal during a Chicago City Council meeting at City Hall Monday morning.

The infusion of federal cash will free up corporate fund revenues to retire the refinanced debt, often called “scoop-and-toss” because it scoops up existing debt and by stretching out the payments, then tosses that obligation further into the future.

Chicago’s property tax levy will rise by $76.5 million—to $1. 71 billion. All but $300 million of that money will support four city employee pension funds.

That includes $22.9 million for the automatic escalator tied to the consumer price index; $25 million to bankroll the 2022 installment of Lightfoot’s $3.7 billion capital plan and $28.6 million captured from “new property.”

Downtown Ald. Brian Hopkins (2nd) said he has no problem with the “new property” portion of the levy increase. He’s also willing to swallow the $25 million property tax increase for the capital plan on grounds there is “very little argument about the need for new roads, bridges, sidewalks and viaducts.”

But, at a time when beleaguered Chicago property owners are already reeling from skyrocketing reassessments, Hopkins said the automatic escalator needs to be repealed.

“People are just so fed up with skyrocketing property tax bills. There’s a psychological impact to that where it’s one of the decisions people claim motivates them to leave Chicago. We really heard a lot of pushback last year when the automatic increase provision was adopted. People don’t like it. We need to seek alternatives,” Hopkins said.

Mayor Lori Lightfoot receives a standing ovation after delivering the city’s 2022 budget proposal during a Chicago City Council meeting at City Hall on Monday.

Last year, Lightfoot balanced her budget, in part, be eliminating 614 police vacancies and shrinking the Chicago Police Department by attrition. This year, she’s proposing a $189 million increase in CPD spending—to just under $1.9 billion—in part by expanding the Officer Wellness program to reduce stress levels that lead to police suicides and a tidal wave of police retirements.

That’s certain to be a point of contention with aldermen who want to shrink the police budget.

“We’d be better served with that funding going towards more of the mental health and homeless prevention,” said Socialist Ald. Andre Vasquez (40th).

Ald. Anthony Napolitano (41st), whose Far Northwest Side ward is home to scores of Chicago Police officers, demanded that Lightfoot restore some of the 614 police vacancies—even if it means finding a giant venue to run double classes of police recruits.

“That’s what we’re lacking. That’s where we’re hurting the most. We need more officers out there....You have to have some sort of show of force on the streets to combat crime,” Napolitano said.

“It’s not even a question. It has to be done. Wait `til you see the retirements in the next couple of months and the next year. It’s gonna make peoples’ heads spin.”

Lightfoot moved up her 2022 budget address by a month to coincide with the unveiling of her plan to spend the $1.9 billion avalanche of federal relief on its way to Chicago.

That’s where much of the action will be during this year’s budget hearings, as aldermen continue to push back against Lightfoot’s plan to use a financial shell game of sorts to get around the Treasury Department’s ban on using federal COVID-19 relied funds to retire debt.

The grand total of new investments is $1.2 billion. That includes $567.6 million in federal relief and $660 million from the Lightfoot’s 2022 capital bond issue.

The list includes: $202 million to reduce homelessness; $52 million in new investments for mental health initiatives; $150 million for youth programming and $85 million for violence interventions.

To combat global warming, the mayor’s budget calls for planting 75,000 new trees. To reduce poverty, she proposes launching a year-long guaranteed minimum income pilot championed by her former floor leader and current Hispanic Caucus Chairman Gilbert Villegas (31st) that will send $500 in monthly checks, no strings attached, to 5,000 of Chicago’s neediest families. Lightfoot billed it as the largest such cash assistance program of its kind in the nation.

“Imitation is the greatest form of flattery,” Villegas said.

Noting that he introduced a similar ordinance six months ago, Villegas said, “We could have been four or five months into a pilot program really helping people. Although I appreciate her putting this in the budget, I’m questioning why it took so long to do this. Especially when the Black Caucus wanted reparations to go first.”

The budget also includes several new or enhanced programs to relieve the burden on low-income Chicagoans driven into debt and bankruptcy by the city’s over-reliance on ticket revenues.

That includes so-called “fix-it tickets” for certain compliance violations like an invalid or missing city sticker and a 50% reduction in tickets for low-income drivers. And there’s a $20 million Artist Relief and Works Fund that includes $10 million in stimulus funds and a matching $10 million “dedicated revenue stream” from the corporate budget that will “no longer be subject to the vagaries of the hotel tax.”

At one point during her hour-long budget address, Lightfoot invoked biblical references. She talked about how Moses gathered the Israelites together before they reached the Promised Land after a “40-year, grueling set of trials.”

“Their struggles seem, not unlike what we have endured over the last eighteen months—hunger, plagues and death,” Lightfoot said.

Just as Moses told his people they were “doomed to repeat” the harrowing test they had just endured until a new, more united generation emerged, so must Chicago unite behind a new, more equitable future, the mayor said.

“We have no Moses, but we do have each other and we have the lessons of history from those Biblical times to the present,” the mayor said.

“Our people need us and, importantly, we have an obligation to them, to ourselves and to future generations to seize with gusto the opportunities this moment presents. To learn the lessons of history and not repeat the mistakes of the past.”