Earlier this month, the city’s chief financial officer, Jennie Huang Bennett, testified before the city council’s special casino committee that she estimated the projected deficit for 2023 at $867 million. This sobering number was deployed to justify the urgency and seriousness of Mayor Lori Lightfoot’s attempt to rush the Bally Casino proposal through council.
Notably, it came just weeks after the mayor coyly teased a possible announcement of a 2022 surplus. Huang Bennett recently served up a new projected deficit for 2023. Magically, it was just 306 millions of dollars. How do you make sense of what seems absurd here? The Miracle of Budgeting in an Election Year!
This is not unique to the Lightfoot administration. Recall that Mayor Rahm Emanuel kicked off his final budget season of the election year by projecting a paltry $97 million deficit for fiscal year 2019. This allowed him to portray himself as a deficit hawk that had reduced the $635 million deficit it had inherited from the previous one. administration and deceive the claim that the city, after nearly two decades, was within reach of a structurally balanced budget.
A few weeks later, Emanuel shocked the city by announcing he would not run for a third term. By the end of the budget cycle, the estimated shortfall in Emanuel’s final budget had climbed back above $200 million. In August 2019, Lightfoot, just months in office, kicked off his first budget cycle by saying the actual deficit left by his predecessor was $838 million. No worries as his team spoke of a supposedly balanced budget based on broad claims for government savings through “improved budget management” and non-staff savings. It projected savings of $430.9 million and $289.7 million, respectively, in its first two budgets and an additional $298.2 million in the fiscal year 2022 budget, all without providing supporting documentation. .
If budgets reflect values, as is often said, perhaps the values of the mayors of Chicago are too often the values of the operators of a carnival sleight of hand.
We have been in an addictive practice for decades of adopting budgets that are structurally in deficit but which the mayor, with the consent of an obedient city council, trumpets as balanced. The massive influx of federal COVID-19 relief money was an opportunity to reset that bad habit, but like Chicago has done in the past, we squandered the crisis and Washington’s largesse.
With budget increases of 60% over the past two years, with no corresponding increase in ongoing revenue, and with COVID-19 funds wasted, there is likely a post-election fiscal nightmare looming. On the spending side, expect vacancies in the city to go unfilled — including the already understaffed and overworked police department. Also expect the myriad of overdone and partially implemented progressive programs passed this year to be short-lived, such as the so-called Guaranteed Basic Income program.
On the revenue side, one of Lightfoot’s first innovations puts our property taxes on an automatic inflation escalator so that they go up each year without the mayor having to submit annual property tax increases to the city council for debate and approval, escaping public scrutiny and criticism. With inflation at its highest level in 25 years raising the property tax cap, expect even larger property tax increases than in recent years.
In the meantime, we can count on the mayor to continue the longstanding tradition that preceded her of not rejecting separate property tax increases from her hand-picked school board. These practices have resulted in combined city and school property tax increases of $562 million over the past two years, despite $6 billion in combined COVID relief. Our pain is the politicians’ gain.
City council has long lacked the analytical information and resources needed to review budgets developed and dictated by mayors, evaluate programs, and assess the effectiveness of grants and subsidies. This need not be the case as the council has real power over tax and budget matters as the law requires that the annual budget be approved by the council. Nothing prevents it from strengthening its capacity for independent analysis. City Council must be assertive if we are to have the transparency, accountability and informed debate necessary for effective government and fiscal discipline.
In terms of budgeting, this can start with the creation of a truly empowered and independent municipal budget office. The council’s budget office should not be limited to just city services and programs, but should also include all sister agencies controlled by the mayor’s office, especially Chicago Public Schools, which consume 54% of property taxes. that city landlords pay for and has seen its budget grow by 21% over the past two years despite falling student enrollment.
The creation of a council budget office should be accompanied by a budget truth ordinance requiring public disclosure of the methodology and underlying data for the city’s budget projections. It should also specify a mandatory legislative budget process/timing. This is what the law establishes at the federal level where the powerful Congressional Budget Office independently assesses and scores all legislative proposals. This is how our fiscally healthier peer cities operate. The New York City Municipal Charter literally establishes a two-stage annual budget calendar with timed disclosures of information and data by the executive branch, a prescribed period for mandatory analysis and reporting from the council’s budget office. , before each of the two sets of legislative hearings.
With gas prices soaring and other household expenses on the rise, Chicago residents are being challenged to operate within their means. It is high time that the governing bodies and politicians of Chicago follow suit.
No more fuzzy calculations, no more blank checks. Chicagoans simply cannot afford the old ways.
Paul Vallas was Chicago City Budget Director and CEO of Chicago Public Schools.
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