If there were a responsible way to close our budget gap that didn’t involve raising taxes or requiring furloughs for employees, we already would have taken it.
I want to speak directly to Chicagoans about our city’s budget, which will come up for a vote before the full City Council today.
Long before I formally introduced this budget in October, it became clear that our economic path out of the COVID-19 pandemic would require us to make some extraordinarily difficult decisions. It was a matter of when, not if, these decisions would be made, and how we would make them — all while holding firm to our core values of equity, inclusion and transparency.
COVID-19 has not only upended all our lives from a health perspective, it also has devastated significant parts of our economy. This has resulted in an $800 million loss of revenues for the 2020 budget and a significant $1.2 billion deficit for next year, 65% of which is directly tied to COVID-19.
Dealing with a $1.2 billion gap means there were no easy decisions. None. And while the prospect of better times comes closer into view, particularly because of a new partner in the White House, along with the prospect of a nationwide COVID-19 response plan rooted in science and data, we must face the reality in front of us right now.
To put it bluntly, this is likely the most painful budget we have ever faced as a city. And it comes after the many difficult and painful choices we’ve already had to make over the last eight months. So, if there were a responsible way to close our budget gap that didn’t involve raising taxes or requiring some level of furloughs for our City employees, we would have already taken it. But among the many thing this pandemic has taken from us is our ability to make decisions without sacrificing something in return.
For example, look at our proposal to modestly increase property taxes by $94 million in 2021. This number did not materialize out of thin air. We spent months deliberating it until we were compelled by the sheer size of the 2021 budget deficit to use some last resort tools, in a last resort situation. The proposed tax means that for the average Chicago homeowner, an increased cost of $56 per year would go into effect in 2022, not next year.
Understanding that nobody likes property taxes, we have proposed to tie this tax to help shore up city pensions and tie any increase to the Consumer Price Index, which over the last five years has averaged about 1.8 percent per year. Rather than ignoring a fiscal problem until it becomes a crisis and implementing a historic property tax increase as happened in 2015 when an almost $600 million property tax was approved, we are proposing a much more modest, predictable and, in our view, fiscally responsible way to address city finances.
In response to solutions like these, we often hear alternate suggestions that are easier said than done. For instance, many are wondering why instead of tax increases and furloughs, why not drain our “Rainy Day” fund? My answer is that this pandemic is far from over. As I’ve said before, instead of a “rainy day,” this is a “rainy season,” and it would be deeply irresponsible for us to empty that fund while we face so much uncertainty ahead. We must leave more for later if needed, and if this pandemic has taught us anything, it’s that we must be prepared for an unpredictable future.
Some have also argued that we should make even deeper cuts in city services than the $500 million in savings and efficiencies reflected in this budget. Of course that is an option, if we cared little for supporting our most vulnerable residents like our seniors, those experiencing homelessness, job seekers, small businesses and our youth, or whether the city was able to deliver the core services that residents rely on. We could absolutely abandon these residents and others, as well as the values of equity and inclusion as luxuries for better economic times.
The fatal flaw of that strategy, is that leaving people high and dry is not cost free. We have and continue to pay a price for our neglect of people, and neighborhoods. That is why, even in these tough times, we continue to make investments in mental health ($20 million), returning residents and workforce development ($11 million), and affordable housing and homeless prevention ($65 million). These investments reflect our values and help people when help is needed most.
For all the challenges we face, COVID-19 has also become a once-in-a-lifetime opportunity to continue righting the wrongs that have barred our most vulnerable residents from reaching their God-given potential. I am also proud that thanks to the collaboration of our partners in labor, we were also able to avoid laying off hundreds of our city workers — further proving our ability to come together and find solutions despite these incredibly challenging circumstances.
So yes, putting it mildly, this budget is tough. And yes, we have made some tough decisions. But I am confident that we have made the right ones to ensure our city — and every single one of our residents — will bounce back stronger and more resilient than ever before.
Thank you for continuing to stand up for what makes Chicago great: our ability to come together in the most difficult times, and work toward a better future.
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