It’s said that a budget is a moral document: The values that fill each cell of the budget spreadsheet represent the values of the author.
Mayor Brandon Johnson expressed a couple of core values when presenting his budget in mid-October. The city would create a permanent $100 million new community safety fund, Johnson said, and big corporations would pay for it.
“The top 3% of the absolute largest businesses in our city, those who have seen tremendous success and exceedingly high profits” would cover the costs, Johnson said. He would charge them a $21-per-employee fee for doing business in Chicago, projecting that to generate $100 million in new taxes each year.
After all, corporations can’t vote — except with their feet. Or by electing not to move to Chicago, because with a tax environment like that, why bother.
For Johnson, the combination of his community safety fund and a head tax to pay for it seemed a double winner of a budget plan. He got to play to the public’s demand for a safer city and trot out his “soak-the-ultra-rich” rallying cry too.
But here’s the catch: With this fund, Johnson isn’t putting big new money toward public safety programs; he just wants someone other than voting taxpayers to foot the bill.
Of that $100 million from head-tax revenue, $72 million would go toward programs the city’s corporate fund covered last year. Much of the remainder would go toward replacing discontinued federal pandemic relief funds dollar for dollar — without adding more.
The city’s first deputy budget director, Jonathan Ernst, showed me data that indicates planned spending on a program directed primarily to youth summer jobs would jump nearly 15 percent, to $49 million. But that does not account for 2025 federal pandemic relief funds that Johnson’s budget doesn’t replace, meaning the city’s total spend on the youth programs at best will be flat year over year, according to a former deputy budget director I talked to.
The demand for new spending on community violence intervention programs, among the most effective violence-prevention tactics available, initially prompted Johnson to earmark $18.6 million from the new community safety fund for such measures. But in an effort to lure budget votes from reluctant aldermen, Johnson diverted those funds into a new business-development grant program — over which aldermen likely would exert influence.
That switch drew pushback, so Johnson now is adding $18 million into the budget — paid for from the corporate fund this time, not the head tax.
That change, not previously reported, could come as welcome news for advocates of community violence intervention programs. After all, the corporate fund has a more certain future than Johnson’s head tax, a polarizing proposal the council’s Finance Committee defeated in a late November vote.
Johnson also initially planned to spend only $3.5 million from the safety fund to combat gender-based violence. After that drew sharp criticism, he allocated $9 million more — again, from the corporate fund, not his new community safety kitty.
Not long ago, Chicago mayors’ proposed budgets sailed through the council with virtually no dissent. Johnson gets, and deserves, no such rubber stamp. The impasse last year lasted through mid-December. This week, 26 aldermen — a majority of the 50-member City Council — signed a letter proposing an alternative budget.
Once again under Johnson, the city is bearing down on a legally mandated Dec. 31 deadline for a balanced budget, after which city government must halt operations until a new balanced budget is in place.
To their credit, the aldermen backing the competing budget proposal are showing the stomach to stake out some politically treacherous stances. Unlike Johnson, they won’t borrow to finance $166 million in back pay to Chicago firefighters, for example, and they insist on making the full $260 million pension payment needed to keep the city’s obscenely underfunded pension plans on a path toward fiscal stability.
OK, so now the two sides have squared off. And paradoxically, the pressure on both can set the stage for getting their best budget work done. To achieve that, a few standard negotiating tactics might help, starting with a move to break the process into manageable parts.
First, take the nonnegotiables — from both sides — off the table. Agree, just for now, that there will be no property tax increase, no head tax and no grocery tax, for good measure. And, by God, agree not to touch the city’s supplemental pension payment: Suspending that would be a false savings and immediately torpedo Chicago’s already fragile credit rating.
Next, put a few other issues, including the delayed firefighter payment, into a parking lot, agreeing to visit them, if needed, after other more manageable issues are settled.
With this agreed, stop talking about revenue altogether and focus instead on efficiencies, which haven’t gotten nearly enough attention. The city consulting firm EY, formerly Ernst & Young, presented dozens of good ideas — heavy on cost cuts — in its report earlier this year.
Johnson claims $80 million in savings from the EY report already is in his budget, though he has never shared details. Now is the time to go bigger with EY’s ideas.
The city could save around $200 million from reasonable changes to health benefits; consolidation of the city’s balkanized procurement systems; fleet management; and more. Touchier issues, such as saving over $50 million from a hiring freeze and $40 million from closing vacant positions, consolidating divisions and sharing labor pools, could come next.
Even bigger savings — billions over time — could come from restructuring the Police Department and Fire Department that, if done right, could save money and make the city safer too.
Even all these measures won’t entirely close the budget gap, but that’s when the parking lot and, ultimately, the “nonstarters” could come into play. In that final category, slimmed-down versions of the tactics might be worth considering. Implement the city law for property tax hikes tied to inflation, perhaps. Or consider a grocery tax, but mitigate the regressive impact by offering tax rebates for people who shop in economically challenged neighborhoods.
Instead of a head tax, consider ways to leverage the value of corporations to the city: lending personnel for finite time periods, for example.
Put the Civic Consulting Alliance to work on developing such plans and retain pro bono legal counsel to make certain any measures survive challenges in the courts.
City budgets are in fact moral documents. There’s a path by which all parties to this budget struggle can maintain their principled positions, back off their rhetorical posturing, make the city’s finances healthier and streets safer — and keep the city open for business to boot.
David Greising is president of the Better Government Association.