Mayor Proposes Tax Hikes, Layoffs To Fill $1.2 Billion Budget Gap

CHICAGO — Mayor Lori Lightfoot's proposed pandemic budget calls for hitting Chicago property owners with a $94 million property tax hike and boosting gasoline taxes by 60 percent — from 5 to 8 cents per gallon — to help fill a historic $1.2 billion funding gap.

The property tax hike would cost owners of a home worth $250,000 about $56 a year, the mayor said.

On Wednesday, Lightfoot's announced her budget proposal calls for a total of $185 million in tax increases, city worker layoffs in 2021, and mandatory unpaid furloughs for all city workers, herself included.

The mayor said the proposed layoffs, which would go into effect in March, could be rolled back with "appropriate pivots" if federal legislators produce a COVID-19 aide package to help cities suffering financially due to the virus.

About 65-percent of Chicago's budget short fall is due to coronavirus related losses, including drastic declines in hotel, amusement, parking, ground transportation, gasoline and sales taxes.

Lightfoot deviated from her prepared remarks to address federal lawmakers.

“This economic downturn has had a bipartisan impact and there must be a bi-partisan solution. So, Congress, do your job. Don’t leave us — cities and town all across this country high and dry,” she said. "Do your job that we sent you there to do."

Lightfoot called on federal lawmakers to help Chicago and other big cities with their coronavirus pandemic-fueled budget woes. If the city gets enough federal aid, Lightfoot said, the city will make “any appropriate pivots” against job cuts.

“Congress, do your job," Lightfoot said. “Don’t leave us, cities and town all across this country high and dry.”

Much of the budget deficit will be filled by $263 million in “improved fiscal management," which includes eliminating 1,800 vacant positions, and refinancing bonds that projections say would save the city $448 million this year and $501 million in 2021.

"We have made choices on additional revenue that aid our recovery, not hinder it. We have worked very hard to be smart, prudent and strategic and make choices that spur growth and build wealth. We have avoided grabbing for any revenue source without regard to the consequences for economic recovery," Lightfoot said during her budget address Wednesday.

Under the mayor's budget plan, the city would tap $76 million in Tax Increment Finance surplus cash to add $33.5 million of revenue, and another $30 million from the city's "rainy day fund."

The spending plan includes a $5.3 million line-item for violence reduction efforts, $2 million earmarked for affordable housing and $8 million aimed at bolstering an economic rebound with training programs and funding for small businesses in hopes of creating jobs.

The City Council is set to have budget hearings this month before considering Lightfoot's proposal.