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Mayor Brandon Johnson’s first Chicago budget passes

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Mayor Brandon Johnson’s $16.77 billion budget got the final stamp of approval from the Chicago City Council on Wednesday, in a relatively easy vote that followed a wide-ranging debate on the trajectory of the city and the progressive mayor’s budding agenda.

Aldermen voted 41-8 in favor of Johnson’s 2024 spending plan, which he framed as a gradual introduction to the bold, leftist promises from his mayoral campaign while holding the line on property taxes and slightly increasing police spending.

In the discussion ahead of the vote, supporters heralded the package as the beginning of a new Chicago that will take care of its forgotten constituents and implement alternative approaches to fighting crime and poverty. Dissenters, however, dinged his one-time strategies for plugging in a $538 million deficit as unsustainable and questioned the utility of his new investments, underscoring the widening divide between Johnson’s progressive bloc of aldermen and their moderate and conservative colleagues.

As was the case from the past several months of City Council meetings, aldermen also rang the alarm on the long-term prognosis for the 21,200-plus migrants who have arrived in Chicago over the past 14 months. The budget only funnels $150 million toward the asylum-seekers who mostly hail from Latin America — despite previous estimates that total costs from August 2022 to the end of this year could exceed $360 million.

Johnson has said the lower-than-expected allocation for 2024 reflects the ongoing urgency for the state and federal governments to step up to the plate, which critics warned could be a dangerous game of chicken.

A separate vote on the city’s $1.77 billion 2024 property tax levy also passed, 40-9, reflecting Johnson’s campaign pledge to not raise base property taxes.

Johnson ally Ald. Jessie Fuentes, 26th, applauded his budget as one that “can make our people whole” and scoffed at naysayers who worried it doesn’t do enough to address long-term issues such as the migrant crisis.

”You see, one budget is not going to solve all those problems. But it is a step in the right direction,” Fuentes said on the council floor, after outlining entrenched issues such as homelessness and keeping Chicago’s youth safe.

“But I don’t expect that any of us are going to sit back and hope and pray,” Fuentes added. “The mayor and his administration, they’re going to get to work, and I hope that every member of the 50-person council will do the same.”

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Another progressive, Ald. Daniel La Spata, 1st, also nodded to the long wait for initiatives that at one point seemed like progressive pipe dreams, such as bringing back the Department of Environment: “That’s what this budget is, it’s the promise of a lot of deferred dreams and a lot of deferred justice.”

Ald. Anthony Beale, 9th — one of the council’s most consistent mayoral critics — countered that his colleagues are fooling themselves if they believe the $150 million migrant allocation in the budget won’t run out, forcing the body to reconvene midway through 2024 to earmark another huge chunk of city money to deal with the crisis.

A vocal opponent of Chicago’s ongoing assistance to the asylum-seekers, Beale said he could not vote for a budget that doesn’t spell out that possibility, especially given recent lukewarm responses from Springfield and Washington, D.C., on additional migrant aid to Chicago.

”There are three reasons I’m not supporting this budget,” Beale said. “Number one, the budget is not balanced. Number two, the budget is not balanced. Number three, the budget is not balanced.”

The budget provisions sure to be championed the most by the left include reinstituting a city Department of the Environment, doubling staffing for non-police 911 response teams, adding two mental health clinic “pilots” within existing public health buildings and funding thousands of additional youth jobs. And on pensions, Johnson will continue making advance payments toward the city’s long-troubled retirement funds.

Left on the to-do list — or perhaps on the future chopping block — is the vast majority of Johnson’s economic agenda that he laid out during his campaign and entailed $800 million in new “tax-the-rich” levies, including reviving the corporate head tax, instituting a charge on securities trades and increasing the hotel tax.

The mayor has remained mum on those promises, instead punting the question to a new Finance subcommittee he created to explore new revenue sources.

The mayor’s budget team in September outlined a $538 million deficit next year, due partly to Johnson undoing his predecessor Mayor Lori Lightfoot’s controversial decision to tie the property tax levy to inflation, the financial impact of the influx of migrants and other rising costs.

Closing the gap meant Johnson took a record $433.8 million from tax increment financing funds, $39 million more than last year. Pulling money from the TIF districts — where property taxes otherwise accrue to fund projects inside the boundaries or nearby — is a tactic previous mayors have used that has been controversial because it is a one-time fix.

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The budget also counts on $90 million in savings from bond refinancing, which city officials have insisted will not be a return to the city’s problematic “scoop and toss” practices: paying off old bonds with proceeds from new ones. Rather, those savings will come from a refunding transaction that combines general obligation and sales tax securitization bonds, Chief Financial Officer Jill Jaworski said last month. The structure of that refinancing hasn’t been decided yet.

Another $112.6 million of the budget gap will be filled using operational efficiencies, while $186.8 million extra will come from higher-than-expected revenue, mostly from local taxes. And $35 million more will come from revenue enforcement collections.

The $16.77 billion budget recommendation is roughly 2% increase from Lightfoot’s election-year spending plan for 2023. Administration officials said the city’s overall head count would rise by about 1% over this year’s level.

Johnson’s budget will chip away at one of his key campaign promises, Treatment Not Trauma, that calls for establishing a non-police response to certain 911 calls along with reopening the six mental health clinics shuttered under former Mayor Rahm Emanuel.

The spending plan allocates money to add two temporary mental health clinics in existing public health department offices as permanent locations are being scouted. Chicago will also make permanent the alternate response teams within the Crisis Assistance Response and Engagement — or CARE — pilot started under Lightfoot, doubling the staff in the 2024 budget.

The city will fund 4,000 more youth jobs during its summer employment program, with a target of hiring more than 28,000 teens and young adults next year. Homelessness service investments also will increase to $250 million, while anti-violence programming will top $100 million.

Another long-sought progressive goal — bringing back the Department of Environment that Emanuel shut down — is part of next year’s plan, with a $1.8 million budget. The subject was a sore spot between activists and Lightfoot, who reneged on a pledge to bring back to department and instead created a smaller-scale office. Johnson’s budget tripled that of Lightfoot’s former office to add four employees, but it will not start out with regulatory or enforcement powers.

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Johnson will also create a $5 million office of reentry, under the mayor’s office, to support formerly incarcerated Chicagoans. The creation was an early demand of Johnson’s vice mayor, Ald. Walter Burnett, 27th, who worried that adding 13 new positions to address the new migrant population will come at the expense of helping individuals access jobs and resources after returning from prison or jail.

Meanwhile, spending for Chicago police, the city’s largest department, will reach nearly $2 billion due to a $91 million increase next year. Its head count is untouched from this year, but positions for detectives will be boosted by 100, a nod to a key campaign promise of Johnson’s.

Other police department shifts will serve to civilianize 400 sworn positions, which the mayor’s team said will free more cops from desk work, and boost the number of field training officers. The department has recently struggled to fill openings, however, with 1,440 sworn vacancies as of this week.

Police costs are guaranteed to rise in the coming years, as the city and the union representing rank-and-file police officers reached a tentative agreement on a new four-year contract that would provide a roughly 20% raise over its term and a one-time $2,500 retention bonus for active duty officers in the Fraternal Order of Police. That must still be approved by the City Council.

Another hefty cost for future years: a pension fix to bring benefits for retired CPD employees in line with recently boosted firefighter benefits. The change removes a birth date restriction that limited annual cost of living adjustments for pension benefits. It’s estimated the change will cost roughly $60 million for Johnson’s next budget in 2025.

Johnson’s plan also undoes Lightfoot’s policy of tying the annual property tax levy to inflation. Removing that increase contributed to the yawning deficit projection. But he will continue her tradition of making extra payments to help the city’s four beleaguered pension funds stay financially afloat.

The extra pension payment will total $307 million, bringing the total pension payment in 2024 to $2.7 billion. The mayor has pledged to keep making additional contributions on top of the amount required by law until 2026.



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