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Lightfoot May Need Those Aldermen After All

If the Mayor expects the Council to go along with an unpopular tax hike, she may have to drop her plans to cut their ward responsibilities.

Lightfoot delivers her State of the City address at Harold Washington Library on August 29, 2019.   Photo: Terrence Antonio James/Chicago Tribune

Mike Tyson once said about boxing, “Everyone has a plan until they get punched in the mouth.”

Lori Lightfoot ran for mayor of Chicago as a good-government reformer, promising to strip aldermen of the powers she believes are the source of the city’s corruption. But when she took office this spring, she got punched in the mouth with the legacy left by her predecessor, Rahm Emanuel: a $1 billion budget deficit. Now, her biggest task is to make Chicago solvent, and she’s going to need the help of those aldermen she’s so far taken to task.

“We walked into a staggeringly large deficit, and what was worse, we were not left with any credible plan to fix this massive problem,” Lightfoot said during Thursday’s State of the City speech, marking her first 100 days in office.

According to Moody’s Investors Services, Chicago has a $41.7 billion net pension liability, the largest of any American city. Pensions account for a third of the city’s budget deficit, but Lightfoot isn’t entertaining calls from think tanks like the Civic Federation or conservative Illinois Policy Institute to amend the state’s constitution to reduce those payments. Instead, she wants to find new ways to pay pensioners the money they’ve been promised.

“I don’t see the provision of city workers and pensions as our problem,” she said. “The key problem is our failure to fix the pension crisis.”

Some of Lightfoot’s ideas:

  • A graduated real estate transfer tax, with higher rates on home sales over $500,000
  • A congestion tax, or fee for driving downtown
  • A casino, which would be “a dedicated revenue stream to pay for our pension costs” and “stop the flow of $200 million in gaming revenue to Indiana.”
  • A fair cannabis industry that creates “business and job opportunities for black and brown people who have been the victims of the War on Drugs”

Lightfoot beat out 13 opponents for what may turn out to be a dud of a mayoral term. The last two mayors, Emanuel and Richard M. Daley, didn’t just leave her with a huge budget deficit, they reduced her options for closing it with their own misguided money-raising schemes.

When Daley sold the parking meter concession, he was so eager for a quick fix of cash that he allowed investors to fleece the city out of billions in future revenue. Now, there’s no way Chicagoans are going to stand for another sale of public assets.

Emanuel went the route of instituting ticky-tacky fines for speeding and running red lights. But Lightfoot rejects such fees as regressive burdens on working-class families.

Lightfoot’s administration has reduced the deficit to $838 million, but more demands on the public purse are coming. In 2021, there’s a $200 million increase in the public safety budget, and in 2023, another $400 million for pensions.

The mayor really, really seems to believe a casino is going to bail her out of this mess. But funding a city on vice isn’t just shoddy public policy — it won’t work. Detroit’s bankruptcy came less than 15 years after the first of the city’s three casinos opened; Gary, despite the Majestic Star, recently borrowed $8 million to stay solvent. As Ralph Martire of the Center on Tax and Budget Accountability told the Sun-Times last year, “The only responsible way to pay for [the pension] obligation is through well-designed tax policy and sound debt management.”

If Lightfoot doesn’t get her casino, she threatened “painful choices on finding other revenue sources.” That, of course, means higher property taxes.

Chicagoans currently pay the lowest property taxes in Cook County, at 6.786 percent. But that doesn’t mean people want to pay more, and it certainly doesn’t mean the City Council wants to vote for higher taxes. If Lightfoot expects the aldermen to go along with such an unpopular measure, she’s going to have to drop her plans to roll back their ward responsibilities, such as control over zoning and permits, which she wants to hand over to City Hall bureaucrats. When ugly buildings go up in a ward or street festivals get out of hand, aldermen get blamed. They’ll only tolerate so many hits to their public images.

Lightfoot ran and won on a promise to end the Chicago Way — a goal worth pursuing. As she said in her speech, “If you don’t have a government that you trust, one that has legitimacy, we cannot move forward together, making the tough but necessary decisions that will transform our future.”

But government’s most basic function is getting money and spending it. And right now, Lightfoot’s most important task is getting more money, and spending less of it.

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