Mayor Brandon Johnson's new budget plan has no property tax hike, proposes extending $40M in debt

Alice Yin and A.D. Quig, Chicago Tribune on Dec 15, 2024

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Mayor Brandon Johnson’s latest plan to try to get aldermen to pass his budget for 2025 contains no increase in property taxes thanks to a combination of cuts and a controversial idea to extend the deadline to pay back $40 million in debt, according to aldermen briefed on the proposal Sunday.

Three sources present at the meetings with Johnson’s budget team said his $68.5 million property tax hike for next year has been zeroed out entirely, the latest development in a remarkably fraught budget process that started with the first-term mayor breaking his signature campaign promise against raising that levy.

To make up for that gap, Johnson’s new proposal calls for finding $40 million from a move to “amortize line of credit in 2026,” according to a copy of Sunday’s briefing. That suggestion of a so-called scoop-and-toss maneuver will likely spark resistance from aldermen worried about what kicking the can down the road on its debt would do to the city’s fiscal standing.

The $40 million debt-amortizing solution was listed under “Expenditure Cuts” in the mayor’s presentation. So was $1 million in staff reductions at the mayor’s office, $2.8 million in “middle management cuts,” and $1.1 million in shifting costs from Business Affairs and Consumer Protection to a “cable TV origination fund.”

The rest to fill the $68.5 million hole comes from “operational efficiencies,” per the presentation: $10 million in a “cost recovery initiative,” $5 million in “energy and facility management efficiencies,” and $8.6 million in a “contract savings initiative.”

The first was was described by Johnson’s team as a proposal to recover costs of city departments through more aggressive enforcement of special event reimbursements and lowering overtime hours with “better coordination.”

The “cost recovery initiative” would help the city get paid back for the services they provide during special and athletic events and go after organizers who throw unpermitted events. Another goal is to lower overtime costs “through better coordination within the permitting process,” according to the briefing documents.

NASCAR, for example, began paying the city back for work by the Chicago Police and Fire Departments, as well as the department of transportation and Office of Emergency Management and Communication for this year’s race. It plans to make another payment for next year’s race too. Lollapalooza pays the city for such costs already.

The briefing suggests the city would have to pass a new ordinance to cover athletic events that impact traffic flow, large outdoor special events, and unpermitted events, which might be charged after the fact.

To assuage aldermen who might fret about the impact on smaller neighborhood events and parades, the ordinance would not make either pay up. Citywide festivals or “stadium and conference events” would not be affected either, according to the briefing documents.

Last week, Johnson made an eleventh-hour decision to cancel a Friday vote on his 2025 budget plan, the latest setback for the mayor after months of squabbling with aldermen and failing to shore up enough support in the City Council to finalize a $17.3 billion fiscal package that still had a property tax hike and minimal cuts. The next vote is scheduled for Monday afternoon.

The chaos comes as Johnson, who has portrayed himself as the city’s “collaborator-in-chief” in trying to forge a budget deal, faces an unprecedented government stalemate should he not secure enough votes by year’s end.

City Hall sources told the Tribune last week that mayoral aides and aldermen close to Johnson were floating an idea to nix the property tax increase entirely and instead reduce next year’s advance pension payment — a sign of how desperate his team was to wrap up this grueling budget cycle. His proposal on Sunday opted instead for the $40 million debt-amortizing idea and cuts.

Johnson first unveiled his original 2025 budget plan in late October with a staggering $300 million property tax increase — a major flip-flop from his campaign vow not to employ the often politically toxic revenue-raising tactic. That was repeatedly whittled down by resistant aldermen until the mayor’s team found itself nixing the increase entirely in its latest bid to get a majority of aldermen on board before the Dec. 31 deadline.

Now, Johnson hopes he’s found a winning iteration to finalize next year’s budget in this Sunday package, but only after already dealing himself political damage in spending the last few months trying to make the case that he had no choice but to break his campaign promise.

“Let’s make sure that people don’t lose their homes because they can’t afford it, because property taxes continue to be the only way in which this city can balance its budget,” Johnson said during one mayoral runoff debate in 2023. “Under my administration, we will not balance the budget off the backs of Black people and working people.”

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