Mayor Brandon Johnson isn’t taking Lori Lightfoot’s word for it when she claims to have left the city in great financial shape, with an $85 million shortfall that’s among the lowest in recent Chicago history.
Johnson is doing his own fiscal forecast and holding a series of community roundtables next month before he releases that new document.
Newly appointed Budget Director Annette Guzman outlined the timetable Tuesday after the City Council’s Budget Committee unanimously approved her appointment.
To accommodate the Council’s large freshman class, Guzman is inviting rookies and veterans alike to “Budget 101,” a boot camp of sorts to help them “understand the complexity” of the city’s financial challenges and the budget process “from beginning to end.”
Johnson plans to release his revised budget forecast by Sept. 30 and deliver his first budget address on Oct. 11. The tentative schedule calls for a final Council vote by Nov. 15.
“We have moved up the part of the budget cycle that involves community engagement. In the same way that we strive to engage with alders throughout this process, we want to make sure that we’re also engaging the community during the process and not at the end of the process,” Guzman, the former Cook County budget director, told the Budget Committee.
“A series of budget community engagement roundtables will be occurring in July of this year with the mayor, with department heads ... so that we’re hearing from them as we’re developing the budget.”
Ald. Carlos Ramirez-Rosa (35th), the mayor’s Council floor leader, said it was “very unusual” for Lightfoot to release a midyear forecast “when we were barely in the first quarter of the year.”
“Now that the mayor has his own budget director and his own team in place, they’ve got to look at the books and come up with their own projections,” Ramirez-Rosa said.
Johnson’s decision to engage the community three months before the Oct. 11 unveiling of his first budget should not surprise anyone, Ramirez-Rosa said.
“In the past, many Chicagoans have felt iced out of the process. The moment a budget was released, there was a feeling that nothing was gonna change,” the floor leader said.
“If you are serious about incorporating the public’s input, you want to put that at the front end, rather than coming out with something that is fully baked, then saying, ‘Tell me what you think.’”
Lightfoot released her “midyear” budget forecast in mid-April in an apparent attempt to burnish her legacy as a strong steward of city finances.
The $85 million shortfall she proclaimed was a $390 million improvement from the yawning $473.8 million gap Lightfoot herself had anticipated in her own August 2022 forecast.
The lame-duck mayor claimed the “overperformance” of income taxes, personal replacement taxes and personal property lease taxes meant Chicago would close the books on 2022 with a $554 million surplus and end 2023 with a $142 million surplus.
After prepaying $242 million in future pension debt to avoid saddling Chicago taxpayers with compound interest, Lightfoot attempted to box in her successor.
She “assigned the 2022 surplus” to a newly created “Pension Advance Fund that would help to pay for advanced pension payments” through 2026 “above the statutory requirement to stabilize funded ratios of the four pension funds,” according to the forecast.
“This one-time money will help build a bridge toward the structural revenues expected from” a Chicago casino, which is expected to generate $245.8 million by 2028, the Lightfoot forecast stated.
Lightfoot’s historically low shortfall also assumed Johnson would not repeal the automatic escalator she pushed through the Council that ties annual property tax increases to the inflation rate.
But if Johnson keeps that escalator in place, he’ll break a pivotal campaign promise not to raise property taxes.
On her final workday in office, Lightfoot signed 10 executive orders. The most significant of those orders established the pension advance fund with $641.5 million in surplus funds.
Johnson almost certainly has other priorities for those surplus funds, having promised to make $1 billion worth of “investments in people” through an array of social programs that form the cornerstone of his anti-violence strategy.
Late last week, Johnson signed an executive order outlining the new budget process.
The next-to-last line stated: “This order shall supersede any inconsistent provision in any previous executive order.”
