For years, city and state officials have marched Chicago toward a cliff. This budget season will determine if they have the will to finally pull back from the abyss.
Leaders of three prominent Chicago civic organizations recently outlined principles in the Tribune that they hope will guide those officials as they tackle billions in budget deficits at the city, public schools and the CTA. Although sound, their admonitions seem almost quaint, reflecting a bygone era when elected officials exercised a modicum of responsibility for their constituents’ futures.
Some history, juxtaposed with paraphrasing of the civic leaders’ recommendations, is illustrative:
Don’t address long-term structural budget deficits with one-time revenues, kicking the can down the road and making the fiscal situation worse.
For decades, city mayors have used one-time revenues to present the illusion of balanced budgets. Both Mayor Richard M. Daley and his successor Rahm Emanuel used “scoop and toss,” refinancing bonds with new 30-year debt and spending it to close annual deficits. A Tribune investigation called this practice, along with Daley’s use of bonds to cover legal settlements, back pay and sundry expenses, “equivalent to taking out a 30-year mortgage to buy a car and making your children — or grandchildren — pay it off, with interest.”
Mayors Lori Lightfoot and Brandon Johnson used one-time COVID-19 relief dollars, among other short-term revenues, to balance budgets. Stealthy deficit spending has been the choice of mayors and city councils since at least the late 1990s.
After decades of economic growth under Daley and Emanuel, financed in part by tax increment financing districts, Lightfoot and Johnson have raided these funds to balance budgets, shrinking job creation and future revenues. Further dampening growth, Lightfoot instituted automatic annual property tax increases and raised the gas tax. Johnson pushed through new taxes falling largely on businesses, making the city less competitive. He is seeking a new tax on each private sector job in the city.
Too late! With Johnson’s passive acquiescence, Gov. JB Pritzker imposed new pension sweeteners on the city Aug. 1, adding $60 million to 2027’s pension tab and a whopping $750 million a year by 2055. It increases pension debt in the police and firefighters’ funds by $11 billion, reducing funding levels to pay retirees from 25% to 18%, the worst ratio in the nation. As Yogi Berra would say, the governor’s action was deja vu all over again. Pritzker signed similar pension sweeteners in 2021 and 2023, contributing to Chicago budget deficits. In contrast to Johnson, Lightfoot fought hard to block the unfunded mandate, but Pritzker and legislators beholden to powerful government unions ignored her.
Maximize cost efficiencies and improve services using good management and technology. Particularly consider how budgets affect sister agencies such as the CTA and public schools.
Johnson receives ideas for government cost efficiencies in the same way a vampire reacts to a gift of garlic. His only answer to budget challenges is a supplicating plea for more money from Chicago and Illinois taxpayers.
Unlike the crushing pension debts imposed on Chicago by Springfield, this civic recommendation is within the control of local leaders. The CTA, for example, can match its bus and rail service to actual rider demand rather than running pre-pandemic schedules, pretending that despite the rise of remote work, 2019 ridership will return any minute.
Chicago Public Schools, hemorrhaging students for years, can right-size its system by closing near-empty schools, giving students better opportunities and sending more dollars to classrooms. When combined with strategic neighborhood investments, guided by community leaders, these changes can both improve educational outcomes and help spur local renewal.
Improving services also means putting customer needs first. The Chicago Park District, for example, should reconsider its obtuse plan to close 57 swimming pools by mid-August, the peak of the heat season amid a near-record heat wave.
Chicago’s civic leaders are right, but state and local officials show no signs of turning over a new leaf. Unless and until they do, expect more of the same — high unemployment, sky-high taxes, endemic violent crime and a declining quality of life.
As the Tribune wrote nearly a half century ago, at a time of a similar existential crisis in 1981 Chicago, “cities stricken in this way become irrelevant. Business moves away. So do the best young people. The population ages. The city becomes a backwater.”
Chicago rose like a phoenix from that historic nadir because strong and effective leaders made difficult decisions. It’s long past time for today’s leaders to start doing the same.
