+ Investments

The 2020 budget includes some modest new investments for affordable housing, violence prevention, and public mental health services.

Public safety and violence prevention

I am particularly heartened that the city will be investing approximately $9 million in violence prevention programs that focus on cognitive behavioral therapy and job training and placement. According to CPD Superintendent Johnson, about 1,400 individuals in Chicago are responsible for most gun crimes. This funding will allow us to run targeted outreach programs to those individuals most at risk of perpetrating or becoming victims of gun crime. Programs like these have been models in reducing violence across the country, and I am optimistic that this modest initial investment will not only make strides in improving public safety across the city, but also grow into a true financial commitment to transformational policies that tackle the root causes of crime.

I do, however, believe critical aspects of our budget relating to public safety are misaligned with our values and needs. For most of 2019, CPD personnel have not adequately utilized existing systems to swipe in and out during their shifts, or to request and approve overtime. Accordingly, I find it deeply frustrating not only that CPD was allocated $95 million for overtime in 2019, but also that this allocation is decreasing by a mere $4 million in 2020. While I recognize that efforts are underway to rein in this excess, additional work remains.

Another worrisome aspect of the budget relates to the projected costs of legal settlements and judgments relating to alleged police misconduct. I applaud the administration for bringing added transparency to this critical issue by clearly tying this line item to CPD, thereby eschewing the long-held practice of hiding settlement costs in Department of Law line items. However, the budgeted $82.5 million figure is frustratingly high, due in no small part to the city’s continued reliance on retaining outside attorneys when we have a stable of city attorneys who are eager and able to represent the city — and at a steep discount relative to their private-sector counterparts.

Affordable housing

In addition, I see missed opportunities with regards to affordable housing, homelessness, and public mental health services. There is no bigger challenge facing the 47th Ward than its inadequate supply of affordable housing for our middle- and working-class neighbors. And while the federal and state housing authorities will be indispensable in tackling this challenge head-on, city government also has a role to play. I believe that means allocating more than the proposed $5 million to the Low-Income Housing Trust Fund to ensure that more renters with modest means can find and keep a home in our community, and that home builders can access low- and no-interest loans more easily in order to increase the ward’s affordable housing stock.

Environment

I was also heartened to learn that that the Mayor’s Chief Sustainability Officer will be tasked with helping identify various important environmental sustainability initiatives, but am disappointed that we have not created a new Office of the Environment for this person to lead and within which these initiatives can effectively develop.

Mental health

Similarly, I am happy to see that the 2020 includes approximately $8.7 million in new funding for mental health treatment services, including approximately a dozen new full-time employees and renovation funds for our five remaining city-operated clinics. It will take significant collaboration among health experts, direct service providers, and elected officials to ensure we give these clinics a real opportunity to grow and thrive. However, we must move past the argument that setting the public clinics up for success will come at the expense of non-profit medical providers that the city also funds. This sort of zero-sum budgetary approach risks pitting providers against one another.

City services

Lastly, in our first months in office, our staff has looked closely at places where our city services can improve —especially in response time. We’ve heard from many neighbors who are understandably frustrated with a long wait list for tree plantings (about three years!) and tree trims (about 6-12 months). This year’s budget only funds four vacant tree trimming positions, which will add at most two more teams to the street.

Similarly, we have heard a desire from neighbors for more capital and infrastructure improvements. I regret that this year’s allocation to the Chicago Department of Transportation is $170 million less than the 2011 allocation, even without adjusting for inflation. While substantial capital spending from the state will hopefully offset this, our office has a strong priority in investing in bike, pedestrian, and other infrastructure needs, and this budget will not move us forward significantly in this regard.

+ Revenue

Over the past few months, my office has hosted three town halls, and over 100 neighbors have filled out our budget survey. What we heard was clear: for decades, the City has raised money disproportionately from those who can least afford it, and we must work urgently to reverse that trend. I am heartened, that despite a very substantial budget gap, this budget includes no significant property tax increase. This will provide much relief to homeowners and renters who have been hit continuously with increased housing costs in a city that remains far too unaffordable, and grows increasingly so.

I also commend the Administration for surplusing $300 million in TIF funds — the largest TIF surplus in history. These funds belong in city coffers where they can be invested in our schools and social services, which is why I believe we should have given stronger consideration to surplusing the remaining $50 million in non-allocated TIF funds, thereby reducing our reliance on more regressive fees, fines, and taxes. Aggressive TIF surplusing should be the norm, not the exception. That’s why I introduced a TIF surplus ordinance to ensure surpluses happen regularly and aggressively. I am working closely with the Department of Planning, Office of Budget Management, and my colleagues to best calibrate this process, so meaningful TIF surplusing protocol can be ready for the 2021 budget.

Still, we must do more than surplus excess TIF funds and levy a congestion tax on rideshare companies to bring about the structural revenue changes that Chicago desperately needs. While this budget represents progress in its reduced reliance on regressive fees and fines, I believe it falls short of the bold change our city deserves. I am disappointed that a number of more progressive options were either taken off the table prematurely, or not fully considered. That’s why in the coming year, I am committed to working with my colleagues and the administration to explore the following revenue options:

• PILOT: Payment in Lieu of Taxes (PILOT) would ask large non-profits such as hospitals and universities to pay a portion of the property tax funds they would owe the city but for their non-profit status. Boston, for example, asks non-profits with $15 million or more in real estate holdings to contribute approximately 25% of what they would owe in property taxes, half of which can be provided as in-kind community benefits.
• TIF surplus: TIF surplus would declare Tax Increment Financing (TIF) funds that have yet to be assigned contractually to a project as “surplus”. The surplus, in turn, would be returned to the original taxing bodies, with approximately 50% going to Chicago Public Schools and 20% going to the city’s corporate fund. City budgets have relied on TIF surplus to fund operating expenses in each of the last several years; however, the process of deciding which funds are surplused has not consistently been uniform or transparent.
• Pension obligation bonds: Pension debt is a substantial piece of the city’s fiscal responsibility and addressing the pension crisis thoughtfully and carefully is essential to the long-term financial stability of the city. Pension Obligation Bonds (POBs) are a form of refinancing pension debt for bond debt. Through this strategy, the city attempts to incur in savings by being able to invest in the system sooner rather than later and lowering interest rates so the city’s required annual pension payment is paid primarily to pension payments rather than increased debt. Between 2014 and 2019 pension payments increased by $827 million-- the scale of these funds is unsustainable for the future of city finances.
• Corporate head tax: The corporate head tax would reinstate a per-employee tax on large businesses. In 2011, the last year it was in effect before city government began phasing it out, companies with at least 50 employees contributed $4 per employee per month. The head tax was eliminated in 2011 under the argument that it was negatively affecting business hiring in the city. A detailed analysis of its impacts has not been a topic of discussion or debate.
• Real estate transfer tax: The real estate transfer tax would discard the current flat tax on any real estate sale and instead adopt a progressive rate structure whereby more lucrative sales would generate additional revenue. Of note, the Bring Chicago Home coalition is advocating for this revenue to fund additional homelessness services, while the Mayor’s office has recently expressed desire to use this revenue to fund pension obligations.

+ Moving Forward

I want to express my appreciation for Budget Chair Dowell and her staff, Chief Financial Officer Bennett, Budget Director Park, and the Mayor’s Intergovernmental Affairs team for their accessibility during this budget season and their willingness to hear my questions and concerns. In talking with many of my more senior colleagues, it appears that the administration has made laudable efforts to keep City Council apprised of its proposals, and that Chair Dowell has successfully marshaled the collection of scores of memoranda regarding the inner workings of city departments.

Taking nothing away from these improvements, I sincerely believe that we must endeavor to modify the budget process in order to ensure that city council satisfies its policy making and oversight responsibilities in a thorough and independent manner.

For one, it would be extremely useful for city council committees to hold subject matter hearings throughout the year so that more of the budget season could be spent honing solutions to problems that council has already explored thoroughly. Moreover, discussions with department commissioners at budget hearings could be improved significantly by allowing aldermen to submit written questions ahead of time—and have those questions answered in writing before the hearings commence.

In addition, there should be a more robust, transparent opportunity for aldermen to submit proposed budget amendments that reflect what they have learned. The long-held process of voting on a proposed budget two weeks after hearings conclude does not, in my opinion, permit the degree of interrogation by aldermen of issues ranging from water quality and road resurfacing, to debt servicing and reimbursement for services, that residents need and deserve.

I am committed to working with the administration, my colleagues, and neighbors to start work on a 2021 budget on January 1st to best ensure our next budget reflects the sort of structural reform that we need. If you have ideas or want to get involved, please don’t hesitate to reach out to our office at info@aldermanmartin.com.

+ New revenue and savings

• $200 million reduction in debt service by refinancing existing debt to lower interest rate debt through Sales Tax Securitization Corporation (STSC).
• $47 million in additional revenue through an increased rideshare tax, designed to reduce congestion by encouraging shared rides and discouraging daytime rideshare to the central business district.
• $163 million by billing Medicaid for ambulance costs. This would be a reimbursement from the federal government. We don’t yet know if these funds will materialize, but the administration says we will know by the end of November.
• $37 million by raising the restaurant meal tax by one-quarter of one percent.
• $74 million by declaring a TIF surplus.
• Approximately 250 vacant city positions were eliminated. The city also plans to achieve a higher vacancy rate through a hiring slowdown.
• $1 million from merging our information and technology department with fleet and facilities. Although, notably, the City Council’s independent financial analysis did not find how these savings would immediately materialize.
• Additional administrative cost reductions were proposed to through merging public safety administrative positions in CPD, CFD, and OEMC into the new office of Public Safety Administration. Again, COFA did not find how these savings would immediately materialize.
• $18 million increase in property taxes to re-open public libraries on Sundays.

+ Substantial new investments

• Affordable housing: The budget allocates $5 million to the Low-Income Housing Trust Fund to help fund the creation of approximately 500 affordable housing units in gentrifying neighborhoods.
• Homelessness: The budget provides an additional $5 million to the Flexible Housing Pool to help house approximately 200 youth experiencing homelessness.
• Public libraries: The budget includes an additional $18 million to reopen public libraries on Sundays.
• Violence prevention: The City will be investing approximately $9 million in violence prevention programs that focus on cognitive behavioral therapy and job training and placement. According to former CPD Superintendent Johnson, about 1,400 individuals in Chicago are responsible for most gun crimes. This funding will allow us to run targeted outreach programs to those individuals most at risk of perpetrating or becoming victims of gun crime. Programs like CRED and READI have already begun showing proof of concepts for programs like these in Chicago.
• Public mental health: The 2020 budget includes approximately $8.7 million in new funding for mental health treatment services, including approximately a dozen new full-time employees and funds for renovations for our five remaining city-operated clinics. While some of these funds will be invested directly in the City’s mental health clinics, others will be invested in FQHCs like Howard Brown, Thresholds, and NAMI.