Johnson working toward budget deal that shrinks property tax increase to $68.1 million

Mayor Brandon Johnson's administration is working toward the framework of an agreement to end the budget stalemate that could shrink a property tax increase to $68.1 million while eliminating guaranteed basic income and small business programs bankrolled by federal pandemic relief funds.

The City’s Council’s unanimous decision to shoot down Johnson’s $300 million property tax increase had already convinced the mayor to cut the increase in half — to $150 million — primarily by raising taxes on cloud computing and streaming services.

To avoid being held in contempt of court, Johnson also agreed last week to restore more than 160 police vacancies that could have further undermined Chicago’s painfully slow compliance with a federal consent decree outlining the terms of federal court oversight of the Chicago Police Department.

Now, mayoral allies say Johnson is prepared to accept a much smaller property tax increase, along with budget cuts the mayor previously ruled out, to round up the 26 votes needed for passage.

An automatic escalator that would have locked in annual property tax increases to match the cost of living would be restored, raising roughly $68.1 million this year when the value of new property added to the tax rolls is factored in.

Former Mayor Lori Lightfoot proposed the annual increase, but suspended it during her failed re-election campaign. Johnson did the same in his first city budget to honor his campaign promise to hold the line on property taxes.

Johnson’s plan to raise Chicago’s liquor tax by more than 34% is also expected to be scrapped amid an outcry from Far Southwest Side Ald. Matt O’Shea (19th) and the bar and restaurant owners in his border ward and across the city.

Chicago’s $9.50-a-month garbage collection fee would remain frozen, as it has been since its inception nearly a decade ago.

Ald. Jason Ervin (28th), Budget Committee chair, has opposed any increase in a fee he calls “regressive” because Chicago homeowners pay the same monthly fee, regardless of income .

There’s also talk of raising $14.4 million through congestion pricing and generating tens of millions of dollars by requiring hospitals and other nonprofits with property tax exemptions to make what are known as “payments in lieu of taxes.”

Johnson refused to discuss any of those specifics during a news conference that followed Monday’s City Council meeting,

The mayor would only reiterate his willingness to negotiate specifics without compromising his “values” of “investing in people.”

“Once something is actually in a real proposal form, that is my preference for how I deliver information. Because the moment you start … to move and float different possibilities without something actually being in writing, that causes that much more confusion to the people of this city,” Johnson said.

The mayor dodged when asked whether he was willing to forfeit the wildly-popular guaranteed basic income program that would have given thousands of needy families $500 a month, no strings attached. Other sources said that program and a small business assistance plan would be eliminated to save $74 million.

Progressive Caucus Co-Chair Maria Hadden (49th) said she was prepared to support an increase in Chicago’s refuse collection fee, which pales by comparison to other cities and surrounding suburbs.

“It’s well under the cost of delivering the service. It’s something that we really should be looking at,” Hadden said Monday.

Ervin strongly disagreed, but he's convinced a cost-of-living increase can be justified.

“People understand that we have to incrementally deal with our property taxes. Otherwise, we end up making some fairly unusual decisions,” Ervin said.

“ We got the ordinance in place. We just need to follow the law and do what we need to do.”

The same goes for leaving in place a proposed $272 million advance payment to Chicago’s four city employee pension funds above and beyond the state-mandated contribution to those funds, Ervin said.

“We definitely need to do the pension advance. Again, these were the same types of decisions that got us to where we are today by not making those payments,” Ervin said.

Hadden said she needs to see the fine print before deciding whether or not to support the proposed compromise.

“What I’ve heard from my constituents is they could do a property tax increase that was reasonable if we were gonna be able to meet the needs on the service side,” Hadden said.

“For me, it’s never been what’s the right number. It’s what’s the full picture of things. Are we getting those mental wellness positions back in? What’s happening with some of these other commitments. What’s the housing and homelessness outlook? What’s the mental health support look like? If we’re able to continue with those programs, supports and investments and we need to have a property tax increase to do that, then I’m gonna support it. But, it’s gonna be about the whole picture.”

Ald. Andre Vasquez (40th), co-chair of the Progressive Caucus, said his support for the proposed budget compromise would be contingent on the mayor’s support for future budget reforms.

Toward that end, Vasquez introduced a revised management ordinance requiring the mayor to introduce his budget no later than Sept. 15. Among other things, the ordinance also would also require city departments to submit mid-year reports to relevant Council committees and a July 1 report by a beefed-up City Council Office of Financial Analysis.

“I want to see improvements to the process so we’re not doing this year after year. I need to see a better process where we get the data all year `round and we have regular hearings, rather than waiting until the fourth quarter to try to solve our budgets,” Vasquez said.

“Knowing how big our deficits are gonna continue to get, we need to have the Council Office of Financial Analysis to be strengthened and be able to give us more data in real time so we know we’re doing the responsible thing for the city.”

Ald. Anthony Beale (9th), one of Johnson’s most outspoken Council critics, said the proposed compromise was hammered out without consulting any of the 14 members calling themselves the “Common Sense Caucus.”

“I’ve just heard that they’ve got it down to like $60 million on the property tax increase, but they’re not saying where the rest of the money is coming from. And they’re not talking to any of us,” Beale said.

Beale said he heard over the weekend that Johnson was poised to tell the City Club of Chicago on Tuesday that he has 26 votes for a budget compromise.

“But, we’re like, 'Who the … are they talking to? It’s none of us.“

The Johnson administration also circulated a series of “talking points,” hoping to shoot down the $568 million in spending cuts demanded by the Common Sense Caucus.

It accuses the group of proposing a 21% reduction in tree-trimming and cuts so severe to the Department of Streets and Sanitation that it would “most likely” result in “a shift to every other week collection of garbage, resulting in health and safety issues as garbage carts overflow and the rodent population explodes.”