Revised $16.6B budget advances to full City Council, without Mayor Johnson’s corporate head tax
The Chicago City Council moved one step closer toward full-blown political mutiny on Wednesday, approving the alternate city budget pushed by opposition aldermen that does not include Mayor Brandon Johnson’s corporate head tax.
The Budget Committee chaired by mayoral ally Jason Ervin (28th) approved the spending plan a day after the Finance Committee signed off on a revised revenue package that would raise taxes on plastic shopping bags and off-premise liquor sales, authorize video gambling and apply congestion fees to Uber and Lyft rides in a broader downtown area.
After a nearly six-hour hearing, the Budget Committee voted to advance the revised budget to the full City Council by a 21 to 13 vote.
Over the objections of both conservative and moderate alderpersons, Ervin during the hearing gave the mayor’s finance team a forum to shoot down assumptions made in the revised revenue plan.
Budget Director Annette Guzman and Chief Financial Officer Jill Jaworski argued that the alternative revenue plan falls $163 million short, setting Chicago up for a mid-year budget shortfall that would require a supplemental budget, as well as painful budget cuts and steep tax increases — or a combination of the two.
They took aim at the revenue assumptions made for the tax increases to liquor, plastic bags, as well as at the opposition group's forecast for revenue from video gambling, augmented reality and advertising on city vehicles and other assets.
They argued that lifting the Chicago ban on video gambling could end up costing Chicago $3 million because it would reduce casino revenues generated by Bally’s, the gambling giant operating a temporary casino at Medinah Temple and building a permanent casino in River West.
Johnson has accused renegade alderpersons of doing the bidding of “certain corporate interests” by replacing his already-rejected corporate head tax with more than $90 million worth of “enhanced debt collections on everyday Chicagoans.” He has branded their proposal “immoral” and “simply not feasible.”
Jaworski said there would be no market for selling $1 billion in city debt to collection agencies.
“The types of sales of receivables that are done by governments are almost all sales of property tax debts” that are “the most enforceable kind of debt because there is a lien on the property,” Jaworski said.
“This is really getting into the type of other debts and tickets that are owed to the city which do not have an enforcement mechanism… We ourselves don’t have the mechanisms to do this. We cannot take away licenses. We cannot place liens on these properties… We do not have a way to package this and find investors that would be willing to buy these types of debts.”
Ald. Brendan Reilly (42nd) denounced the slide presentation as a “dog-and-pony show,” adding, “Who’s checking the administration’s math?”
Ald. Anthony Beale (9th), the mayor’s most outspoken Council critic, told Guzman and Jaworksi that they “obviously disagree with 99%” of the alternate plan, adding, “The only think you agree with is the mayor’s numbers.”
Finance Chair Pat Dowelll (3rd) took aim at the mayor’s team's projection of “zero” revenues from advertising on city vehicles and property. “I sort of feel like you are hitting the [alternative] budget over the head with a hammer when it doesn’t require that,” Dowell said.
In the end, the Budget Committee ignored the warnings. The budget, the revised revenue package to support it and the management ordinance are all poised for final approval by the full City Council as early as Saturday.
The question is whether Johnson will veto a budget he believes is not balanced. The mayor’s office had no immediate comment on that question. Sources would only say that Johnson has given up on his twice-revised corporate head tax and has decided not to veto a budget without a head tax.
Johnson is even more determined to avoid a shutdown that could jeopardize vital services. He could put aside his revenue concerns and allow the revised budget to go through the City Council to avoid dragging Chicago through the political saga through the Christmas holidays.
Johnson likely knows that the opposition group is closer to the 34 votes needed for a veto override than he is to the 25 votes that would allow him to cast the tie-breaking vote in favor of his budget.
The Budget Committee also approved a companion management ordinance that takes a first step toward giving Far North Side Ald. Debra Silverstein (50th) the new Rogers Park fire station she’s been seeking and Southwest Side Ald. Marty Quinn the new police district he’s been demanding.