What’s actually in Chicago Mayor Lori Lightfoot’s budget: Property tax hikes, growing pension debt and future cuts or costs

October 14, 2021

Illinois Policy Institute experts are available to discuss the city’s financial challenges

MEDIA AVAILABILITY from the
ILLINOIS POLICY INSTITUTE

CONTACT: Melanie Krakauer (312) 607-4977

What’s actually in Chicago Mayor Lori Lightfoot’s budget: Property tax hikes, growing pension debt and future cuts or costs 
Illinois Policy Institute experts are available to discuss the city’s financial challenges 

CHICAGO (October 14, 2021) – The Chicago City Council will have its first public hearing on the 2022 budget today as budget-related ordinances are released and votes begin.

Chicago Mayor Lori Lightfoot originally proposed a $16.7 billion budget Sept. 20 that includes a $76.5 million property tax hike that will unfairly burden a city already lagging the COVID-19 economic recovery. That tax hike can be avoided by using a small amount of federal pandemic relief funding, according to an Illinois Policy Institute analysis.

The analysis also found fiscal problems are being driven by city spending on pensions. Pension spending increased 239% during the past decade, while city services spending only increased 18%.

Illinois Policy Institute experts are available for phone, in-person and remote interviews to comment on Lightfoot’s new budget. Expertise includes what challenges the city will face from relying on one-time revenue sources, how much the property tax hike will cost taxpayers, how federal funds should be used instead and why the city’s pension ramp causes problems. 

What’s actually in Lightfoot’s budget:

  • A proposed $76.5 million property tax hike, which will cost the typical Chicago homeowner an average increase of $72-$180 per year on their property tax bills, depending on where they live.
  • Using one-time federal aid that expires by 2024 to prop up $1.2 billion worth of increased spending on city services. Unfortunately, that means many programs will face cuts or require significant tax hikes within two years.
  • Pension payments costing more than $2.3 billion of the city’s budget. That’s more than a $967-million increase in pension spending since Lightfoot became mayor. Chicago taxpayers are already on the hook for $47 billion worth of city-related pension debt, which is higher than the pension debt of 44 U.S. states.
  • The budget uses roughly $1.32 billion of its $1.9 billion in federal aid from the American Rescue Plan Act for revenue replacement through 2023. That leaves nearly $581 million in flexible aid currently dedicated to new program spending. The property tax hike could be eliminated by using a small portion of that aid.

For bookings or interviews, contact media@illinoispolicy.org or (312) 607-4977.