Mayor Lightfoot releases budget forecast with $127.9 million shortfall, $42.7 million property tax hike
CHICAGO (CBS) -- Facing the smallest budget shortfall of her tenure, a $127.9 million deficit for 2023, Mayor Lori Lightfoot is expecting a $42.7 million property tax hike as she prepares to run for a second term.
That property tax hike is about half of what she could have sought under the plan approved by the City Council two years ago tying annual property tax increases to the rise in the consumer price index.
While the consumer price index rose 8.5% in July, down from 9% in June, the mayor's plan for annual property tax increase caps inflation-based tax hikes at 5%, and Lightfoot's budget team is projecting a much more modest 2.5% increase for 2023.
That tax hike is based on the five-year average of the consumer price index, lower than the actual 7% increase calculated from December to December, as well as the 5% cap allowed under the city's municipal code, according to the mayor's office.
That would translate to a $42.7 million property tax increase for next year, according to the mayor's office.
"A homeowner with a house value at, say, $250,000 will pay an additional $34 a year, and to put that in terms that I can understand, that's about the price of an Al's Italian beef, hot, dipped, with extra cheese, for a family of four," Lightfoot said.
Meantime, Lightfoot said her office is working closely with the city's various departments to find various ways to cut spending, ahead of her annual budget address in October, when she will unveil her full spending plan for next year.
"If 2021 was our pandemic budget, and 2022 was our recovery budget, this must be our stability budget. Similar to previous years, in thinking about this budget deficit, we will start closing this gap by looking internally first to find solutions. We will continue, as we do every year, to identify efficiencies to be better stewards of residents' tax dollars," she said.
The mayor's budget forecast sets the stage for negotiations to begin with members of the City Council ahead of formal budget hearings in October and November.
But even that relatively modest property tax increase could face pushback from the City Council as the mayor and aldermen prepare to run for re-election in 2023.
Already, Ald. Brendan Reilly (42nd) has introduced an ordinance that would repeal the policy of enacting annual property tax increases tied to inflation.
Still, balancing the budget for 2023 shouldn't be as monumental task as the past two years.
The city faced a $1.2 billion shortfall headed into 2021, and a $733 million shortfall for 2022 – prompting the mayor to utilize federal stimulus funds; tap into surpluses in tax increment financing; eliminate more than 1,900 vacant city positions, including more than 600 positions at the Chicago Police Department; refinance hundreds of millions of dollars in city debt; and push through that annual property tax hike.
