Johnson's $300M property tax increase will be "significantly decreased," top mayoral aide says
Mayor Brandon Johnson’s proposed $300 million property tax increase will be “significantly decreased” — and replaced with a healthy mix of new revenues and reprogrammed federal stimulus funds — thanks to a collaborative process that began in earnest over the weekend.Twenty-two of the City Council’s 50 members met Saturday with top mayoral aides, including Johnson’s budget team, to begin negotiations that, some alderpersons said, should have started long before Johnson belatedly introduced his $17.3 billion budget.A memo handed out at the start of the meeting evaluated 10 possible revenue options. Many had been suggested by alderpersons during the first week of budget hearings or included in the Civic Federation’s pre-budget analysis.Ideas ranged from increasing the $9.50-a-month garbage collection fee by varying levels, to raising taxes on items including cigarettes, parking, bottled water, gasoline and liquor, to raising the amusement tax from 9% to 14% — but only on streaming services. One of the biggest-ticket items — bringing in nearly $100 million — involves raising the personal property lease tax on cloud computing from 9% to 10.25%.Yet another memo distributed at the meeting outlined various “scenarios” for using some or all of the $280 million in unallocated federal pandemic relief funds to mitigate the need for a property tax increase. If $155 million in federal relief funds are used, there would be “no programming beyond 2024 with over 100 layoffs in early 2025,” the memo states. Another option: canceling the wildly-popular Guaranteed Basic Income program and small business assistance. That would save $60 million.The most drastic scenario “sweeps all remaining funds" the city received through the American Rescue Plan Act, including remaining 2024 funding, which for now is "allocated for staff and tied up in contracts and anticipated end-of-year invoices.”A third memo evaluated the potential long-term cost of reducing the $272 million the mayor budgeted to fund city pensions above the contribution already mandated by state law. Related Lightfoot says she’s handing Johnson a city with rosy financial future The practice of making additional annual pension payments was initiated by Mayor Lori Lightfoot and continued last year by Johnson. Reducing that payment would “damage the city’s credibility with rating agencies,” jeopardizing the bond rating that determines city borrowing costs, according to the memo. It also would “increase future contributions by the city” and dramatically reduce long-term savings generated by early retirement of the city’s pension debt.For example, a 10% reduction saves $27 million now but would cost the city $380 million over 30 years. A 30% cut saves $81.6 million now, but would cost $1.3 billion by 2054.Senior mayoral adviser Jason Lee said Monday Johnson is prepared to support a “number of” revenue options.“The question is always: 'What can the Council get behind?' And this process was convened to ascertain that. There were no pre-conditions. No set numbers,” Lee said.“There’s a lot of pathways to replace a lot of the revenue currently derived from property taxes. ... The mayor is open to things that are responsible that don’t create layoffs and don’t gut critical investments. That’s a wide berth to come up with the right solutions.”Kennedy Bartley, Johnson’s managing deputy for external relations, said Johnson’s decision to begin negotiating in earnest with the Council had nothing to do with the special meeting set for 9 a.m. Wednesday. Kennedy Bartley speaks during a news conference outside City Hall in July.Pat Nabong/Sun-Times The meeting was called to vote down Johnson’s $300 million property tax increase and prevent the mayor from “running out the clock” by dragging negotiations into late December.“We never once asked an alderman not to show up or not to vote it down,” Bartley said.“If the Council feels as though they need this meeting to show their homework to their constituents, then it’s fine. ... Hard work preceded this meeting and hard work will take place after this meeting because we have a mayor that believes in collaboration and transparency and protecting working people.”A “lot of inroads” were made over the weekend in an attempt to hammer out a compromise that can pass, Bartley said.“There is going to be a significant decrease to the property tax increase as a result of the leadership of the mayor and the alders that rolle
Mayor Brandon Johnson’s proposed $300 million property tax increase will be “significantly decreased” — and replaced with a healthy mix of new revenues and reprogrammed federal stimulus funds — thanks to a collaborative process that began in earnest over the weekend.
Twenty-two of the City Council’s 50 members met Saturday with top mayoral aides, including Johnson’s budget team, to begin negotiations that, some alderpersons said, should have started long before Johnson belatedly introduced his $17.3 billion budget.
A memo handed out at the start of the meeting evaluated 10 possible revenue options. Many had been suggested by alderpersons during the first week of budget hearings or included in the Civic Federation’s pre-budget analysis.
Ideas ranged from increasing the $9.50-a-month garbage collection fee by varying levels, to raising taxes on items including cigarettes, parking, bottled water, gasoline and liquor, to raising the amusement tax from 9% to 14% — but only on streaming services. One of the biggest-ticket items — bringing in nearly $100 million — involves raising the personal property lease tax on cloud computing from 9% to 10.25%.
Yet another memo distributed at the meeting outlined various “scenarios” for using some or all of the $280 million in unallocated federal pandemic relief funds to mitigate the need for a property tax increase. If $155 million in federal relief funds are used, there would be “no programming beyond 2024 with over 100 layoffs in early 2025,” the memo states. Another option: canceling the wildly-popular Guaranteed Basic Income program and small business assistance. That would save $60 million.
The most drastic scenario “sweeps all remaining funds" the city received through the American Rescue Plan Act, including remaining 2024 funding, which for now is "allocated for staff and tied up in contracts and anticipated end-of-year invoices.”
A third memo evaluated the potential long-term cost of reducing the $272 million the mayor budgeted to fund city pensions above the contribution already mandated by state law.
The practice of making additional annual pension payments was initiated by Mayor Lori Lightfoot and continued last year by Johnson. Reducing that payment would “damage the city’s credibility with rating agencies,” jeopardizing the bond rating that determines city borrowing costs, according to the memo. It also would “increase future contributions by the city” and dramatically reduce long-term savings generated by early retirement of the city’s pension debt.
For example, a 10% reduction saves $27 million now but would cost the city $380 million over 30 years. A 30% cut saves $81.6 million now, but would cost $1.3 billion by 2054.
Senior mayoral adviser Jason Lee said Monday Johnson is prepared to support a “number of” revenue options.
“The question is always: 'What can the Council get behind?' And this process was convened to ascertain that. There were no pre-conditions. No set numbers,” Lee said.
“There’s a lot of pathways to replace a lot of the revenue currently derived from property taxes. ... The mayor is open to things that are responsible that don’t create layoffs and don’t gut critical investments. That’s a wide berth to come up with the right solutions.”
Kennedy Bartley, Johnson’s managing deputy for external relations, said Johnson’s decision to begin negotiating in earnest with the Council had nothing to do with the special meeting set for 9 a.m. Wednesday.
The meeting was called to vote down Johnson’s $300 million property tax increase and prevent the mayor from “running out the clock” by dragging negotiations into late December.
“We never once asked an alderman not to show up or not to vote it down,” Bartley said.
“If the Council feels as though they need this meeting to show their homework to their constituents, then it’s fine. ... Hard work preceded this meeting and hard work will take place after this meeting because we have a mayor that believes in collaboration and transparency and protecting working people.”
A “lot of inroads” were made over the weekend in an attempt to hammer out a compromise that can pass, Bartley said.
“There is going to be a significant decrease to the property tax increase as a result of the leadership of the mayor and the alders that rolled their sleeves up and got to hard work over the weekend. … And the mayor doesn’t get to be written out of that narrative,” she said.
Ald. Maria Hadden (49th) and Ald. Andre Vasquez (40th), co-chairs of the City Council's Progressive Caucus, attended the weekend meetings — and plan to vote against the property tax increase at Wednesday's special Couincil meeting.
"It's great that we're having the beginning of conversations. But I don't think we're anywhere near commitments that would move anything substantially forward," Vasquez said.
"It would have been better had they listened to us months ago rather than having this being what creates the beginning of this conversation."
Hadden said Johnson's team is "concerned about Wednesday, but Wednesday is gonna happen because there's not enough time to fully flesh out some of these other ideas."
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