49th Ward Budget Survey & Town Halls
The city is heading into its budgeting season, and we want to hear from you! Please take a moment to complete the 49th Ward budget survey online (en español aquí) to help us identify the priorities of 49th Ward residents. Your responses will help inform Alderwoman Hadden we enter discussions for next year's budget.
Our office will share the results of this survey after it closes on October 4 in our newsletter, on our social media pages, on our website, and at two 49th Ward budget town halls.
Save the dates! We will host two 49th Ward budget town halls where we will discuss the city's process in forming its annual budget, the challenges we face this year, and the results of this survey. Residents will also have the opportunity to ask questions and provide feedback as we enter the budget season.
First Town Hall: Saturday, October 10, at 10 am
Second Town Hall: Thursday, October 15, at 6 pm
Register to attend a Town Hall online at bit.ly/townhall2021budget (Spanish translation available).
Do you know someone in the 49th Ward who should complete this survey? Please share the link (bit.ly/2021budgetsurvey) with them!
2021 BUDGET FORECAST
On August 31, Mayor Lightfoot and Budget Director Susie Park released their 2021 Budget Forecast. The reality we're facing is stark, with the toll of COVID-19 having a compounding effect on the city's finances.
In fiscal year 2020, the City is facing a budget shortfall of approximately $800. The shortfall is a direct cause of the ongoing COVID-19 crisis and the economic fallout Chicago - and other municipalities across the country - is continuing to experience.
The crisis of COVID-19 and the absolute necessity for the city to respond to curtail the spread of the virus is a direct cause of this year's budget shortfall. The need for people to stay at home and socially distance reduced the city's economic activity. This is especially true for the city's tourism and hospitality industries. Restaurants were forced to close, major conventions were canceled, festivals and concerts had to cancel, and our hotel industry took a significant hit. As a result, the city's Gross Domestic Product has fallen 10%, the city's unemployment has reached 18.7% (up from 3.6% in February), and consumer spending has fallen 12%.
To fill the $800 million budget gap, the Budget Office is looking to leverage $350 million in CARES Act monies. This money can only be spent on city services in response to the COVID-19 crisis and cannot go to replace lost revenue from the economic fallout of sheltering in place. The Budget Office is also refinancing debt, which will go towards closing the 2020 budget shortfall.
Finally, the Budget Office is a part of a coalition of municipalities across the country that is calling on our Federal legislators to provide supplemental funding to fill revenue gaps, extend unemployment benefits, provide funding for infrastructure, and provide additional affordable housing assistance.
If additional federal monies are not allocated to municipalities and states across the country, the city might be forced to look at spending and services efficiencies (i.e., furloughs, layoffs, and cuts).
During the address on Monday, Mayor Lightfoot also shared the 2021 Budget Forecast. The forecast is equally as stark as the 2020 figures, with the city facing a $1.2 billion budget gap.
The 2021 Budget Forecast anticipates an increase of $421 million by the city and a decrease of $783 million in revenue. The decrease in revenue is, again, a direct cause of COVID-19 and, at this time, only a projection. This figure makes up 65% of the projected budget gap for 2021, once again exemplifying the devastating impact the COVID-19 crisis has not only had on public health but the economy.
Additionally, new costs are planned for 2021. Primarily, the city's mandated pension increase in the pension payment by almost $100 million and contractual pay increases contribute to the 2021 budget gap.
To address the projected 2021 budget gap, the Budget Office is looking for tax valuations, including large TIF surpluses. The city is also exploring the non-possessory lease tax for computers as a potential revenue stream. Additionally, the Mayor called on Springfield to provide Chicago with its fair share of the Local Government Distributive Fund (LGDF).
The Mayor's Office indicated that they've been working closely with Springfield on ushering in a casino and entertainment district to the city. A final location for the entertainment district has not yet been determined, but the city has issued a Request for Information to help inform any final plan.
Finally, the Mayor and the Budget Office are evaluating the city's contracts to see if there are any cost-saving measures that can be implemented. An increase in property taxes and furloughs are at the end of the list of tools the city is exploring to address the 2021 budget gap.
As budget hearings commence, our office will share more information about budget proposals and ways our community can engage around the 2021 budget process.