Budget season has it all: Melodrama, plot twists and a slow jams soundtrack
By India Daniels
Ready for the season finale? (Compiled image: Shutterstock/Andrey_Popov & Daniel X. O'Neil/Creative Commons)
On Monday, Oct. 3, Mayor Lori Lightfoot unveiled her $16.4 billion proposal for Chicago’s 2023 budget. For people who follow the city budget process closely, this is sort of like when the highly anticipated season premiere of your favorite TV show finally drops.
But unless it’s your job, you probably wouldn’t choose to spend your time learning about the city budget. Our data shows Newswire readers are less likely to open an issue with “budget” in the subject line. So to make the city’s 2023 budget season a little more fun, we’re leaning on the time-honored tropes of soap operas and telenovelas to make this dense topic a little spicier.
As Lightfoot said in her Oct. 3 speech, “Budgets are not just math problems. They are and must be value statements, value statements about how and why we invest and, importantly, in this city, where we invest.” Over the four to six weeks that budget season lasts (depending on how quickly the mayor and alders are able to compromise), you get a closer look at what the city actually values enough to invest in (see: closure of safety net public mental health centers in favor of contracting with private providers) and if it’s actually doing a good job (i.e. tracking how much it spends on police misconduct settlements and litigation).
Here are four things you can expect from budget season:
1. Courtroom Council chambers drama 💼
Every city department (Chicago has over 30) must appear before alders to present its work over the past year and justify the funding it is requesting for the next. After the two weeks of departmental hearings, alders propose amendments to the budget, hash out how they’ll appropriate the funds and vote on the final budget proposal, which goes into effect Jan. 1. These discussions can get tense, and provide plenty of memorable one-liners, plot twists and intrigue along the way.
2. An undercurrent of doom 😱
Like many other government bodies, the City of Chicago has a budget deficit; it spends more money than it makes. Add that to debt and pension obligations and you have a showdown that the city is (probably?) not going to be able to avoid forever (right?).
3. A slow jams soundtrack 🎵
During breaks between departmental hearings, the sound booth sets the mood with R&B, funk and soul throwback tracks.
While we have not confirmed the elusive DJ’s identity, we have been taking notes. Get in the budget season mood with our playlist:
4. A ticking time bomb 💣
City Council must approve a budget by Dec. 31, or else ... a lot of city functions would come to a stop.
THE MATH PROBLEM
Lightfoot and her top finance officials have proposed a budget of $16.4 billion to keep the city running in 2023. She’s calling it a “stability budget” because of:
The smaller-than-expected deficit ($128 million, a good look for the upcoming election)
A plan to prepay pension obligations (paying $242 million now to save $2 billion in the long-term)
No property tax hike (which would have generated $42.7 million in revenue but wasn’t great timing with inflation hitting … voters)
You won’t see many of the most visible and valuable city services in this budget: public schools (excluding pre-K), public housing, public transit, the park district and city colleges. While they do receive a portion of their funding from the city’s revenue, it’s the mayor-appointed board or commission of each “sister agency” that approves its budget, not City Council. Combined, this is roughly another $12 billion in city services.
Here’s a graphic the city made to illustrate its revenue (top half) and expenses (bottom half):
Revenue and spending in Chicago’s proposed 2023 budget. See the full infographic here.
Here’s another way of putting it. Most of the city’s green is derived from charging residents:
Taxes on financial transactions that occur within city limits (e.g. sales tax, property tax, plastic bag tax. Chicago does not charge income tax but receives a portion of what the State of Illinois collects.)
Fees for services or permits the city provides (e.g. vehicle stickers, garbage collection, water and sewer utilities)
Fines to deter or punish certain actions (e.g. parking tickets, building code violations)
Other forms of revenue include:
Grants from government or private entities, usually to fund specific initiatives (e.g. federal COVID relief funds, Illinois Department of Public Health, MacArthur Foundation)
Interest earned on investments (e.g. pensions; the city manages retirement investment portfolios for eligible police, fire and municipal laborers and employees)
Debt, spending money it doesn’t have at the moment (When someone buys a bond, it’s like they’re buying the government’s debt or giving it a mini loan that it promises to pay back using future property tax dollars or enterprise revenue.)
As the city’s finance officials create the budget, they look at all of these revenue streams and think about how to match the money the city plans on spending.
THE VALUE STATEMENT
Lightfoot would say that one of the ways her budget proposal reflects the city’s values is the tiny homes pilot program, which would test out building tiny house communities on vacant city-owned land.
While people have lived in small spaces throughout history, the modern “tiny house movement” gained popularity in the U.S. during the Great Recession. A tiny home is a small, freestanding living space, usually with a floor area of less than 500 feet. They come in many shapes; some do look like mini houses, others are made from shipping containers or may incorporate wheels for transport.
Tiny homes are not allowed under Chicago’s existing zoning and building codes. Mayor Rahm Emanuel requested information on tiny homes as an affordable housing option in 2018, but the city didn’t end up doing anything with them … until the challenge of providing non-congregate shelter during the pandemic set the stage for a comeback.
Some proponents of tiny homes are into the minimalist lifestyle, community and low cost (most tiny homes have a price tag between $30,000 and $60,000). Others see them as an innovative solution to homelessness.
But critics have raised significant red flags, arguing that tiny homes are “financially idiotic and environmentally reckless,” far from a panacea for chronic homelessness and embody the worst parts of American rugged individualism.
That’s why the city loves pilot programs. Like a pilot episode of a TV series, it’s a chance to gauge whether the concept will succeed, without putting too much money into the initiative up front. Funding for the tiny homes pilot is coming out of Chicago’s American Rescue Plan Act (ARPA) money, a one-time grant that it must spend by 2026. The tiny homes pilot is already getting disproportionate buzz relative to its actual dollar amount: $3 million.
For 2023, the city is budgeting a total of $200 million for homelessness services. In addition to funding community shelters and coordinating available beds, the city’s Department of Family and Support Services provides rapid rehousing, rental assistance, case management, wellness checks and access to showers and laundry.
But with an estimated 65,000 Chicagoans experiencing housing insecurity, that’s a pretty tiny investment.
On the day Lightfoot gave her budget address, the Bring Chicago Home (BCH) coalition put up a tent encampment in the lobby of City Hall. That demonstration didn’t get as much attention as the tiny homes pilot, but it represents a much bigger and bolder budget proposal:
A new revenue stream: Increasing the city’s tax on large real estate transactions (specifically, the 4% of property transfers in which the price tag is over $1 million) by 1.9 percentage points.
A dedicated line item: The extra $163 million the tax would generate would go to build out the city’s supportive housing services.
In an email to City Bureau, the BCH coalition emphasized that the city needs a plan, not just another project or pilot: “On the North Side lakefront, they need money for single room occupancy buildings. On the West and South sides, money may be needed to rehab vacant buildings and build on vacant lots. If we had yearly revenue coming in, we could plan this out in a way that actually makes sense and meets the needs of communities/people.”
The BCH measure hasn’t gained much traction in City Council (it got sent to the Committee on Committees and Rules, which doesn’t bode well), but supporters are working to introduce an ordinance that would put it to a vote on the February ballot. This plotline isn’t going to be resolved this budget season, but it could change future math problems and value statements.
VIEWERS LIKE YOU
Budget season is like a TV show in another important way: you’re more likely to be a viewer than part of the action.
For all the hijinks, municipal finance isn’t mindless entertainment. It’s no easy thing to jump into a discussion of a $16.4 billion budget if you missed earlier seasons, and watching alders fight it out over different line items can get old pretty quickly.
The city has increased community engagement efforts under Mayor Lori Lightfoot (it’s one of her mayor’s-offices-of). For the past few years, it has conducted budget-related stakeholder conversations across the city and online surveys that are summarized in engagement reports and tied to responsive initiatives. Many of these initiatives are promising, like expanding access to broadband internet and mental health care or streamlining city rules and processes.
But most of the city’s budget engagement happens in the summer, before the actual proposal is introduced. Once the mayor proposes the budget, opportunities for the public to play a role in the actual decision-making are limited. Residents can address City Council during public comment (five people chosen at random per meeting; three minutes per person), contact their alder or stage a protest, but it’s hard to even get a walk-on role.
The city’s engagement findings also offer a limited perspective. According to self-reported demographic data, a disproportionate number of budget engagement participants are white, live on the North Side and/or have an annual household income over $50,000. The city has not been successful in reaching the communities whose experience matters the most: those affected by disinvestment and inequitable distribution of resources.
Most engagement efforts are considered successful if they teach participants a thing or two or make them feel heard. But for a complicated topic like the city budget, truly effective engagement must give participants context to understand the issues and a way to provide actionable input.
The city’s budget engagement events have included an activity that has participants work together to allocate a less mind-boggling amount of money, say $100, across categories like health, education, housing, transportation and infrastructure, economic development, community services and public safety. While this exercise succeeds in making the budget easier to understand, it’s more about generating public awareness of the city’s competing priorities and sympathy for the tough calls that the finance experts must make, rather than collecting input that could actually influence those calls.
So how else can regular Chicagoans interact with the city budget? Here are two examples outside of the mayor’s administration:
People’s Budget Chicago (PBC)
This independent project, coordinated by local nonprofits and organizers, also hosts a budget game, but with a different purpose: to validate the insights of low-income South and West side residents, to interrogate ideas about what a community needs to be safe and thriving and to support residents in contacting their elected officials directly. PBC participants have consistently reached consensus on an allocation of resources that looks very different from the city’s actual budget, with the most dollars going toward health and housing. Participants didn’t necessarily come in looking to defund the police, but almost all groups ended up dedicating the fewest dollars to public safety. (Note: The People’s Budget Chicago is on hiatus this year but you can explore Documenters’ coverage from 2020 and 2021 here.)
Ward-based participatory budgeting
Under the aldermanic menu money program, each ward gets $1.5 million each year to spend on public infrastructure improvements, like speed bumps, streetlights and potholes. Menu money is a vestige of aldermanic prerogative, but it’s proven conducive to participatory budgeting, a democratic process (modeled on Porto Alegre, Brazil) that gives nongovernment residents a say in how public funds are spent. Alders who have adopted this approach invite residents to pitch, discuss and vote on how menu money should be spent.
Approaches like participatory budgeting and PBC are slower and more involved, but hold promise for a more democratic way, one that’s less about making Chicagoans watch the show play out and more about giving them a chance to rewrite the ending.
THE PLOT THICKENS
During a hearing with the city’s top budget officials on Oct. 6, alders took issue with the increase in the size of the Office of the Mayor, specifically what we’re calling the “mayor’s-offices-of.” (Yes, these are different things. Think of the Office of the Mayor as the umbrella and the mayor’s-offices-of as teams under it.) The proposed 2023 budget for the Office of the Mayor is $15.6 million, 94.5% of which is personnel costs.
Under the two previous mayors, Richard M. Daley and Rahm Emanuel, the number of mayoral staff fluctuated between 60 and 90. The purview of the Office of the Mayor was also relatively limited; they had mayor’s-offices-of administration, press relations, legislation and intergovernmental affairs.
Lightfoot, in contrast, has added 29 positions and eight new mayor’s-offices-of so far: community engagement, education and human services, equity and racial justice, infrastructure and services, neighborhood and economic development, policy, public safety and risk management. In 2023, she wants to add 23 positions (17 of which would be grant-funded), growing her staff to 127. She has also proposed creating a mayor’s-office-of climate and environmental equity. Emanuel dissolved the city’s Department of the Environment (1992-2012 RIP) to cut costs.
One way to interpret this is that Lightfoot is staffing up in the areas she values. At the Oct. 6 hearing, Budget Director Susie Park defended the mayor’s-offices-of as guiding policy and strategy across city government. Sounds like a good thing, right? But critics have two main concerns:
Lightfoot is growing her staff but shrinking other budgets.
The mayor’s-offices-of are duplicating or influencing the work of existing departments behind alders’ backs. None of Lightfoot’s new mayor’s-offices-of are subject to budget hearings with City Council.
Furthermore, many are disappointed by Lightfoot’s proposed mayor’s-office-of climate and environmental equity because she made a campaign promise in 2019 to reestablish the city’s Department of the Environment. A six-employee mayor’s-office-of created a couple months before Lightfoot seeks reelection isn’t the value statement that environmental justice and stewardship advocates were hoping for.
A look at past city budgets (1982-present are online; physical copies dating farther back are in the municipal reference collection at Harold Washington Library) reveals that the city isn’t exactly consistent in its org structure. Creating a mayor’s-office-of has sometimes been a first step toward the creation of a department, which is generally larger and more established. But in many cases, the particular designation (be it department, division, commission or office) seems arbitrary. The 1996 budget had a 69-employee Mayor’s Office of Special Events that dwarfed the 21-employee Department of Cultural Affairs (in the present day, these entities have been combined as DCASE).
Even the “Mayor’s” possessive is ambiguous; despite its name, the Mayor’s Office for People with Disabilities (which predates Lightfoot’s tenure) is not listed under the Office of the Mayor’s budget with all the other mayor’s-offices-of.
Like all the best flawed heroes, Chicago (its bureaucratic structure, at least) is a bundle of contradictions.
Back to soap operas. Guiding Light began as a radio serial in 1937 and later ran as a television show until its cancellation in 2009. Over its seven-decade run, it not only had to come up with fresh plot twists and characters, it had to keep up with the real-life social context. Chicago government has the same challenge; it can’t just copy-and-paste old scripts into 2023 without a few changes. It can and must rethink how it departmentalizes, prioritizes and holds itself accountable.
THE FINALE
City Council is tentatively scheduled to vote on the proposed 2023 budget on Monday, Nov. 7, at 10 a.m. To mark the occasion, we’ll be hosting the third annual #ChiBudgetBingo. Here’s a sneak peek at this year’s board; click here for instructions on how to participate.