On Oct. 21, Chicago Mayor Lori Lightfoot presented to City Council the 2021 budget recommendationsdescribed in a press release as "a fiscally responsible spending plan that leads the City along the road to recovery from the economic downturn caused by the COVID-19 pandemic."
The $12.8-billion budget proposal includes closing a $1.2 billion corporate fund budget deficit in FY 202165 percent of which is directly tied to the economic impacts of COVID-19.
Using resident input along with feedback from elected leaders and other key stakeholders, the Office of Budget and Management partnered with city departments to go through the budget, and identified more than $537 million in savings and efficiencies, including $106 million in vacancy eliminations, layoffs and furloughs; nearly $114 million in non-personnel savings; and $59 million in savings achieved by sweeping aging revenue accounts. The city also generated an additional $54 million in healthcare savings without reducing benefits.
To address the portion of the gap caused by revenue loss due to the pandemic, the city anticipates achieving $501 million from debt refinancing and restructuring by issuing general obligation and sales tax securitization corporation bonds for savings.
Along with these reforms to government operations, savings and efficiencies, this budget includes nearly $185 million in increased revenues and reserves for FY 2021. These include $76 million of TIF surplus funding, which represents an increase of $33.5 million over the 2021 Budget Forecast, $30 million from the City's Rainy Day Fund and a $51.4 million property tax adjustment that includes a yearly CPI increase, and the collection of new property not previously included in the property tax base. Together with a loss of collection adjustment on the levy for pensions not previously budgeted, the $93.9 million proposed tax levy increase represents an estimated impact of approximately $56 annually on a median home valued at $250,000.
Two additional adjustments to existing revenues are included in this budget recommendation. First is a 1.75 percentage point increase to the personal property lease tax applied to non-possessory computer leases of cloud software and cloud infrastructure that brings this tax in alignment with the tax imposed on all other lease, rental or use of rented, personal property currently taxed at 9.0 percent. In addition, the 2021 budget calls for the vehicle fuel tax on non-airline purchases to increase by three cents per gallon.