CHICAGO — The Chicago City Council passed the City’s 2021 pandemic budget Tuesday, a $12.8 billion plan that looks to address a historic $1.2 billion deficit.
The controversial budget was not approved without difficulty, as the proposal passed with 28 yes votes and 22 no votes.
Many of the city’s budgetary challenges in 2020 are due to the COVID-19 pandemic, with an impact that caused more than 65 percent of the historic deficit.
Due to the COVID-19-related losses in revenue, the budget includes the issuance of general obligation and sales tax securitization corporation bonds for savings to help replace the one-time losses.
The transaction, expected to achieve $501 million in budgetary savings for 2021, looks to take advantage of favorable market conditions to refinance current debt, which has a higher interest rate, with lower interest rate debt to offset the cost of the debt structuring for budgetary savings.
Lightfoot’s plan also incorporates a wide variety of revenues, including a one-time draw from the rainy-day fund and a $93.9 million property tax levy.
The spending plan also includes a controversial $94 million property tax hike and a new three-cent gas tax.
Several aldermen spoke out against the sources of revenue.
“It’s a budget rooting in regressive taxation,” 25th Ward Ald. Byron Sigcho-Lopez said.
In order to get enough support from aldermen, the mayor agreed not to lay off city workers and added more funding for violence prevention.
Among the investments the new budget includes are an additional $10 million for violence prevention, $20 million for mental health, $11 million for returning residents and workforce development as well as $65 million for affordable housing.
Ultimately, aldermen on the fence decided Lightfoot’s budget was the only path forward.
“This is not an ideal budget, but it is a good budget to pass,” 17th Ward Ald. David Moore said.
The City Council’s budget committee passed Lightfoot’s proposal last week by a vote of 26 to 8.