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* Mayor Lightfoot and her budget team briefed reporters yesterday…
The bulk of the total federal influx includes $470 million to the city from the Coronavirus Relief Fund, nearly $800 million dedicated to the CTA and $205 million for Chicago Public Schools.
O’Hare and Midway airports also will get a split of the $10 billion the legislation includes for airports across the country. The city currently is in discussions with the Federal Aviation Administration and still doesn’t know how much Chicago’s airports will receive, but officials said they expect it will be “considerable assistance.”
* More from the Sun-Times…
Lightfoot cracked the door open to a tax increase.
“I’m gonna be very clear-eyed about the fact that if there is a need to raise additional revenue after we see in the long term what this impact will be, I’m gonna be straightforward and very transparent about it,” she said.
* Crain’s…
While it’s too soon to tell for sure, the mayor said, she took layoffs and a delayed pension payment off the table when and if the city recalculates its budget.
Layoffs “don’t make sense to us” because government should be spurring and not retarding growth now, Lightfoot said. As for pensions, “We’re not going to compromise our long-term financial position.”
Lightfoot et al. continued to assert they expect to receive $160 million in the form of a higher Medicaid reimbursement for the use of Fire Department ambulances. That application, sent to the state, has been pending in Washington for several months now, with money already included in the city’s 2020 budget.
* The incomparable Yvette Shields at the Bond Buyer…
City officials did not directly answer a question on whether pension obligation bonds are being considered beyond saying they would not take any actions that damage the city’s fiscal position. City hall and market sources have told The Bond Buyer that the city is exploring the POBs idea and bankers have been asked to run numbers on various scenarios and the administration has enlisted some aldermen to join in consideration of the idea.
One source cautioned that at this point the city was exploring the idea and sizing, timing, and structuring were a long way off if the city decided to go that route and the aim would be to improve funding and not for near-term relief. […]
The city so far has spent $100 million on COVID-19 emergency response costs for equipment, supplies and quarantine and shelter sites and believes it’s eligible to receive more than $500 million in federal aid from CARES with its eligibility on other packages still under review.
The city maintains strong liquidity of more than $2 billion in cash to manage near-term costs, as noted by rating agencies. “We are not looking to draw down our reserves” and have flexibility with liquidity, Bennett said.
They’re also taking a look at the Federal Reserve’s new Municipal Liquidity Facility. Click here for more info on that.
The governor should also be sharing far more detailed budget info. He has said he’s focusing on keeping people healthy, and that’s definitely his top job right now.
But Illinois’ finances are always an issue and the public has a right to know what this crisis is doing to the state’s bottom line.
posted by Rich Miller
Friday, Apr 10, 20 @ 10:11 am
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Tax increases and budget cuts are going to be needed. And it can’t just be a tax increase on the wealthy. No sacred cows.
Comment by Chicagonk Friday, Apr 10, 20 @ 10:20 am
I agree with Chicagonk. Passing the progressive tax is only a starting point. The Governor is going to have no choice but to also do at least the other alternatives he presented if the progressive tax isn’t passed: Raising taxes 20% on everyone (even if progressive tax passes), AND the 6.5-15% across the board cuts (with maybe health care and public safety agencies excepted), which will likely mean layoffs. These will have to happen even if the progressive tax passes.
Comment by Leatherneck Friday, Apr 10, 20 @ 10:29 am
== what this crisis is doing to the state’s bottom line.==
It’s gonna be ugly. Almost $0 revenue coming in from whole sectors like travel and entertainment, tens of thousands no longer working and so unable to contribute to the pot, sharp drop in sales tax because everyone is spending less. Add to that we’re spending a fortune on PPE and ventilators, and drastically overpaying for all of it thanks to the feds refusal to nationalize our response. I don’t know what cuts you can make because state gov’t was already hollowed out, but at minimum it is going to have to stay hollowed-out for a long time to come. And we were already in the hole to begin with. Even if the progressive tax passes, it isn’t going to be enough. I know states aren’t supposed to run deficits, but unfortunately our budgets are only going to be balanced on paper for a long time to come.
Comment by Lester Holt’s Mustache Friday, Apr 10, 20 @ 10:33 am
=== Raising taxes 20% on everyone (even if progressive tax passes), AND the 6.5-15% across the board cuts (with maybe health care and public safety agencies excepted), which will likely mean layoffs. These will have to happen even if the progressive tax passes.===
(Sigh)
It’s amazing the “solutions” others have without getting an assessment of the problems.
The logical thing, the thing I’d like to see, in order, are the challenges and issues that the budget now faces, the shortfalls and dollars to sense on where we stand.
I’m always leery of folks so bent on “solutions” when the call here is a want for the governor to first tell us how bad things are.
You’ll get your mouth breathing in soon enough, but take a breath and ask where we stand, outside the guessing or forecasting.
Comment by Oswego Willy Friday, Apr 10, 20 @ 10:34 am
I would hope that Pritzker approaches the budget impact with the same level of transparency he’s shown on addressing the disease. Given his desire to implement the fair tax it would be political malpractice not to. Nobody will be able to argue that added revenue isn’t needed and if the choice is the fair tax vs. an increased flat tax the argument becomes very compelling for the large percentage that would see no increase.
Comment by Pundent Friday, Apr 10, 20 @ 10:43 am
==“We’re not going to compromise our long-term financial position.”==
Because it already is.
Comment by City Zen Friday, Apr 10, 20 @ 10:44 am
It’s a good thing that the state started collecting sales tax on remote vendors. I have to image it is one of the few revenues going up at the moment.
I think a temporary raise to income tax will be unavoidable (no matter which tax structure we have) but it going to be a difficult fall for the fair tax people.
Comment by twowaystreet Friday, Apr 10, 20 @ 10:46 am
=I think a temporary raise to income tax will be unavoidable (no matter which tax structure we have) but it going to be a difficult fall for the fair tax people.=
So the argument against the fair tax is going to be we need to raise taxes on everyone? Who exactly going to be advancing that? Certainly not those opposed to the fair tax. Their arguments are rooted in keeping taxes exactly as they are today. Heck, truth be told they’d probably like to see a tax cut.
Comment by Pundent Friday, Apr 10, 20 @ 10:52 am
=== Who exactly going to be advancing that?===
Yup. It’s a dead-end street.
Comment by Rich Miller Friday, Apr 10, 20 @ 10:54 am
=== but it going to be a difficult fall for the fair tax people===
This wishful thinking narrative isn’t reading the room.
The “haves and have nots” during this pandemic, making the 3% pay more as they complain about coyotes howling in Naperville as others are being threatened with not knowing where their next meal is… this will sink the fair tax.
Can’t stand bad baseball or politics.
Wishing a want is bad politics.
Comment by Oswego Willy Friday, Apr 10, 20 @ 10:55 am
I misread.
=== I think a temporary raise to income tax will be unavoidable (no matter which tax structure we have) but it going to be a difficult fall for the fair tax people.===
Apologies.
Comment by Oswego Willy Friday, Apr 10, 20 @ 10:56 am
Those opposing the fair tax don’t have to say that it means everyone’s taxes are going up. They will just start calling it a blank check knowing full and well that it means everyone’s tax rate is going up and IF the fair tax people concede that they need to raise the rates it boost the oppositions argument to voters.
It’s the fair tax people that will have explain it and no longer would be able to campaign on “97% of people’s tax will not be going up.”
My point is if the the GA has to change the graduated tax rates before Nov it makes the fair tax people’s argument much more nuanced, which is never good for elections.
Comment by twowaystreet Friday, Apr 10, 20 @ 10:57 am
=They will just start calling it a blank check knowing full and well that it means everyone’s tax rate is going up and IF the fair tax people concede that they need to raise the rates it boost the oppositions argument to voters.=
Conceding a tax increase would be an unforced error. Millionaires tax has a much better ring to it and polls very well. Now if you think there will be great sympathy towards millionaires at the same time we’re dealing with record unemployment, well I can’t help you with that.
Comment by Pundent Friday, Apr 10, 20 @ 11:07 am
==Conceding a tax increase would be an unforced error. ==
Godspeed to the Governor’s budget office and the GA to figure out a budget that doesn’t include an income tax raise. I think we will all be waiting for the Governor to give an update on the state’s finances to know for sure.
Comment by twowaystreet Friday, Apr 10, 20 @ 11:11 am
More revenue from higher earners is really needed now. But that wouldn’t come until at least next year, if it happens at all. In the meantime we have to do everything in our power to not hurt those who would be hurt the most by budget cuts.
So glad we have the current partisan makeup in state government. It gives hope that there will be minimization of harm.
Comment by Grandson of Man Friday, Apr 10, 20 @ 11:13 am
Agreed re: sympathy for millionaires in a time of record unemployment.
I also suspect there won’t be much sympathy for the “All public workers get to keep their jobs with pay raises and full benefits, because we will just raise taxes” argument.
Comment by JB13 Friday, Apr 10, 20 @ 11:14 am
==it makes the fair tax people’s argument much more nuanced==
I expect “Soak the rich” will play well. no nuanced at all.
Comment by Bigtwich Friday, Apr 10, 20 @ 11:14 am
=== won’t be much sympathy for the “All public workers get to keep their jobs with pay raises and full benefits, because we will just raise taxes”===
Yep, police, fire, the public is really “angry” with them right now as they too succumb to the pandemic.
Yikes, man, are you paying attention to what’s going or do you have such distain for public employees you can’t see health care workers, DCFS, any who work with the public people are angry at now…
That’s a bubble of IPI
Comment by Oswego Willy Friday, Apr 10, 20 @ 11:17 am
==It’s the fair tax people that will have explain it==
Yep.
Comment by City Zen Friday, Apr 10, 20 @ 11:21 am
“All public workers get to keep their jobs with pay raises and full benefits, because we will just raise taxes”
Who is professionally bitter about it? The usual suspects like the IPI and other wealthy or well-off right wingers. Good luck with that messaging in a state with a shrinking GOP base.
Right now we are seeing the benefits that public employees bring to society, doing essential jobs and providing for basic needs.
Comment by Grandson of Man Friday, Apr 10, 20 @ 11:24 am
=I also suspect there won’t be much sympathy for the “All public workers get to keep their jobs with pay raises and full benefits, because we will just raise taxes” argument.=
Yeah like our first responders and health care workers that got us through this horrific event or our teachers who suddenly we have a lot more respect for having experienced elearning and the shut down of schools first hand. Yeah, people will be going after those folks with pitch forks.
Comment by Pundent Friday, Apr 10, 20 @ 11:24 am
=== Yep===
The top 3% will have their taxes raised.
You know, the rich getting Coronavirus tests that *you* can’t get. Those who have jobs that while *you* don’t.
It’s comical how not seeing health care is the great example of wealth and this progressive tax
Comment by Oswego Willy Friday, Apr 10, 20 @ 11:26 am
Will McSweeney vote to raise taxes?
Comment by don the legend Friday, Apr 10, 20 @ 11:39 am
I’m confident the state legislature will do the right thing, but only after they have exhausted all other options. Unfortunately, they are not even close to exhausting options, and once again the can will be kicked.
Comment by Angry Republican Friday, Apr 10, 20 @ 11:51 am
In previous posts on the progressive income tax issue I have commented and provided links on the enormous wealth in Illinois and especially the Chicago Metro Area.
As of 2018 Chicago is one of the richest cities in the world with roughly 150,00 people of High Net Worth ($1 million) and roughly 3500 people of Ultra High Net Worth ($30 million). From what I have read the net worth does not include primary residence.
I am tired otherwise I would provide more links to back up my stats but they are easily available on the internet.
https://samnytt.se/wp-content/uploads/2018/02/GWMR-2018.pdf
From the link above:
Chicago: Total wealth held in the city amounts to US$968 billion. Highly diversified economy. Strong
in a large number of key sectors.
Now, with the Illinois pension problem and other fiscal issues the result of the COVD-19 crisis will probably still involve spending cuts somewhere. But I believe the top progressive rate was not nearly high enough. There are other avenues of revenue such as a financial transaction tax, etc.
Many commenters derisively use the term “Soak the Rich” but when I read about people demolishing two-three flat apartment buildings near the 606 trail just so they can build a McMansion near the new trail I have no sympathy for the wealthy.
https://www.chicagotribune.com/columns/ryan-ori/ct-biz-606-trail-housing-prices-ryan-ori-20200115-wvjgab2h2zd63ko33t2xqerkiy-story.html
Has multi billionaire Ken Griffin stepped up to help Chicago and Illinois during the COVD-19 crisis? From what I have read he has set up his operations on a Florida beach.
Again especially as Illinois recovers from the C)VD crisis the will need to be tax increases but there will have to be spending cuts as well. But as Rich has mentioned many times, there is not much left to cut as spending is down to muscle and bone already.
Comment by Big Jer Friday, Apr 10, 20 @ 12:18 pm
a fair tax with 7 to 9 brackets with those making 20$ per hour lowered to an even 4% up from there to 8% this would be a more fair tax
Comment by leonard Friday, Apr 10, 20 @ 12:50 pm
=== a fair tax with…===
Horse… Barn…
Comment by Oswego Willy Friday, Apr 10, 20 @ 12:52 pm
The governor needs to be reminded he’s the chief executive of this state and not the chief supply clerk. Reopening needs to be his top priority. If there’s not anyone in his administration that can work on finding PPE for state facilities other than himself then he better start cleaning house. He has a state government to run. It’s going to be a hard job and painful choices will have to be made. He can make them easier by focusing on how to grow our economy.
Comment by Downstate Illinois Friday, Apr 10, 20 @ 2:01 pm
=== The governor needs to be reminded he’s the chief executive of this state and not the chief supply clerk. Reopening needs to be his top priority.===
At the cost of lives? No thanks. Covidiots want money over safety.
You can’t bring back lives.
=== It’s going to be a hard job and painful choices will have to be made.===
Choosing lives is not the worst choice. Choosing money over the loss of life is an unacceptable choice.
=== He can make them easier by focusing on how to grow our economy.===
… and the human cost?
Covidiots value money over lives, yet lives can’t be brought back when lost. It’s scary how frivolous people are with the lives of those they know… or don’t know.
Comment by Oswego Willy Friday, Apr 10, 20 @ 2:05 pm
=Reopening needs to be his top priority.=
And with inadequate testing, contact tracing, and PPE exactly how will he accomplish this top priority of his? And what if Prtizker figures this out but other governors don’t. What if we have our act together but Missouri, Iowa, Wisconsin and Indiana don’t? Pritzker can’t just order to businesses to reopen if the conditions don’t support it.
There has to be a coordinated federal and state response to this.
Comment by Pundent Friday, Apr 10, 20 @ 2:41 pm
“Covidiots value money over lives”
The irony is that if we open the economy too soon, business would be further damaged as well as more people getting sick and dying. One would think “pro-business” people would understand that.
Comment by Grandson of Man Friday, Apr 10, 20 @ 2:52 pm