Chicago bailout: Aldermen push to spend federal relief on social services instead of debt
Mayor Lori Lightfoot won’t provide details on how she wants to spend an avalanche of federal relief money going to Chicago until mid-September, when she plans to present her 2022 budget.
Budgets are typically proposed by Chicago mayors in October. The news that Lightfoot is increasing it by a full month came just hours after a group of aldermen announced it would introduce an emergency ordinance to ensure the city quickly spent the $ 1.8 billion. federal dollars in social services.
Their ordinance would not allow the money to be used to pay down the city’s debt, as Lightfoot prefers.
“We’re sitting on at least half of that money, and the federal government hasn’t given it to us to sit on,” Ald said. Daniel La Spata (1st), one of 12 co-sponsors of the Chicago bailout, said Tuesday at a press conference held at Daley Plaza. “They sent us these dollars so that we could distribute them as quickly as possible. “
But in a letter to the aldermen on Tuesday evening, the city’s budget manager, Susie Park, said meetings with the council’s “budget working group” will begin in July and run throughout the year. been to get your feedback “on how federal relief funds should be spent.
“In an effort to accelerate the application of these [federal] dollars to Chicagoans while leaving time for our residents and city council members, we will be working on the allocation… and the 2022 budget simultaneously, ”Park wrote.
“We will also accelerate the introduction of the 2022 budget until mid-September, about a month earlier than our usual, as well as amendments to the 2021 budget. By considering all income and expenditure at the same time, we offer a complete view of the city’s investments.
The ordinance that La Spata and the other 11 aldermen plan to introduce this week calls for money to be earmarked and quickly spent on a range of immediate needs, including helping people behind on water bills and the rent, and expanding access to child care and mental health services. facilities.
Lightfoot had planned to use more than half of the money to repay loans that followed the deficits caused by the pandemic. But his plan was in jeopardy after the Treasury Department issued guidelines last month saying the money couldn’t be spent on tax cuts, pension funds, debt services, legal settlements. or judgments or be deposited in funds for rainy days.
“Although the (federal relief) program offers great flexibility to beneficiaries to respond to local conditions, these restrictions will help ensure that funds are used to augment existing activities and urgent needs,” the guidelines say.
In his letter, Park noted that the US Treasury Department’s “interim guidance” on how the money might be spent will be open for public comment until July 16 and that the Office of Budget and Management of the city “will provide comments and seek clarification on the advice.”
Ald. Byron Sigcho-Lopez (25th), a sponsor of the ordinance to be presented on Wednesday, said the money was needed in hard-hit communities as soon as possible.
“We can’t wait any longer. Now is the time to act, “he said.
Lightfoot balanced its 2021 budget by refinancing $ 1.7 billion in general bond and sales tax securitization bonds and claiming $ 949 million in savings in the first two years. This approach extended the debt by eight years.
The mayor’s finance team had told aldermen that federal aid money would be used to pay off $ 965 million in loans on the fly.
Lightfoot reiterated that promise to investors last month amid strong resistance from a city council determined to use the money to fight poverty, homelessness, mental health and economic divestment.
La Spata said on Tuesday it was optimistic the ordinance would get enough votes.
“We think there is going to be a large appetite to support our communities, to keep their lives stable at this time,” he said.