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Chicago projects $733 million budget shortfall for 2022

Mayor Lori Lightfoot and city finance officials blamed the projected deficit on the continuing financial strain of the Covid-19 pandemic. Critics say it's due to city leaders' refusal to slash funding for the police department.

CHICAGO (CN) — Chicago Mayor Lori Lightfoot's office released the 2022 city budget forecast on Wednesday, projecting a $733 million shortfall for the coming fiscal year.

While not as extreme as last year's historic $1.2 billion deficit, it still bodes poorly for the city's financial future. Budget officials attributed the gap to the ongoing impacts of the Covid-19 pandemic.

“As was the case in fiscal years 2020 and 2021, much of the 2022 gap is due to pandemic-related revenue loss," Chicago Chief Financial Officer Jennie Huang Bennett said.

However, both Bennett and Lightfoot heralded the roughly $500 million shrink between the 2021 and 2022 deficit as proof that the city is slowly bouncing back from the pandemic and on the road to economic recovery.

“While we still have hard work ahead of us in order to close this gap, this figure is a great indication that our city is fiscally bouncing back from this crisis,” Lightfoot said in a statement. “Whereas last year we were faced with a $1.2 billion ‘pandemic budget,’ this year we have shifted to a ‘recovery budget’ that not only reflects the challenges we have been presented with, but the number of resources we’ve brought to bear to address them.”

Progressive critics of Lightfoot's administration took issue with this characterization of the deficit, arguing that much of it could be attributed to the city's overfunding of the Chicago Police Department. The CPD is, for Chicago's size, one of the largest and most well-funded police departments in the country. With over 12,000 officers, its 2021 budget was almost $1.7 billion, accounting for about 40% of the city's corporate fund expenditure. The proposed 2022 budget states that an additional $274 million will be necessary to pay officers' pensions.

"Forty percent of our budget goes to an ineffective, tortuous, murderous organization... we want that to be redistributed," Damon Williams, an activist with the DefundCPD campaign, said in an Aug. 3 press conference on the budget.

Lightfoot, who once lead the Chicago Police Board, cut 2021's $1.2 billion budget gap not by significantly defunding police - the department's 2021 funding was only reduced from its 2020 level by about $59 million - but by the implementation of austerity measures. Drivers were fined if they were found exceeding the speed limit by six miles per hour or more and local property taxes were raised, as was the local fuel tax.

Several alderpersons labeled these measures "regressive taxes" that targeted the city's low-income residents.

”This is a budget that relies on regressive revenue measures like parking meters and ticketing instead of looking at alternatives directed at making the wealthy pay,” Alderwoman Rossana Rodriguez Sanchez of the 33rd Ward said last November.

Rodriguez Sanchez was in the minority of alderpersons who voted no on the 2021 budget – a vote that was, even for Chicago politics, embattled.

"Don't ask me for shit for the next three years," Lightfoot famously warned the City Council's Black Caucus members who considered voting no on the budget.

The 2022 budget proposal strikes a slightly more conciliatory tone. The press release announcing the forecast said the budget aims to direct federal Covid-19 relief funds from the American Rescue Plan toward small businesses, rental assistance and community public services.

"As part of the 2022 budget, the city will propose further investments using ARP funds to assist communities that have been hardest hit by the pandemic while continuing to support the Covid-19 response and recovery," the press release states.

The budget proposal itself is vague on how the federal funds will be spent. A total of about $782 million is available to the city from the ARP, but the only thing the budget proposal states it will be used for specifically is to avoid refinancing $500 million of the city's debt. To pay off the remaining $733 million gap, the city said it would look at "department efficiencies" and "financial reform."

Alongside the budget proposal, Chicago officials also announced Wednesday they will use the remaining $37 million of the city's own coronavirus relief fund to invest in public services.

"These investments include $14 million for youth prevention programming, $9 million for neighborhood recovery initiatives and $14 million for childcare assistance," the press release states.

But Lightfoot's critics say it's not enough, especially after the mayor said Wednesday that "we have to" increase the CPD budget.

"If all you fund is punishment and violence, that’s what you will continue to create," Rodriguez Sanchez said in a Wednesday tweet. "We need structures of care urgently."

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