Logan Square-area aldermen want to add a suite of progressive revenue streams to the mayor’s recently proposed budget. Bringing in an extra $500-million-plus dollars, those approaches could fund things like mental health clinics and affordable housing that the mayor’s “regressive” budget neglects, the legislators said.
Alderman Carlos Ramirez-Rosa, whose 35th Ward represents a big chunk of Logan Square, and Alderman Rossana Rodriguez, whose 33rd covers much of adjacent Avondale, laid out the proposals at a budget town hall Thursday. The legislators are both members of the City Council’s Progressive Caucus, which created the proposals. They addressed about 30 residents at the American Indian Center (3401 W. Ainslie St.) in Albany Park.
“We’re hoping to push for these proposals to get the revenue we desperately need in our city,” Rodriguez said. “So we can be sure to fund the things that are important to all of us.”
A Progressive Town Hall
Those sources of revenue range from a tax on large businesses to the collection of payments from tax-exempt hospitals and universities. The aldermen are also pushing to raise the minimum wage for service workers who get tips.
Rosa and Rodriguez engaged a mostly supportive audience at the town hall, the third of six organized by the United Working Families activist group. In addition to explaining the mayor’s proposals and their own, the aldermen answered questions and asked attendees to discuss their budget priorities in small groups, promising to deliver that feedback to the mayor.
The legislators faced some pushback during the Q&A from residents concerned about violence in the 33rd Ward. Investing in violence-prevention programs shouldn’t mean ignoring the need for more police, one 33rd Ward resident said.
“This is not an ‘or’ answer. It’s policing and community-engagement,” the resident said. “Your No. 1 responsibility to your communities is safety.”
Cindy Zukker, a 33rd Ward resident, shared her discussion group’s enthusiasm for funding mental health and other social services. The aldermen will need help, though, she noted.
“We agree that we need more progressive sources of revenue, but what’s it going to take to get that through?” Zucker said. “We need to support our aldermen fighting for these things.”
Lightfoot Pushes Uber, Restaurant Taxes
The town hall opened with an overview of the 2020 budget proposal that Chicago’s new mayor, Lori Lightfoot, shared in October. After taking office in May, Lightfoot faced the epic task of shoring up the city’s financial future in the face of an $838 million budget deficit. Her solutions, said UWF’s campaign director, Kate Barthelme, during a summary of the proposals at the town hall, would hit working-class people hardest.
“We see a couple of trends,” Barthelme said. “There is a heavy reliance on regressive tax – taxes that ask working families to pay a larger share … instead of the wealthy.” Those include a restaurant tax and ride-share tax, Barthelme said. The mayor’s budget also relies on short-term solutions, Barthelme added.
In her address in October, Lightfoot highlighted that her proposal would close the budget gap by increasing efficiency, making cuts and adding new revenue — without raising property taxes on working people.
David Orr, former Cook County clerk, wrote in the Sun-Times that Lightfoot’s budget “showed the mayor’s commitment to sticking to the progressive values that she ran on, like a path to $15 minimum wage.”
Lightfoot’s proposed tax on ride-hailing services, like Uber and Lyft, would bring in $47 million, while her increased tax on restaurant sales would garner $37.2 million, Barthelme said. The mayor also estimated the city can get $163 million from federal reimbursements for ambulance rides.
The mayor’s budget additionally draws on a $300 million surplus from the Tax Increment Financing (TIF) program. (TIF sets aside some property tax revenue for use within particular districts, but the city can designate some of those funds as a surplus for use in the city budget as a whole.) Lightfoot’s proposal expects another $23 million from “other sources,” including cannabis taxes; $200 million from refinancing of existing debt; and $7 million from new parking meters.
Lightfoot had additionally predicted $50 million from a new fee on sales of real estate (the real estate transfer tax), but that depends on approval from the state, which she was unable to obtain this year. (The mayor’s Plan B, then, may involve property tax increases, after all.)
Taxing Companies, Funding Mental Health
Though the aldermen criticized the mayor’s “regressive” revenue approaches, they did not propose replacing Lightfoot’s mechanisms with their own. Instead, they aimed to bring in additional revenue to fund progressive policies and avoid future property tax increases.
“That $800 million [gap] has been closed with the budget that the mayor has put forward,” Rosa said. “What we’re advocating for is revenue on top of that.”
Rodriguez, Rosa and other progressive aldermen aim to add four main sources of progressive revenue: a “head tax” on large companies, an expanded TIF surplus, fees for tax-exempt universities and hospitals, and the aldermen’s own real-estate transfer tax proposal.
Reinstating the so-called “corporate head tax,” phased out by former Mayor Rahm Emanuel, would charge $35 per employee per month for every company with 50 or more employees under the aldermen’s proposal. Bringing in an estimated $100 million yearly, that tax would reopen mental health clinics and help the city meet pension payments.
The aldermen said the mayor’s TIF surplusing could be more aggressive, bringing in $400 million instead of $300 million. That could mean $80 million to the city and almost $210 million for schools, among other uses, they said. And the proposed PILOT (Payment in Lieu of Taxes) program would charge fees to universities and hospitals that own large plots of real estate, thanks to endowments, but pay no property taxes.
Finally, the aldermen’s proposed version of the real-estate transfer tax would add a 4% charge to real estate sales of over $10 million, putting those funds toward homelessness-prevention services and affordable housing, Rodriguez said.
Increased progressive revenue could also fund after-school programs, affordable housing and pressing issues like removing lead in the water. Rodriquez emphasized the importance of funding social services to address violence in Chicago’s neighborhoods.
“Study after study after study shows that what actually prevents violence is having good jobs, social services,” after-school programming and mentoring, she said. “This is exactly why we want to bring more revenue.”
Wages, Tips And Next Steps
The progressive aldermen are also pushing to (gradually) eliminate the sub-minimum wage, whereby restaurant workers who get tips can be paid as low as $6.40 per hour. Lightfoot’s budget calls for increasing the minimum wage to $15, but excludes tipped workers.
Under the aldermen’s proposal, everyone would eventually make at least $15 an hour, with tips on top of that, Rosa said.
UWF has two more budget town halls planned in coming weeks (the fourth one also occurred Thursday, in Little Village).
In the meantime, the aldermen encouraged attendees to enter public comments for the next council session by 9 a.m. Nov. 18 and to call or email the mayor’s office at [email protected] or 312-744-3300.
Featured photo: Michael Dhar