News and Commentary

Chicago Faces Record $1.2 Billion Budget Shortfall Following ‘Catastrophic’ Economic Collapse, Riots, And Violence
Lori Lightfoot, alcaldesa de Chicago, en conferencia de prensa el lunes 15 de junio de 2020. (Jose M. Osorio/Chicago Tribune/Tribune News Service via Getty Images)
Jose M. Osorio/Chicago Tribune/Tribune News Service via Getty Images

Chicago’s mayor, Lori Lightfoot, announced Tuesday that the city is facing a historic $1.2 billion budget shortfall for the fiscal year 2021, following what the mayor called a “catastrophic” economic collapse caused by the coronavirus pandemic and by widespread rioting and looting that did an estimated $60 million in physical damage to the city’s downtown and untold damage to its tourism industry.

“Saying Chicago faces ‘a crisis unlike anything we have experienced in our lifetimes,’ Mayor Lori Lightfoot painted a grave financial picture for the city on Monday, detailing a projected $1.2 billion budget shortfall in the 2021 fiscal year,” Chicago’s public broadcasting station, WTTW reported.

“On top of that colossal shortfall, the city’s financial picture worsened significantly during the past three months because of an ‘economic catastrophe caused by the coronavirus pandemic,’” Lightfoot said according to the outlet. “The city’s budget for the current fiscal year is now $799 million in the red, she said.”

Lightfoot added that “all options are on the table,” though she refused to get into specifics. In the past, the city has proposed a computer lease tax, a streaming services tax, and a higher restaurant and entertainment tax as stopgap measures for budget shortfalls. This shortfall, though, is so unprecedented, the city is likely to consider more extreme measures, like a property tax hike.

“The reality is that life will be different for the foreseeable future, impacting how services are provided and how departments are structured, and we must adjust to meet that reality,” Lightfoot said. “Some painful choices will need to be made, including the likely necessity of personnel reductions.”

Lightfoot is also pressing for a federal bailout for Chicago and, on a larger scale, Illinois, as part of the fourth coronavirus relief package being discussed now in Congress. Democrats passed bailouts for cities and states impacted by COVID-19-related shutdowns and did not specify that the economic damage being addressed had to be the direct result of the pandemic. Republicans, however, have said there will be no bailout for cities and states — especially those like Chicago and Illinois, whose budget woes long predate coronavirus.

Chicago did get an estimated  $470 million in federal funding from the third, bipartisan coronavirus relief bill, the CARES Act, passed back in early May.

The mayor is likely addressing the city’s budget woes now because information came to light, late last week, indicating that Chicago’s city government, which had pledged $10 million in grants to help address damage to private business from the two looting campaigns in June and August, doled out just over $200,000 to help city residents rebuild, per the Chicago Tribune.

Damages from just August’s riots and looting are estimated at around $60 million, and that’s without considering economic losses. Several major retail chains, including Macy’s, which anchors the city’s “Magnificent Mile” shopping district, are now considering dropping their leases and moving their flagship stores outside of the city.

The coronavirus pandemic, the Chicago Sun-Times reports, likely cost the city “in excess of $500 million.”

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The Daily Wire   >  Read   >  Chicago Faces Record $1.2 Billion Budget Shortfall Following ‘Catastrophic’ Economic Collapse, Riots, And Violence