>>> IT IS A TOUGH ROAD AHEAD WHEN IT COMES TO GETTING THE CITY'S FINANCES IN ORDER.

THE CIVIC FEDERATION , A WATCHDOG GROUP, HAS A NEW REPORT LAYING OUT OPTIONS AND RECOMMENDATIONS FOR CITY OFFICIALS TO ADDRESS THOSE CHALLENGES AND SOME OF THOSE CHALLENGES INCLUDE RECOVERING FROM THE COVID-19 PANDEMIC AND THE END OF FEDERAL RECOVERY FUNDS.

A CHRONICALLY HIGH LIABILITY BURDEN, SHORTFALL, AND STRUCTURAL DEFICIT JOINING US TO TALK ABOUT ALL OF THESE AND POTENTIAL SOLUTIONS IS SARAH WHITMORE, ACTING PRESIDENT OF THIS CIVIC FOUNDATION.

SARAH HAS PUT OUT BUDGET FOUNDATIONS.

WELCOME TO CHICAGO TONIGHT.

HOW BIG IS THE YEAR TO YEAR STRUCTURAL DEFICIT THAT THE CITY FACES?

>> WE ARE TALKING ABOUT A CHRONIC MISMATCH BETWEEN ONGOING REVENUE AND EXPENDITURES .

THE CITY HAD MADE PROGRESS ON THIS.

HAS BEEN A LONG-TERM ISSUE BUT IT HAS MADE PROGRESS SINCE THE WORST OF THE PANDEMIC THROUGH RESCUE PLAN ACT FUNDING AND RESOURCES RECOVERED FROM THE PANDEMIC .

WHAT WE ARE SEEING IS A SMALLER STRUCTURAL DEFICIT BUT ONE THAT WILL BE IMPACTED IN THE COMING YEARS BY, FOR EXAMPLE, A SOFTENING IN STATE REVENUES .

THAT COULD INCREASE THE STRUCTURAL DEFICIT .

WE ARE SEEING A POTENTIAL FOR A RECESSION, ALL OF WHICH WOULD IMPACT WHAT THE JOHNSON ADMINISTRATION NEEDS TO DO .

>> BY THE END OF THAT IS FEDERAL COVID FUNDING AS WELL.

WE HAVE TALKED ABOUT THIS FOR YEARS AND YEARS.

COLLECTIVELY THEY ARE 24% FUNDED.

WHAT DOES THAT MEAN TO THE AVERAGE TAXPAYER?

>> AGAIN, THE PROGRESS THE CITY HAS MADE IS IN TERMS OF MAKING A LARGER CONTRIBUTION ACCORDING TO NEED.

ON THE FUNDING PROJECTION TO GET TO 90% FUNDED EVENTUALLY .

HOWEVER, IN ORDER TO MAKE THOSE CONTRIBUTIONS THIS YEAR, THAT TAKES 20% OF THE CITY BUDGET.

THOSE ARE FUNDS THAT CANNOT BE SPENT ON OTHER PRIORITIES.

YOU CAN SEE A PERSON ON THE STREET CROWDING OUT OTHER KINDS OF FUNDING.

>> 20% ON DEBT AND DEBT SERVICE.

THAT IS 40% OF THE BUDGET THAT TAXPAYERS WILL NOT RELEASE ANY TANGIBLE IMPACT FROM.

YOUR REPORT TALKS ABOUT DIFFERENT REVENUE OPTIONS, MANY OF WHICH THE MAYOR HAS BROUGHT UP LIKE CORPORATE HEAD TAX , TRANSACTION TAX.

WHAT ARE THE PLUSES AND MINUSES OF SOME OF THESE OPTIONS?

>> WHAT WE'RE TRYING TO DO IS PROVIDE A ONE-STOP SHOP FOR THE NEW MAYOR, THE NEW MEMBERS OF THE CITY COUNCIL WHEN THEY ARE LOOKING AT THE OPTIONS THAT THEY HAVE IN ORDER TO CLOSE THAT STRUCTURAL DEFICIT GOING FORWARD.

WHAT WE ARE LOOKING TO DO IS PROVIDE INFORMATION ON HOW THESE REVENUES GET IMPLEMENTED.

CAN THE CITY DO IT ITSELF?

WILL IT REQUIRE STATE STATUTE?

LOOKING AT THE PROS AND CONS, THERE IS CONTEXT PEOPLE NEED TO KNOW.

YOU KNOW, TO IMPLEMENT A CITY INCOME TAX , YOU KNOW, THAT WE NEED TO BE PASSED AT THE STATE LEVEL AND THERE WOULD NEED TO BE CONSIDERATIONS AS TO HOW THAT WOULD FIT IN WITH THE REST OF THE INCOME TAX OF THE STATE AND FEDERAL LEVEL.

>> THESE ARE HEAVY LIFT EVEN WITH A DEMOCRATIC MAJORITY AND DEMOCRATIC GOVERNOR.

MANY OF THESE TAXES YOU WOULD HAVE TO GET APPROVAL FROM SPRINGFIELD .

HE HAS PLEDGED NO PROPERTY TAX HIKES .

DO YOU BELIEVE THAT YOU CAN HELP SOLVE THIS STRUCTURAL DEFICIT WITHOUT RAISING PROPERTY TAXES?

>> IT IS IMPORTANT TO THINK OF PROPERTY TAXES IN THE CONTEXT OF , YOU KNOW, HOW THEY FIT INTO THE REST OF THE CITY TAX.

THEY ARE AN IMPORTANT SOURCE OF REVENUE BECAUSE THEY ARE RELIABLE.

THEY COME IN YEAR IN AND YEAR OUT AT THE SAME LEVEL AND ARE NOT TIED TO THE ECONOMIC TRAJECTORY, BUT THEY ARE VERY VISIBLE.

THEY ARE BILLED TWICE A YEAR AND PEOPLE ARE TUNED INTO HOW MUCH THEIR PROPERTY TAX IS GOING TO BE, SO IT IS IMPORTANT FOR THE MAYOR AND CITY COUNCIL TO LOOK AT THE FULL PLAN FOR WHAT THEY ARE DOING GOING FORWARD AND THE PROPERTY TAX COULD BE PART OF THAT, BUT IT IS NOT GOING TO BE SO THEY WILL NEED TO FIND OTHER OPTIONS.

>> SOME THINGS YOU ARE PROMOTING, HAVING THE SIZE OF THE COUNCIL CHANGE.

WHY ARE THESE RECOMMENDATIONS MOVING FORWARD?

>> ANOTHER PART OF THE REPORT IS TO LINK TOGETHER RECOMMENDATIONS THAT THE CIVIC CENTER AND OTHER ORGANIZATIONS HAVE MADE OVER DECADES TO IMPROVE THE STRUCTURE OF THE CITY AND FOR PLACES THAT ARE A BIT OF AN OUTLIER, THE CITY COUNCIL IS EXTREMELY MUCH LARGER THAN THE OTHER LARGE CITIES IN THE UNITED STATES.

50 ELDER PERSONS HERE.

FOR THE REST OF THE CITY, AN AVERAGE OF 18.

IT STANDS TO REASON THAT IF OTHER CITIES CANNOT BRAVE A SMALLER CITY COUNCIL, SO CAN