Order and procedure rule 49 the Sergeant at Arms sets forth
the following rules of conduct to be followed during the
public comment period and the duration of all committee and
City Council meetings profane vulgar threatening abusive or
disruptive language is not permitted demeaning
discriminatory or harassing behavior and speech directed
towards others is not permitted disruptive behavior,
including disruptive or disrespectful conduct during others
presentations is not permitted banners flyers or signage
are not
permitted backpacks large bags and sharp objects are not
permitted clear bags not tinted in color that do not exceed
12 by 12 by 6 in will be permitted and are subject to
search L food and beverages including in metal canisters
are not permitted cell phones must be placed on silent
prior to entering the meeting room individuals must remain
seated public comment speakers are permitted to stand only
when providing public comment small handheld devices may be
used only while seated in the user must refrain from
interfering with the view or hearing of other individuals
individuals or groups failing to adhere to these rules will
be asked to see such disruptive conduct and failure to
comply will result in their being subject to removal from
the meeting by the Sergeant at Arms.
The city of Chicago city council rules of conduct for
public meetings to 2023 to 20227 pursuant to the Chicago
city council Rules of Order and procedure rule 49. The
Sergeant at Arms sets forth the following rules of conduct
to be followed during the public comment period and the
duration of all committee and City Council meetings profane
vulgar threatening abusive or disruptive language is not
permitted demeaning discriminatory or harassing behavior
and speech directed towards others is not permitted
disruptive behavior, including disruptive or disrespectful
conduct during others presentations is not permitted
banners Flyers.
Or signage are not permitted backpacks large bags and sharp
objects are not permitted clear bags not tinted in color
that do not exceed 12 by 12 by 6 in will be permitted and
are subject to search L food and beverages including in
metal canisters are not permitted cell phones must be
placed on silent prior to entering the meeting room
individuals must remain seated public comment speakers are
permitted to stand only when providing public comment small
handheld devices may be used only while seated and the user
must refrain from interfering with the view or hearing of
other individuals individuals or groups failing to adhere
to these rules will be asked to see such disruptive conduct
and failure to comply will result in their being subject to
removal from the meeting by the Sergeant at Arms.
The city of Chicago city council rules of conduct for public
meetings 2023 to 2027 pursuant to the Chicago city council
Rules of Order and procedure rule 49. The Sergeant at Arms
sets forth the following rules of conduct to be followed
followed during the public comment period and the duration
of all committee and City Council meetings profane vulgar
threatening abusive or dis.
corruptive language is not permitted demeaning
discriminatory or harassing behavior and speech directed
towards others is not permitted disruptive behavior,
including disruptive or disrespectful conduct during others
presentations is not permitted banners flyers or signage
are not permitted backpacks large bags and sharp objects
are not permitted clear bags not tinted in color that do
not exceed 12 by 12 by 6 in will be permitted and are
subject to search L food and beverages including in metal
canisters are not permitted cell phones must be placed on
silent prior to entering the meeting room individuals must
remain seated public comment speakers are permitted to
stand only when providing public comment small handheld
devices may be used only while seated and the user must
refrain from interfering with the view or hearing of other
individuals individuals or groups failing to adhere to
these rules will be asked to see such disruptive conduct
and failure to comply will result in their being subject to
removal from the meeting by the Sergeant at Arms
Good afternoon, everyone.
Um at this time, we're getting ready to start our
subcommittee. Uh, or revenue is hereby call to order and so
at this time the subject matter hearing that we are here to
discuss is simply 3 things number 1 where our city
generates its Revenue, uh, what are some fiscal adjustments
needed to maintain a path for fiscal sovereignty and lastly
what are some Pathways for new Revenue? So this is uh, the
subcommittee's first Revenue meeting. Uh, and so there will
be no votes taken at this time on this matter. We will now
have a roll call to establish.
establish a quorum and at this time all the woman chairwoman
as well Vice chair, uh de
alderman laspada
alderwoman Harris
alderwoman Ramirez
or the woman tailor
Alderman Mosley
or the woman Rodriguez
Alderman CEO Lopez
Alderman Bernett
almond
I don't mean Rodriguez Sanchez.
Alderman Conway
Alderman Ramirez Rosa
Alderman Vasquez
alderman kiten
Alderman Martin
There are 9 members present. We have a quorum.
At this time all there are some all districts who requested
to attend virtually. Uh, all the women Harris Taylor Mosley
Irvin ultimate Moore who is the number but also Alderman
Martin Alderman Garner, who's the number in Alderman
Ramirez Rose says have requested to participate remotely
under provisions of rule 49. Can I get a motion to allow
them to?
Into indeed thank you so much for that at this time.
Again, we want to recognize our non-members at this time
who are present with us. Today we have with us Lena
hoppenworth who is with us as well and Alderman Hopkins,
right? I mean not Alderman Hopkins
ought to be Riley for the 42nd War all those in favor of
saying all those in favor, uh for allowing them to
participate. Please proceed by saying, uh, I
Independent of the chair of the eyes have it and so at this
time, um, we will now have our public comments for those of
you who have signed up. Uh, we have with us today, uh, Mr.
George, Blakemore,
Only no vote will be taken but the vote is out.
At all of y'all to get out.
I I I was just Paul man. I'm I'm speaking right now and
these 2 ultimates are speaking to each other.
You have no respect for your position.
And I was banning at the door. Let me let me you locked the
council you like the people out. This is our office.
Never do that again.
Never and dealing with Finance millions and millions of
dollars are being spent on illegal immigrants not even.
Citizens now the same thing Mr. Hall Robin Hall your
Revenue now you call me to speak now. Do you want to hear
me or do you want to hear him? I want to hear you Mr. All
right. Thank you honorable.
Thank you.
I couldn't believe it I bam back the door.
Open this door. You don't like the people out. This is the
people.
Change not the ultimate you getting them mixed up. You are
here.
to serve you
But you know why you can get away with it because of poor
participation of people in your War. This is a machine all
Democrats. It's worse than coming this time. All you all do
is 69 each other time is out.
The people are waking up.
It's something evil here. It's something unamerican here.
But all of you are so called 1 party, you know when you
have a 1 party that means a dictatorship by travel like
Russia. No northern co this is not a democracy here.
All the the same, you know with 6 to 9 me. Uhuh. You do me
I do you it's corrupt. This is why the most racist and
corrupt city in America is the city of Chicago. What is
your criteria? How many of the elected officials been
indicted for corruption how many a 61? All right. What
about Walter Bernette are indicted criminal 2, but he can
still serve all of them are criminals all of them. The
black ones the white ones the Hispanic the Asian all of
them every 1 of them. The system is broken. Come by here
Trump.
On our way to Freedom land for the black people. We are
being gentrified out of the city, but with Finance from the
government the local government the County government the
federal government they have
thank you.
Thank you, Mr. Blake Moore at this time.
At this time we will have uh, Romero Hernandez.
Good afternoon, chairman Hall Vice chair dowel and members
of the revenue subcommittee. My name is Romero Hernandez
director of government relations and public policy for the
Chicago land Chamber of Commerce. I am here to share the
chambers perspective on the subject matter hearing that
deals with 1 of the most consequential questions facing
governments in every city county and state across the
country that being revenues and the post-pandemic economy.
The chamber proudly represents over a thousand member
businesses across the city of Chicago and surrounding
suburbs of every size sector and Industry employers and
Working Families alike are closely following the
developments around the growing budget pressures facing
local governments, given many of these discussions are
inevitably devolving into calls for new or expanded taxes
on businesses and residents.
It is with this in mind that the chamber urges the members
of this body to prior to considering any new or increased
taxes explore any and all opportunities to reduce budgetary
spending lines.
identify administrative efficiencies and lastly Advanced
policies that promote natural economic growth
as the mayor's budget team earlier this month revealed to
members of the budget committee federal arpa funds provided
the city and its sister agencies a Lifeline to utilize
Revenue replacement funds to make up for pandemic related
loss of Revenue. However, many of these funds were also
used to stand up several new programs as the administration
and city council worked to balance this upcoming fy2 budget
and subsequent budgets. We hope that many of these are put
back programs be truly analyzed and evaluated to see what
works and what does not it is the least that can be done
for taxpayers across the city with over 2 billion dollars
in fiscal cliffs expected by mass transit public schools
and other government agencies. It is easy to look at this
significant problem and seek a simple solution new Revenue.
However to the small business small businesses continuing
to struggle in every Ward across the city to the Working
Families that continue to struggle to make ends meet and
deal with the high costs of inflation.
Going, uh going with the simple solution to work our way out
of these physical challenges is unacceptable. We also
cannot lose sight of the economic development impacts. We
are an intense National and Global competition for jobs and
investment while Chicago is winning in some areas other
competing cities are winning far more projects and have far
more cranes in the air which are key drivers of economic
growth.
How will more taxes on top of an already heavy tax burden
attract more economic activity jobs and cranes.
Businesses and residents throughout the city deserve to be
given a holistic plan that considers all possible solutions
including the more difficult solutions that focus on
spending reductions efficiencies and natural economic
growth rather than owners and job killing taxes such as the
head tax conjunction tax city income tax sales taxes on
services and increased property taxes any plan that
considers new or increased taxes must give real
consideration to spending reductions in taxpayer relief,
the chamber stands ready and willing to work with city
council and administration as these Revenue discussions
continue to take place. Thank you.
Thank you at this time the chair recognizes Jessica
Jackson.
Okay.
So we talking about money today, right?
And why people need money or the city need money and stuff
like that, right?
So
seeing this how City Hall and the city is having a hard
time wrapping their head and their brain around the fact
that black people communities need our money. I decided
today that maybe I would bring a visual aid to help you all
understand that we deserve our money now for all the white
people Hispanic people. What's that Conway? Kindly
Uhuh. Who's probably Rich ultimate kindly who's probably
Rich because of things like this. Let me help you out with
the science what this says? Okay. It says Negroes for sale.
By public auction on Thursday at 10:00 a.m. The 12th of
April 1848.
crime and healthy at oddono's auction house
second cucumber Land Street, Charleston, South Carolina.
We're looking for 25 field hands trained at home chopping
thrashing bail and plowing peaceful. No troublemakers
strong can work in the heat all day long 10 boys being
taught to drive wagons and fetch.
Wick learners
18 women
8 with Future Insurance all house trained clean cooking
iron making beds 6 girls.
comely
Wyatt
butting out
and Headstrong
manageable
1 female Superior cook and excellent seamstress also for
sale at 1:00.
Plow horses cows Halls 1 Prime bull fed, 5 heads of goats
and 2 wagons that was in 1848 then if that weren't enough
81 years later. Here's the Jim Crow sign while we were
working in America and paying taxes.
We couldn't even go through the same bathroom. Look at fast
Quest. Look at Riley. See they ain't bothered about it cuz
they gonna get paid. Anyway, that's 81 years 19 in 1929,
then fast forward all the way to 1964 when we finally came
out of Jim Crow, then let's fast forward 20 years after
that where they put induced. Our communities will crack in
the AIDS epidemic and you still want to find money for
everybody but us.
y'all look disgrace you want to keep spots fire and crying
silent in your neighborhood while you sit here and try to
act like your neighborhood is all good and
Thank you at this time. We will recognize uh next uh, Zoe
Lee.
So I uh came here yesterday and I asked the non-black
alderman to please um, see if they can go to the Deputy
Commissioner, uh building departments. Uh, Grant you're all
whatever name is why Rich? Um, Marlene Hopkins Building
Commissioner. Um, Maurice Robinson Jason Lee Kim Roberts.
And again, I want them.
to ask
why did they think the city of Chicago owned my building?
that
we my family's had the deed since 1972. I just want I so I
I still need that but I I feel like I know why I feel like
I know why you know, my mother has a degree in marketing
and finance, right and my mother know in 2017 tax cuts and
job acts signed in law by former president Donald Trump
created opportunity zones.
This program provides tax incentives for investments in
designated low Comm areas allowing investors to defer taxes
and receive a tax advantage if they hold their Investments
for at least 10 years. These benefits can attract Rich
developers to support policies that maintain or expand such
incentives.
My building was demolished unlawfully demolished 2017 in
Opportunity Zone with the tiff with the Tif money too.
Right the the money that my mother was asking because she
has a nonprofit and we had a building so she
could fix the community up. That was the whole purpose. I I
know y'all hate Trump and all that but we gonna take the
emotions out. That was the whole purpose of trump doing
that to help our communities get what it needed. But
instead.
the majority of the Alderman's black aldermans sold our
properties and our land to these millionaire and
billionaire developers knowing that they don't have to pay
no taxes to 2036 and if he gets back in office.
He won't and you'll be able they won't be paying taxes
until 2056 that was supposed to be for us for our
communities to help our communities. So when people say
what has Trump did for black people the opportunity zones.
that these rich
developers are taking our properties and land and giving it
to these and these ornaments y'all y'all Ottomans. Y'all
are pay y'all are getting all these Kickbacks for it and I
watch all this Tif money y'all talk about these opportunity
zones. It's y'all but you want to talk about taxing go get
these undocumented families off of each, um corner and tax
them the stolen goods coming from Basics that they selling
on the corner tax them.
Thank you at this time. We will recognize Tessa Murray.
Good afternoon, um chairman Hall Vice chair dowel and
members of the subcommittee. My name is Tessa Murray. I
work for friends of the I work for friends of the Chicago
River and on behalf of friends of Chicago River. Our staff
are boarded in 41,000 members. We understand that there
will be a discussion to propose bringing digital
advertising to the Chicago Riverwalk and public parks, and
we sincerely oppose this proposal.
Our beautiful parks in Riverfront are sanctuaries and
breastfed away from urban life including the delu
advertising clutter communities across the city work too
hard to make our parks and Riverfront free of litter. So
let's not literate with digital advertising.
which will also contribute to um light pollution if it's
digital which is a threat to birds who use the river for
nesting resting as and as a migratory Flyway, there's an
economic benefit to preserving these values of the river
that we hope will be considered as you assess how much the
revenue of these advertisements would actually create.
Thank you.
Thank you at this time the chair recognizes Pat door.
Good afternoon, chairman Hall members of the committee and
Mr. Blakemore, uh, I'm here on behalf of the hospitality
Business Association of Chicago about this Revenue hearing
and we'll speak briefly. Uh,
There were several Topline items on recent news coverage
including alcohol and Hospitality tax increases. I would
simply remind and I'm happy to discuss offline how we are
already some of the highest beverage alcohol beer wine
spirits and hotel and meal taxes in the entire country.
raising those further will only impair the recovery of our
hospitality industry, which still as of last month is not
back to our employment that we had for all of Chicago.
And februari of 2020. Um, I realized those are often
tempting sources of revenue and would encourage you to look
carefully before pursuing them. And again, we are always
available to walk you through the numbers.
We are the most heavily taxed Hospitality city in the
country.
um in addition a lot of our employers the small businesses
in the reward are struggling with new property tax
assessments and I have contractually obligated to mention
trying to onboard the paid sick leave and paid leave
program begins in 7 days after only just being provided the
final bacp resources lot on our plates more taxes are not
something we can digest easily.
1 of your former colleagues used to tell me that it's not
my job to tell you how to solve your problems is to protect
my members, but I always thought that was kind of
intellectually disingenuous. So I would like today to
suggest that you need to take a strong Look at video gaming
and video gambling machines in the city, which the state of
Illinois has allowed you.
to pursue for more than a decade
you have the casino. There are hopefully going to begin
construction next month. In the meantime. This city has
left tens of millions of dollars on the table.
by not allowing it inside the city the city of Springfield
a fraction of our size is making over 2 million dollars a
year in direct City revenue from video gaming now, we have
the casino complication but in my reading and in Consulting
with other people in this space, the casino benefits
agreement does not mean that it stops. It means we look at
their benefit payment to the city.
The cost of that payment is probably less than you will
raise from video poker in 6 months.
Even if this body wants to move slowly and legalizing video
poker you gave when you approved the casino balls the right
to operate those machines at your airports. They still
aren't there. That's the easiest lowest hanging fruit as
chairman Hall said in his interview out there. You need to
encourage your Casino vendor to either put those machines
out there to generate revenue for the expensive job
creating O'Hare expansion.
Or you have to encourage them to find a partner who can do
it for them. That is the easiest money you're going to hear
about today is video gambling machines at the airports. I
hope you pursue it seriously because we're already paying
11% of my members Revenue to the city. We can't go much
higher and we can't go higher at all.
Thank you at this time. We recognize uh, Fred cash.
Good morning, brother chairman and city council officials.
I've been in this city for 54 years been disabled all my
life since birth.
it bothers me because now
there's not enough money for a housing for people with
disabilities.
You know and and and you know, the tax dollars need to be
here.
And not going out the door.
charity starts at home
Then it spreads abroad.
I never seen so much money. Go for other groups.
Except for the ones that live here.
You know and election time is coming.
I'm not I'm not downgrading nobody because it's enough
money here for everybody. But make the playing field equal
for everyone.
You know, that's not enough housing for people with
disabilities my uh health insurance just got cut.
And they just reinstalling. It's too much red cape.
For me to try to get Services continued service.
These cities in these neighborhoods are are shamble.
And you alderman?
I respect a lot of you but you need to pay more attention
to your constituents.
When I try to make phone calls, I don't get an answer
coming back.
I don't appreciate that, but I'm going on anyway.
And God's name.
God is looking.
God is paying attention.
Put the money where it needs to be here in this city.
For the people that live here.
I've been in these chambers before.
And I'm going to keep on fighting.
For people with disabilities we broke barriers.
When in federal laws to get passed and you guys ignoring
them, and I don't appreciate it, but I'm gonna fight till
the day I die.
They will start getting respect as disabled people.
that we need
housing
Better Health Care
if you could take care of immigration and I'm not racist at
all. Like I said, it's enough money for everybody but
spread that money out charity starts at home and it spreads
abroad remember that God bless you.
Thank you at this time. Um, we will recognize Taiwan Sims.
um
It's amazing. So.
The last 11 days. I say I learned something significant
about this city that when it mechanized it when it chooses
to move.
In a with a intentionality and effort then anything can be
done I watch C do.
Um, what is it C dot streets and sanitations CPD all come
together in 1 area. That's 73rd Place.
That's what 1 of y'all colleagues.
David Moore was pitched to 10 and everything in regard to
the violence that's taking place in the in the Englewood,
but this is a
Representative this man was under the threat of gun and
everything, but he stood his ground.
And I felt proud I'm proud of that.
but what I seen is how the finances in this city that 16.4
billion that's behind any 1 of you all can truly be
represented in the constituents and the people
if chosen if y'all choose to use that or utilize that for
us instead of personal gain or personal instances
I realized that they came look it was seed do
streets and saying they was able to cut trees they were
able to set up speed humps. They were able to quell even
the the the violence.
It was a shooting a man was shot in the face.
But I would say after that we had Commander courts in the
street at 12 a.m. That's a commander a gold star you hardly
see those people in the street.
We had not only him we had also a a special unit and they
wasn't running around acting erratic. They wasn't running
around crazy. They were coordinated. Well coordinated the
whole effort was so coordinated that it stemmed. Well that
was was happening. So I could imagine that if that was
financed from block to block to block and Ward to Ward to
Ward if you all
We're coordinated.
And utilize the finances that the people the taxation.
Then hey man, this city will be you wouldn't get so no the
the the 73 year old that was murdered. You wouldn't hide
that situation. You wouldn't hide a 7 year old dead. You
wouldn't hide that situation for the instance of those 2
young girls that were murdered over there. You wouldn't
hide that situation. We wouldn't be dealing with what we
dealing with.
And that's a go. Look we got the what what the controlling
I know you do the numbers, but you see the numbers but
those are people
And so we see this financial we we being financially
devastated. We being uh, this budgeted 16.4 billion.
Is a budget against us I suppose and not with us.
Because I've seen in the last 11 days what can be done and
it's amazing.
To see a whole effort to see these people galvanized not us
not the constituents but these individuals we we've elected
our elects galvanized pulled together.
Thank you so much. This concludes our public comments at
this time. I would like to recognize our non committee
members our no committee members chair purposes, uh
Mitchell from the Seventh Ward chairperson. Um Haden from
the 49th Ward. Also we wanted to recognize Alder woman's
Monique Scott from the 24th Ward and joining us with rule
59 Provisions online is Alderman Lawson as previously the
as previously stated. I apologize. This is a subject matter
hearing to discuss our City's revenue. And so today we have
with us 2 individuals who are going to share a presentation
of net Guzman who is our budget director here in the city
of Chicago and Chase wreck Winkle who is our controller.
Also joining us today in the box is Jill, uh, Jaworski our
Chief Financial Officer. Uh, Giovanni Massey. I mean MAFO
who is our Deputy budget director Elaine Herman who's our
managing, uh deputy director and last but not least
noroski. Who is our Deputy controller. So at this time,
We will now proceed with the presentation from Annette
Guzman in Chase right wing.
Thank you.
Good afternoon. And and uh, thank you Alderman hall for
inviting us to speak before you this afternoon and for
beginning the conversation around the city's Revenue
position.
Any serious conversation about new taxes or modifications to
to existing taxes should always be grounded in discussion
about the city's existing Revenue structure.
So today we will provide an overview of the city's revenue
and attempt to provide insight into how the city's diverse
Revenue structure supports the varied operations provided
by the city.
The city's Revenue resources are diverse.
Which as we will see shortly is important in mitigating
against cyclical downturns.
Today, um, we will start with um an introduction to the
city's Financial team just so everyone is clear who helps
and who stewards our financial resources.
We'll do a a broad-based overview of our revenue and a
couple of deep Dives.
And then we'll also talk about the process that OBM leads
in reviewing any new Revenue proposals or modifications to
existing Revenue.
and then we'll open it up for any questions that uh those
in city council might have
Today, we we're not here to talk about any specific new
Revenue proposals as that work is still ongoing. Um, as I
know many of you and your colleagues have uh proposed new
revenues as well. But we do want to engage in a
conversation with you as we are looking to uh, continue the
strong financial standing of the city.
Oh, perfect even better.
It doesn't work for me. Hold on 1 second.
There we go.
So the city's Financial team.
As as Alderman Hall said I'm joined today by my colleague
Chase wrinkle who is the city's controller as well as the
Chief Financial Officer Jill dorsky in the Box.
Along, uh side us making up the rounding out. The financial
team is our city treasurer Treasurer Conor's an as the
financial leads of the city. We each take um, our office
our responsibility of financial stewardship, very strongly
and very seriously.
Uh the budget office as you know, prepares and manages the
annual City budget.
We publish uh performance reports on uh our budget as we go
throughout the year. We oversee Capital Improvement
projects, and we also Implement and monitor and provide
approvals for Citywide operations.
The controller who we all love dearly. Um
Collects and disperses our city revenues operates payment
centers overseas our risk management for the city and
manages our city payroll.
Our parking enforcement and booting operations and manages
the residential disabled parking permit program.
As the Chief Financial Officer Jill dorsky is responsible
for the financial policies and strategy initiatives for the
city.
She also oversees our debt portfolio.
And is the primary representative in relationship manager
for the fam for the financial to the financial Community
for the city?
She administers public private Partnerships and Municipal
marketing programs.
And finally our esteemed Treasurer manages the city's cash
and investment portfolios.
Overseas the Chicago Catalyst fund provides Financial
Empowerment and educational and counseling to thousands
across the city.
So I'll turn it over to chase. He'll give an overview of
the city's Revenue.
Thank you, and that um, I appreciate it and appreciate
everybody in the financial Community to go through this.
We're going to be going through um revenue and kind of give
a foundation before we do a deep dive. Um, and we want to
understand and put in the context the city's Revenue versus
other kind of governmental entities. Um, how where are
those frictions in collection, um enforcement and those
things come up so you can get a better idea of uh, what is
easier to implement what is harder to implement and where
there's loss in between so we'll move forward. Oh, sorry.
So first I think it's important to
Go over, um, 4 major fund types and these are the ones that
you want to keep in mind. This is how the city funds uh for
the most part are structured. You have the corporate fund,
which is our general operating fund. That is our general.
Um component Mo, uh, basically every level of government
has some version of a General Revenue fund. Um, sometimes
that's a collection of funds. Sometimes it's a single fund
orientation for us. We have the corporate fund to do that.
We then have the Enterprise funds and you might know these
as water sewer and the 2, uh, um airports. Those are
separate Revenue functions. They have separate, um, uh, uh,
uh accounting and and um,
Expenditures related to them and are held as our Enterprise
funds separate from the corporate fund. There's interaction
between the 2 but they are are between those 2 different
types, which is important to remember that those are
separate from the corporate fund. We then have special
Revenue funds and these can cover the whole gamut pretty
much every government has a version of a special Revenue
fund and new special Revenue funds pop up all the time, uh,
an example would be um, opioid settlements and recent, uh
years going toward a special fund to address opioid use in
the city of Chicago. So those are tied from revenue source
to the actual underlying issue that's being directed.
Sometimes those are directed via a court case or a state
law or something like that and some
Sometimes we have more flexibility depending on the revenue
type and then we have Grant funds. Those are funds that
were basically acting as a pass through um from uh, Federal
sources State sources, even other local governments like
the county um, and some of our sister agencies. Um, and
those have very specific uses around them specific
accounting record requirements and have a specific purpose
from the grantor.
And I hope I don't get too nerdy here. But we're going to
talk about economic sensitivity with a revenue. Uh, and I
think this is an important conversation to have
in general, um, the higher you are up in government the
less volatile your revenue is
so the federal government's Revenue sources are less
volatile than the state government's Revenue sources in
general and the state's Revenue sources are less volatile
than the city sources.
Part of that is a function of the population. Right? So our
Revenue sources in a large capacity are dependent on our
population. The state has a larger population than we do.
So therefore they have less volatility in those pieces and
the federal government. Obviously, it's the entire United
States. So they have more of a population Beyond there, but
it's also sources and it's important to notice especially
in this area area here, um, the economic sensitivity on
those locations,
so things like income tax sales tax, um
Uh anything that's transaction related is more sensitive to
individual consumption decisions. If I'm going to buy
something an individual is making that uh decision and the
the level of their economic health is going to dictate
sometimes how that revenue is going to be collected the
harder. The economy is the less we're going to collect on
those sources because people are paying them less and for
most of the cases, uh, uh that we're going that you're
going to see the city relies heavily on those whereas the
state has more, um locked in sources, uh that that are that
are more reliable from year in and year out.
let's take a look at revenues over time and uh, you'll
notice some other Debt Service fund and Pension funds which
are kind of separate from this conversation when we're
talking about Revenue. But uh as we went over the other
fund categories, it's important to notice 1 in particular
and that is our grant funds and the grant funds, um have
expanded in recent years and that's really a function of
the pandemic. Um, these are coming from federal and state
sources and some other items. So it's important to
understand that while that grew in that those are kind of
temporary, uh allocations as we leave the pandemic period
that's going to decrease over time and will be will have to
make up for or at least account for the fact that those
grants
Grant funds are no longer part of the overall table.
also want to talk about taxing Authority in general because
sometimes when we're talking about Revenue, there's things
that this body can do there's things that we can do
individually as an executive group. And then there's things
that were reliant on other pieces. The state has tax story
limit has its own, uh Authority and it imposes taxes, uh,
distributed to its local jurisdictions. It has uh,
basically cities are a creature of the state. So the
states, uh, statutes govern in a lot of ways what we can
and cannot tax the city has home rule Authority which
allows us to uh, because of our size, um allows us to
implement individual ordinances that that can collect
certain taxes, but they're only as our um enumerated within
State Statute. So we're a little bit reliant on making sure
that we are playing by the rules that the state has set out
for us for our home rule and then there are some taxing
issues that are a mixture sales tax is a good look at
This where there's different components throughout the state
local that are collecting those individual components.
You can look here is kind of a a breakdown, um of the
taxing authorities and and you'll notice that there's a
heavy amount here that is that is going to be reliant on
state funds or some sort of mixture of both.
excellent
so um and lastly and then I'll I'll pass it over to Annette
here here is some examples on the toxic Authority so you
can get an idea of of where our restrictions lie.
So 1 that has been brought up a lot is a cities, uh portion
of the individual state income tax. Um, when that was
initially passed, um, there was a a a portion that was
dedicated through What's called the local government
distributive fund, um where 10% of that was going to go to
the municipalities not just Chicago, but all the
municipalities in the city.
Over time that has changed um, uh somewhat, uh to deal with
specific state budget issues. So that is a lower amount uh
than it than it currently is. So even though that's the
city's portion. It's dictated by State Statute and state
rules.
Then we have things like the checkout bag fee. That's
something that's enumerated within our home rule Authority.
And we Levy that um and as you can see here, um our
breakdown between this because there's a a concession for
the localities to be able to implement a component of that.
We receive 5 cents of the 7 cents and then 2 cents goes
back to the um the retail group and I'm happy to talk about
that in a question, uh, um, uh of uh to help them Implement
that process and again that is something that has happened
in the past with local taxes and we can talk about
questions related to that and then we have a 2 like I said
before sales tax as you can see has a multiple breakdown
between multiple taxation bodies. I'll pass it back to
Annette.
Thank you. So just to dig a little bit deeper, um into some
of these revenues so as you know, we are 1 of several
taxing, uh jurisdictions in the Cook County area. Um, and I
think a lot of people often think that the property tax is
that we collect go into our corporate Fund. In fact, none
of our property taxes use support, um, or goes into the our
our general operating fund. Um, all of it goes to
supporting our pension obligations, uh, which are
increasing, uh, year-over-year as well as our debt service
obligations. So the the payments that we make and repayment
of our bonds that we issue.
And this just gives you a breakdown of how much of our uh,
um property taxes currently go to pensions just about 80%
of that and about 20% of that goes to Debt Service. Now, I
also have to to note something else. Uh, because we're
going to talk about the corporate Fund in a second. Um, our
property taxes. Don't pay for our all of our obligations on
our debt service or our pensions. Currently. We do use a
portion of our corporate fund Revenue to also support both
of those obligations.
Which you'll see here. So this is a breakdown of our FY
2024 corporate fund Revenue detail, um, 39% of our um, uh
corporate fund Revenue comes from our local taxing
Authority what Chase just talked about, uh, whether that's
through transaction taxes such as our real estate transfer
tax, um, our transportation taxes, um, which is ground
transportation or ride share. Um, Recreation taxes are
quote unquote Amusement taxes, and so forth, uh, second
largest component of our corporate fund revenue is our
local non-tax, um Revenue which includes things like
internal Service, uh earnings, um charges for service our
licenses permits and certifications and our fine and fees.
Um, next is our IGA or our intergovernmental Revenue which
makes up about 15 to 16% Um, both of these come from the
state, um or largely come from the state. Uh, the first is
the personal property replacement tax. Um, and the second
is the state income tax that that uh, Chase just mentioned
and then the the the smaller categories include the
proceeds and transfers in as well as our prior year
available resources, which are um fund balance as well as
other um, uh amounts that come in to support the
obligations, um our annual obligations,
When you look at that as a breakdown, you can see uh, a
couple things that are have happened over the last several
years. Um, again, 39% comes from our own taxing Authority,
um that goes into our corporate fund and we've seen Trends
occur over the last, uh, 10 years. We've seen the annual
growth of our personal property lease tax, um, increase
over the last 10 years by about 17% and and that's because
of shifts in consumer Behavior.
Um, we've seen uh ground transportation go up about 36%
largely as more ride share companies have come into the
market and um, you see more and more people availing
themselves of that mode of transportation.
um in addition, um, the annual average growth rate of our
Amusement taxes has increased by 10% over the last 10
years. And uh, we have seen this area grow, especially
post-pandemic, um as we've seen recovery in that industry.
Uh, I like to say some honorable mentions, uh, haven't
grown as uh as quickly but our our growth, uh opportunities
for us include things like the emergency transportation
services are our gemt Revenue which comes from collected,
uh by the state and and uh remitted to us, uh for this
ambulatory services that the the city provides
um state income as well as our personal property
replacement tax over the last, uh, several years is also um
increased especially during the pandemic as we've seen, uh
corporations, um, uh have um, uh, uh higher performance.
Looking at our Revenue over time, you'll see a couple of
Trends. Um, uh, we were pretty steadily um, uh, uh
increasing our revenues year-over-year, um, and then the
pandemic happened while we saw some um, uh, uh, uh downturn
in our or immediate downturn in our Revenue in the midst of
the pandemic the overwhelming amount of Federal Aid that
came out during that time actually increased our Revenue
pretty significantly. Um, and that's because we used a
number of Grant resources to help subsidize and support our
operating costs.
while our revenues um recovered from the pandemic
um as we have forecasted in our uh, um, annual forecasts,
we do see as those Co 19 dollars start to expire and
exhaust, um in 25 in 26 and beyond our Revenue starting to
stabilize and and and uh, go back down to um, what we have
uh, seen pre-pandemic, um, without additional, uh, Revenue
sources coming online or continued, um application and
receipt of Grant funds from the federal government and the
and the state
Uh, looking a little bit deeper at our local non-tax
Revenue. Um, as I said before that's made up of internal
service earnings licenses permits and certificates binds
forfeitures and penalties that are levied by uh, our
departments as well as charges for services. This makes up
about 29% or is the second largest category within our
corporate fund. Um, and these are uh, uh, um levied for
different reasons. Our internal service earnings are those
reimbursements, um from other City funds, uh, we as a
centralized administrative departments in the city of
Chicago provide a lot of services to the Departments that
are supported by quote unquote our special Revenue funds
and our Enterprise funds such as the airports and our
Department of Water because of that we are able to recoup,
uh, some of our costs through the revenue that is generated
in those
as well
Uh charges for services are charges that we Levy, uh to
provide services not covered by a tax. Um such as fees for
Building Inspections. Um,
The uh, provision of um information through foyer requests.
All right and our emergency transportation services.
um licenses permits and certificates are the um items that
are needed to uh, or required for the operation of certain
construction or businesses, um business activities in the
city of Chicago. And so we uh charge uh for those types of
services that we provide and then finally, uh finds
forfeitures and penalties associated with um, violations of
Municipal Code, including things like parking violations
red light, uh, violations and moving violations.
So, um, I think it's important to to know that we do have a
review process that we have established with our
departments anytime that they um want to propose a new
revenue or they want to modify an existing Revenue.
And we do this through a number of different analyses.
That's led by the budget office and in collaboration with
our Department of Law.
We have a user fee analysis as I mentioned before we do
charge for services and so 1 of the things that we want to
ensure is that our our um, the fees for that service is
keep up with the cost of providing that service. Um, we are
uh, obviously a governmental entity. So we're not in the
revenue, uh profit making business, but we want to make
sure that as costs due to inflationary pressures, um, and
just the natural growth of costs. Um, um, our uh, keeping
up with the revenue that we bring in so we do an analysis
every single year, um with our departments to understand,
uh, what um, what uh costs go into providing services and
we set our fee structure based on that.
In addition, we do have departments that um have new
Revenue proposal. Um, as well as uh tweaks that they'd like
to make to existing, uh revenues, um, because of changes in
Behavior as well as new things that come online. Um, we
have seen um, you know a number of consumer behaviors
change over time and it's important for us to always look
back at our own ordinances to ensure that we're keeping up
with um that as well and so our departments, uh, as part of
the budget process every year are invited to present
proposals to the budget office and we have a very holistic
review process that we have put in place to ensure that we
are thinking of every possible consideration before um
bringing
Forth a revenue proposal to city council for consideration.
In addition to that. We also think about the management
side of um of our departments. Uh, how can we be more
efficient in the work that we do? Um, and so we're always
evaluating, uh proposed changes to uh, the operations of
our departments, um, and looking for ways to improve the
way that they work to make it more efficient and that comes
before city council as well to the extent that we need to
change the scope, um, or the authority of any uh, certain
Department, um as provided, uh within their establishing
ordinance.
So when we look at Revenue proposals, there's a lot of uh,
policy considerations that go into them that we take into
account. Uh, what is our Authority as we've talked before
do we have the authority as a city under our home rule
authority to implement that on our own or is it another
body such as a state that is required to implement, uh,
that that tax or that um Revenue Source, um, is it
efficient can the existing rate structure be easily
amended? Um or can changes be made at a low cost. Um, or is
it going to cost us a lot in order to to raise that new
type of Revenue?
Um, is it Equitable? How does the proposed Revenue aligned
with the cost of providing that service and how are we um
how our households that are going to be impacted by that
Revenue Source. Um, and that if there are different
incomes, are they being treated equitably?
Um is it's simple is implementing a new rate structure easy
to understand and is it consistently applied across the
city?
And then finally are we being transparent in how we're
implementing our our revenues or the new Revenue that's
being proposed how has public feedback been incorporated
into the evaluation process of that Revenue proposal?
So as I said before this is all included within our annual
budgeting process and and we're about to kick that off now
and so departments will be receiving and are very familiar
with this process. Um, the documentation that they have to
provide to us in order to justify any new Revenue proposals
or modifications to existing revenues and that all again is
culminated, um to the extent that we move forward with any
of those in a revenue ordinance that comes before the uh,
uh finance committee and any management ordinances that
come before the budget committee, um in October,
we invite always um for the public as well as city council
you receive these reports from my office, but we invite you
to always um, you know, take a look we track our Revenue
performance throughout the year. Um, and ultimately all of
our revenue is audited by the comp trailers office every
year and include it within the annual comprehensive
financial report which gives you the the final uh,
Financial standing for the city at the end of every year
and so these are areas where you can these are reports
where you can learn about every single 1 of our Revenue
sources, um, how we group them within
Funds and also how we track them throughout the year.
and so with that
thank you so much, uh for your presentation at this time,
we will now open up for questions from our committee
members and noncom committee members want to recognize, uh,
vice mayor Bernett who was joined us and will be added to
the Quorum. Uh, also, we would like to recognize number,
uh, Alderman Bas and so at this time again, we would like
to take questions from those who are members and members at
the time recognized. Yeah. I I just wanted to um, I I
really appreciate the presentation. Um, uh that you both
gave a question I had for uh for the controller was um, I
saw on I think it was slide 10 how our portion of
state income tax
like the the graph on the left has gone down and I was
going to ask is that is that also been the case with the
sales tax distribution know those are separate. So, um what
it occurred in and this was under a prior Governor
Administration actually 2 Governors administrations before
it's the end of the Quinn Administration. There was a
change not in the amount of of sales tax being collected
that was remaining but the distribution to the localities
and then over the last few years that it's ticked up
slightly. Um, so that was only to the income tax code.
Yeah, so that has REM. That's roughly the same as it was to
before 2 Administration.
As far as for the for the sales tax, okay. Yeah. Yeah, the
sales tax was not a component of that change only the
income tax. That's that's all I got. Thank you, both again.
At this time, I would like to recognize Sharon would like
to recognize almond Le spot.
Thank you so much chair. I really appreciate the meeting. I
really appreciate the the earlier out we can get to this
conversation before september October.
feels
very encouraging and very useful. I I I assume to orders I
assume to the public. Um, I had 2 a couple questions, uh
question.
Number 1. Could we go back to slide number 7 for a second?
So I was
Very curious why?
We experienced it feels significant. You can tell me if
it's not significant the decrease in 2022 actuals to 2023
estimate and why we saw a recovery. If not a full recovery
going back into the 2024 budget how that
It's tough to tell like to.
To read it against these different funding sources. Could
you dig into that?
Sure. Um, so obviously between 2022 and 2023. We saw a
decline in Grant funds and that's just as we've had um, um,
you know,
talked a lot about
especially as it relates to arpa and other um arpa based
grants. Um, as those funds are spent down the grant fund is
going to continue to decrease we did see uh between um,
202022 and 2023 an increase in our Enterprise funds as
well. So you're starting to see um some uh, you know, when
you talk about why is it that we went down in 23, but we're
starting to see a little bit of recovery in 24. Um, it's
because we are seeing some of our other funds, uh growth in
some of our other funds um, and uh, you know, that'll
continue to some degree but um, especially with some of the
other grants, uh funds that are out there that we're
getting um, mostly for infrastructure work, um over the
next few years, but um, I think you know,
You're starting to see the corporate fund kind of modulate
back to where it was pre-pandemic, which is about 30% of
our um total budget. Um,
and while we'll see some increases they'll be marginal at
best because our revenues really increase by about
between 2 to 3% every single year.
Recognizing that at some combination of inappropriate
unethical illegal to Port Enterprise funds over to the
corporate fund. Can you talk a little bit about
What led to that increase in our Enterprise funds what what
allows us to what what led to that increase in the
Enterprise funds. I'm just curious.
Um between 2022 and 2023. Yeah. Um, I think it's the uh,
We I think we carried over more of our fund balance from
those Enterprise funds into um, the because our fund our
Enterprise funds also have fund balances because yes
Salvage every single year and so we've been able to carry
over because we've had some
a lot of work that we needed to do whether it's the lead
service line Replacements. Um, we have more work at O'Hare
things like that. So I've noticed I haven't particularly
looked at that with the the O'Hare and Midway funds. I have
noticed that the increasing
fund balance on the water side. That's that's interesting.
Could we go back to slide number 10?
So Chase I made a face and you knew I was going to come back
to it. Um
the checkout bag fee which I believe is still at the flat 7
Center it was
Since more since before either of us were in our current
positions.
Can you talk about the retailer portion because my
understanding is I know we're not talking about specific
pieces, but I know that the state.
Made adjustments in their budget related to retailer
portions and some of the taxes. Yeah. I'm I'm happy to talk
about this also within the context of we we've had what's
called a concession.
Um amount on other taxation as well. So for instance.
We have a a boat boat morning fee.
But that was implemented there was I think an extra Cent um
added to it.
Because before that there wasn't a requirement and um on
the retailers and then that was to help them assist in
transitioning to uh, uh a world in which they needed to
enforce that. Um, and then over time this body has decided.
Okay, we they don't they've had long enough time to
transition. We're going to remove that. So then that 1 was
removed. Um, when this was when the back tax was uh
implemented, um, it was determined that there needed to be
a transitionary, uh concession component and that's that 2
cents and that remains to the
This day so that would be um, I'm not going to Advocate
either way. Obviously that's part of this longer
discussion. But yes in the past there have been these
concession periods, um to add back to the retailer whoever
is implementing a component of that to assist with that
transition, and then this body has decided at different
points in time to remove them.
Transitionary feels like the key word there transitionary
that that's something that feels like a conversation for
the subcommittee to have.
Over the next few months. I had 1 other question if I may
ask it are there any funds that we're looking at that have
a graduated component to it for for example, like not that
this is something that we do but with utility tax, there's
folks. Uh, maybe your electric utility is in the hundreds
per month. Maybe there's entities that are in the The
Thousands per month.
Are are there.
Taxes that have a graduated component where you're paying a
certain amount for the first X number of units.
I'd hire rate above that. Is that something that exists
within our tax structures?
Um, so
this is a very long conversation. Uh, but uh, but I'm happy
to bring bring in more information in general. Um our
Our tax and our fee structures are not graduated for the
majority of the items that we have.
Part of that is because of state requirements and and state
constitutional requirements on some of those and and we've
heard those are the past years on things that have become
issues for the state that they've tried to change along
because that has historically been mostly flat, uh, based
related to Services the big 1 that is considered graduated
is not state or city at all. And that is um, our income tax
on the federal level, which is graduated. Um, and so
I think your question was are we considering items that
could be graduated or or was it there are areas in our
graduated or could have marginal?
Uh graduated structures. It's not something that we have to
dig into I was I was curious if there's any current
examples of that within our there aren't that there aren't
that many in The Upfront component. Now, this body has
passed items around repayment on fines and fees that are
income based and that would be an argument of um, post-fact
graduation because
Because because they qualify for certain breaks then they
have a a break in those periods. But those are still flat
at at different level. Um, and obviously this committee can
explore all sorts of items, but in general, um, there isn't
a lot of items within the cities basket that are graduated.
I think that that's something as we're thinking about, um,
you know review of our existing revenues, but also any new
revenues that are going to be proposed or brought forth is
to Think Through. Should it be a progressive or graduated
tax or fee? Should it be proportional? Yeah, should it be
you know, let's try to stay away from regressive. Right? So
those are kind of the the different ways that we think
about it and there are many ways to do a graduated version
of a tax. Um, so if you would like to have further research
on that, I'm sure we can bring that together. I appreciate
it. Thank you. Thank you very much cheering. Um, because I
wanted to just say something in response to Alderman
Conway, uh as Point earlier, so I just wanted to give you a
little bit of um,
Of volume or at least uh context for the difference between
the 2 numbers from what it was in 2010 to what it is in
20125. So, um, as you know, you probably know there are a
couple of um, there have been a number of legislators on
the state side who have proposed to bring this back up to
its 10% um rate, uh for local municipalities for every 5,
uh, 0.5 percentage point that we raise it.
The city would not another 30 million dollars.
I'm sorry. What was that number for every half percentage?
It was another 30 million 30 million. Okay. Thank you.
At this time to your recognized Vice chair now.
And thank you, Mr. Chairman. I just want to have a
conversation about the grant portion of our uh budget.
Are you able to break out for us? Um, what is federal
grants and what state grants? Um, I can get that to you.
All right, right and how you think about grants? Because 1
of the things uh that I hear is that um,
In previous administrations, we did not seek our fair share
of Grant dollars available at the state or that we're
leaving a lot of federal dollars on the table. And I know
that that has an impact on um, if we get a grant maybe we
have to hire staff to
Manage the Grant and all that stuff, but how do you guys
think about that and what role do the Departments play in?
um trying to
raise more grant money
I'd say I love that question. Thank you for for asking it.
Um, so I think
There's there's pros and cons to Grants. Right? Um at the
at the con level what you're looking at is a grant is a
reflection of the priority and policies of the grantor,
right? And so, um,
today if security is a big policy priority of the federal
government, there's going to be a lot of security grants
out there and you know, we can use them to help support and
we do use them to help support our infrastructure. But the
minute that becomes less of a priority at the federal
government, how does that implicit your infrastructure that
you've built around it? And that's just 1 example. Um, but
I do think as a city um, and as a third largest city in the
country, we should be getting our fair share of federal
dollars because we have um important infrastructure, but we
also play a very critical role, um in you know, uh in this
country and so my office, um, not only has built out its
Grant division, um to be a support to our departments, but
we also have a manager that is constantly, um, identifying
new Grant, uh, um, funding opportunities that both the
state and the
Federal level um, and we're doing that not only for you know
us but we're also thinking about that from a regional
perspective. Um, what are what are opportunities out there
where we can partner with CPS where we can partner with
Park District, we can partner with Cook County we can
partner with um Regional, um authorities to go after more
funding for our region, um, because a lot of these grants
look for Partnerships, uh to to to to provide those
opportunities, too. Um, and so this manager, um is
identifying those opportunities, um, uh constantly and he
works directly with departments that's meetings with
departments to talk about. How would we go about going
after this grant? What is the path forward? Who who do we
need to collaborate with internally? Um, and we are
actually doing that on a number of of Grants right now, um,
and we provide this um information, um, uh to all of our
departments. So every single Department in the city can see
what opportunities we're going after which ones we have
actually, uh been successful with and what are the lessons
learned from the ones that we weren't able to
To to receive um in the report that the city council will
get on the um from our arpa on a monthly basis. There's a
page in there that will reflect all of the grant
opportunities that we've gone after to help support. Um,
the programs that are currently funded by arpa, um, Beyond
those dollars. So we're trying to provide more of that
information to the city council and I I would just
encourage you as we go through the budget process this year
to look at ways in which the city council can be
supportive.
of those efforts, um to go downstate with you all or to
support igga or in at the state level and at the federal
level so that we can um,
Those secure some of these dollars more of these dollars.
And I I we just submitted an application to the federal
government and we worked closely. I don't with the uh
chairman Cho Lopez and um chairman Vasquez who I don't see
anymore, um who wrote letters of support in um for those as
as along with uh members of our Congressional Delegation,
so we're always going to be looking for those opportunities
to say we need you. We need you to Advocate on behalf of
the city. We want that type of partnership at city council.
Thank you. Uh Choice quick question. Where has the uh,
Revenue grown thus far this year and where have there been
areas of decline this year?
Personal property replacement tax we're keeping an eye on
um, uh, we want to make sure that has a little bit down, um
than we had in Pre prior years now. Um, I want to make a
very clear and this is a kind of important Distinction on
when the city's Revenue comes in. So the city the vast
majority of the city's revenue is actually coming in in the
back half of the year and through the summer.
So um and correct me if I'm wrong, um something uh to the
effect of like only 13 12 13% of our revenue for the full
year we have in right now or is or is just been reported in
um, so the we're we're wait, obviously, we have a long way
to go. So trying to figure out where we're up and down is a
little bit more of a guessing game in the early part of the
year as we get closer to the end of the summer, um areas
where we've seen some growth and I think this is partially
related to
Um, you know still recovering from the pandemic is some of
uh, things around amusements and stuff like that. Although
again. It's very dependent on certain items sometimes. So
for instance if you have a Taylor Swift concert,
Your revenues suddenly Spike up and it makes it look a
little bit unusual or if you have a DNC convention that
might also throw that off, but we're keeping an eye on
and trying to trying to make sure that we um, we take a
look at at that. Um,
Very recently. We saw an uptick in um, some of our fines
and fees. I think that's just related to Summer and it just
just ticked up um from last year and we're going to keep an
eye on some of those enforcement related items. Um,
Those are kind of the major components in an open net if
you wanted to add. Yeah some so um
As I mentioned before some areas of growth are ground
transportation taxes. Actually pretty robust.
our um emergency transportation, uh Services is also grown,
um, considerably over the last 10 years some areas of
decline, um include things that make sense if when you
think about it cigarette tax declining, um, I think that
that is uh a a function of the fact that it's working,
right? Yeah. We taxed it people, um, stop smoking, um
things like cable TV consumer Behavior has shifted, right,
um, our telecommunications again consumer Behavior shifted
and this is why it's always important and incumbent upon us
to always be thinking about are we still taxing the right
thing?
Because if you don't if you're not constantly thinking
about how people's behavior evolves then the thing that you
relied on to support, your operations is no longer there.
Thank you at this time. I'm going to uh, recognize vice
mayor Bernett.
Thank you, Mr. Chair. Um just don't forget Us online. I
know you gotta get your committee people first and it does
always question why an accountant like myself is I don't
even more you're next. But yeah, go ahead. Um vice mayor
Thank you. I just wanted to ask so I didn't see in. Uh, like
the um
And maybe I missed this I didn't see where to like the fees
for the uh, neighborhood opportunity bonus those industrial
fees. Where where where are those?
Those are typically in our special Revenue funds because
they are um, uh, they're they can only be used for a
specific purpose a set forth in the statute. Um, and so,
um, we didn't go and deep dive into our special Revenue
funds or Enterprise funds largely because those should be
at least our Enterprise fund should be self-balancing. Um
our um, sorry, it's right here our um, uh, aha fees all of
the other types of fees sit in our special Revenue funds
which we also monitor, uh to ensure that we aren't uh,
creating deficits in those funds because again, they should
be self-balancing and if you want to like a deeper dive on
just specific we we can obviously provide that so I would
imagine with with development being slow right now that
that area has gone down somewhat I can look in and get you
some exact numbers. Um, we do know that certain of our um,
like our ahof and other types of construction based funds
have gone down which uh just means anytime that happens to
maintain
The level of uh provision of service that we do that means
that our corporate funds going to have to support some of
that more. So again, um, it's incumbent upon us to ensure
that we have a robust and diverse, uh, Revenue structure,
uh to not only mitigate against cyclical downturns. Um, but
because we do have um, you know, things like special
Revenue funds that all always performing the way that we
thought they they would as well and then did you did you
put up here anywhere where where like the the Tif or the
Tif Surplus and you know those things so it's um, when you
look at the breakdown of the corporate fund, um, it's in
there. It's within our local non-tax Revenue. It makes up
about 2% I see it. Okay 2% Okay. All right.
Great. Thank you.
Thank you at this time the chair recognizes Alderman
Rodriguez.
Oh, I I will defer to my colleague online and I'd be happy
to go next if that's okay, Mr. Chair.
That's perfect.
Alderman more want to recognize you.
Alderman Moore
She recognized me Rodriguez.
What a fine job you're doing today, uh
Uh older, uh chairperson. Thank you, man. Congratulations
on getting this together.
Um just a couple thoughts, uh, uh left so uh and questions.
Um, I just
You know wanted to be clear in the framework of this
committee as the revenue committee.
uh subcommittee and our task in being creative and thinking
about um,
both short and long-term
uh, Revenue status of the city
and getting to a point where um, we're able to 1 year over
year achieve our goals and balancing a budget but then also
uh looking long term at um,
You know our our our our our uh our pension system. Um
Paying down and making sure that we give our workers what
we've promised them. I also want to lay down on the table,
um in the light.
Of our workers and working-class Chicago ones. We cannot uh
balance our budget on the backs of those who give so much
particularly those who um,
cut our trees
Deliver uh services like trash services, uh, our Frontline
workers and Public Safety Etc. Um, I for 1 will be
steadfast in making sure that we are being as creative and
as intentional as possible when it comes to revenues, um,
before we go down a scarcity mindset, um and play from a
republican playbook in our great City.
So I just wanted to make sure that um I said that as a
strong union town as a town where we established the 8 hour
workday 40 Hour Work Week where we have some magnificent
Pro worker legislation raising in a minimum wage.
Um supporting our restaurant workers and all working-class
folks starting July 1st. I'm
um, so proud of what we've done and accomplished and we
need to make sure that we make that sustainable. Um,
1 of the ways we do that is by combining, um creative
revenues with that is our public good, um 1 of the things
that the chairman of I have been talking about its small
program, but I'm hopeful that it proves, uh, fruitful is
thinking about our infrastructure and the way in which big
rigs are coming down, um streets that are uh, explicitly,
uh, no truck zones.
and potentially uh doing some sort of automated effort
there, uh to make sure uh that those folks don't do that
again through through through finds, uh, potentially in
that space, um that has a public infrastructure benefit a
benefit to Everyday working-class folks in our communities.
Um, but it also has a revenue potential, um albeit
potentially, um, um small at the beginning. We'll see where
that goes. So I think that's the kind of creative thinking
I think we need to be doing um both at a small scale like
that. But then also at a larger scale, um, as far as
looking real creatively about how we're um,
Supporting our revenues through taxation of where it makes
sense. The the other the last thing I'd say is I think uh
all the women a chairwoman Dao said something very well
like,
In the long game, we're you know, I believe this this this
committee is not just set up for this year's budget. But in
the long run, um, you know, we're talking about a 0.5%
increase, um, yielding 30 million dollars in the LG RF, uh,
if I understand that correctly a 2.5% increase there would
be about a uh, am I is my math correct about 150 million
dollars.
Uh for the city, um, that's big that doesn't even achieve
the 10% that we previously um were at gets us somewhere in
the middle there, but that's still significant amount of
revenues. I think the strategy for us to be uh in
Springfield and elsewhere as a collective, uh is extremely
important and I want to second that motion, although it
wasn't a motion, but I think that that's a extremely
important um way to go. Um, so that's all I have for now. I
just want to make that statement just 1 question for you
chair. What's the intention on the committee as far as
further engagements previous to the next to this, uh, uh,
uh, uh, these the budget votes we have coming up and
thereafter. I think um, Chase had uh, it was a slide
earlier about the the 4 buckets which things that looked
at.
Um sure.
You talking about this?
No, no, no the different funds. Oh the different funds.
Oh, yeah.
So to that end the goal of the committee is to take ideas
that come from this body and to put it through this test
right and from there begin to continue to further democracy
and uh as you stated, uh, and as others have stated the
goal is macro and micro big small as we can see everything
counts and everything matters and so uh to that end rightly
available
Um to again get the ideas and get to see if the authority is
there to transparency is there deficiency? Is there Equity
there in the Simplicity is there and so hopefully we can
get some good ideas coming into fruition. Yeah, I
appreciate the framework. It puts us on the you know, all
of us on a on a thoughtful space to to to offer ideas and
get to a budget. That's that works for everyone.
Especially, uh, those who are hurting the most thank you
very much. Absolutely at this time to share recognizes
Alderman Reilly.
Thank you chairman. Um tell you if we had 10 bucks for
every platitude we hear in this chamber, we'd have no
budget deficit whatsoever. The bottom line here folks is
this is not how you balanced budgets. Um, the bottom line
is you start with efficiencies and cuts.
uh, and then when you can't cut or find efficiencies enough
to balance the budget then
You have conversations about creative revenue streams and
what we need to go and ask the taxpayer for.
And my frustration as a member of this body for 17 years
and now 4 mayors.
Is like a broken record every year and a few of my
colleagues have joined me in this. I have begged and begged
and begged for zero-based budgeting and not the rhetoric
and the baloney that mayor Lightfoot served up for 4 years
where they were zero-based budgeting on Commodities and
contracts.
Baloney, it's about Personnel. It's about a lot every line
item in a an agency's budget starting from zero and
justifying the headcount the supervisors the ratio of the
supervisor to the personnel and the spend. Uh, I say this
as a former budget analyst from Springfield. I actually
used to balance State budgets for the house Democrats there
and I can tell you that every state agency. Every budget
season was required to submit to us. Something called an
ISL form and IL form is literally
Uh 2 or 300 Page document that is a zero-based budget.
Each year, they had to do this now for 17 years. I've been
told by each Administration that's presided here. Oh,
that's too heavy a burden. That's just too much work. It's
complicated. Well somehow Springfield, which does not have
a stellar record on balancing budgets over the last 30
years found a way to make it happen. And so if that's too
difficult for the city of Chicago to engage in shame on us,
And frankly the taxpayer should be pissed about that.
Other governmental entities across the country do this
every year as a budget exercise yet. The city of Chicago
does not and refuses to instead. We set up these
subcommittees on what are we going to do to the taxpayers
next year, right and half of these ideas are hinged on the
state of Illinois doing us some favors. I am all about
getting us back to our 10% of the distributive share of the
income tax.
That never should have been allowed to be eroded by previous
Governors and legislators.
Um, but in order for us to get that restored, we need some
credibility in Springfield.
And we have not had a successful time in Springfield under
this Administration. So if we want to talk about making
some meaningful Investments, we're going to need to have a
really Stellar team in Springfield next year to get some of
these wish list items accomplished. Um, but I'm frustrated
with this process coming into this conversation saying,
where are we going to get more money? And who are we going
to hit for it? Um without looking at are we wasting money?
When was the last time we looked at the mission of these
departments and each of the divisions under them?
I mean some of these divisions have existed before cell
phones existed for crying out loud.
How do we know that these departments need to be built the
same way year over year over year without significant
adjustments for Technology Innovation, frankly private and
public sector Partnerships all this stuff that successful
public corporate entities engage in
So chairman this is not aimed at you. It is not aimed at
the folks sitting with you on that panel. It's a general
frustration with the city of government since I got here in
2007.
But never before we had a revenue subcommittee like this
since I've been here, so I'll give the mayor some credit
for for soliciting ideas from us. Um, I'd like to see more
of that but not just about how we're going to hit taxpayers
for more money, but how to make the government work better.
And and provide real services at a value to our customers
the taxpayer the folks that we all work for.
And so I do hope the mayor will consider a subcommittee on
cuts and efficiencies.
I like to see that or a subcommittee on zero-based
budgeting.
to work in tandem with this 1
um couple questions and then I'll stop talking chairman.
1 Thing, they'll be incredibly helpful to me because I
don't think anyone in this body all 50 of us as a decent
sense of width between the the arpa and pandemic money.
Thank God for it. We got from the feds.
Where that money was plugged in to existing programs
pre-pandemic to assist with revenue shortfalls or some need
for program expansion to help those in need versus programs
entirely created brand new.
With those funds getting a sense of what those things are
kind of an itemized list both existing programs that were
propped up with federal assistance versus new ones created
with it will help us decide. Okay? Well, what are the
Legacy programs we can't afford to do without
And what are the new ones we created because we had the
benefit of a lot of extra help from the Feds that while
we'd love to have them. Perhaps are not sustainable with
our local Revenue share. Um, so I think that's really
important for all of us to get a sense before we start
talking about hitting taxpayers for lots more money. I
think that's just a common sense approach and again as a
form of budget tear it worked pretty well for the state of
Illinois. Um, so I guess there's my my question and and I
again, I don't expect you to have that information handy
right now, but if through the chair you guys could provide
us with a summary again of the programs that existed
pre-pandemic
that we injected with this Federal money versus the ones we
created after the fact that would be I think a really
educational exercise for all of us, you know, I love it
when um, there is alignment in the way that uh, you know
city council thinks and the way that we think so as I um as
I have uh, briefed Alders on and as we talked about during
the arpa, um hearing we are conducting an analysis right
now of not only our arpa programs, but also our programs
that are funded by cdbg, which is um an entitlement fund
that we received through HUD every single year, um to get
at the very question that you're asking because we also
want to understand that very Dynamic a lot of the programs
that were created actually all the programs that were
created under arpa were created prior to us coming. And so
we want to get ourselves. We want to get a handle on what
did this do to our
our budget
What is the risk and impact on our budget when these
dollars go away? Um and are there opportunities to support
programs that we do think should continue not all not all
programs should continue because they were pandemic related
programs. But for those that we think are doing good and
having the impact that we want to see continued in in the
in the future. What are the opportunities to continue those
and what is the funding source to do that with doesn't have
to be our corporate funds. This is why in the monthly
report that you'll get from my office every single month.
It'll show what are the grants that we're going after that
actually have
as their um, Target the very thing that we're doing, um,
because we don't want to put that burden on our corporate
fund. So you'll we I love it when we think similarly you'll
going to get that information. Um, we're going to be
sharing this the analysis, um a little bit closer to budget
time. Um, because it's it's a it's a really big analysis
that we're doing because those are 2 pretty significant
funding sources that we currently have. Well, I'm in I'm
encouraged to hear that you're working on that and and to
be very clear, um, a lot of the programs that exist now as
a result of the federal largest that we received during the
pandemic
As you stated correctly, um, that was the previous
administration and part of my frustration here is not with
your Administration. It's with the last 1
Um, many of us predicted that would be in this position
right now, uh after the Lightfoot Administration stood up a
whole bunch of new programs that we knew would be popular
with certain members of this body.
And certain programs would not but there were so many there
was a little bit there for everybody to like write and
letting those things go is difficult and my concern was
when we were standing all those things up. Hey, this is
great right now, we're swimming in in federal money. But
what happened once it go once it when it goes away and
what's going to happen is people are going to miss those
programs that we can't afford to deliver locally. And so
that was a big mistake The Lightfoot Administration made
and this Council frankly ratified it. Um, so I look forward
to working with you and your team to try and correct some
of those mistakes. But again, we have to start I'm not
saying we should slash and burn city government. Okay, and
for that idea to be characterized as Republican is
irresponsible.
Democrats have run the state of Illinois for a long long
time and somehow we were able to zero-based budget that was
not a republican principle or buzzword. That was our idea.
So let's not go and reframe history and call good fiscal
responsibility a republican thing.
Democrats can do it too. Uh, so I just want to make sure
that that's stated for the record. Um, it's absolutely
doable and I'm not suggesting you can stand up a zero-based
budget this year. But my God, you certainly can buy next
and I will give this Administration a million gold stars if
you can do it because daily wouldn't do it wrong wouldn't
do it and Lori wouldn't do it. Thank you chairman. Thank
you so much. Um at this time, it's 147. We getting close to
2 oclock and we have 3 more artists. I'm back on. I'm
sorry. I'm in an emergency room and I apologize. I got no,
it's all good. And so Alderman Moore, uh, now that you're
back on I want to recognize you at this time or more.
Thank you so much. Uh, first of all, uh, appreciate this
discussion and um in some ways, I just want to um second
what Alderman rally says so take what he said really into
consideration, please um, um budget director Goodman. I
highly um respect you and I know you
continue to do the best job that you can do. So, please
correct me if I'm wrong because I'm always thinking from a
a corporate standpoint and I know corporate can be somewhat
different from government. Um, unless I missed it
somewhere. Uh, generally I start with my Revenue shortage
whether it's over a 5 year period that I'm trying to um, um
obtain. What is that dollar amount? Have I missed that or
what? We're trying to obtain each year over the next 5
years over the next 4 years.
What is that dollar amount?
So I don't think it's a dollar amount that we are trying to
attain. We're trying to make sure we're trying to create
structural balance in our budget. Right and what that means
is that your your expenditures are not increasing faster
than your revenues are increasing. Um, we currently um, as
do a lot of uh, municipalities across the country, um,
because of the pandemic and inflationary pressures that
we've experienced our expenditures are director. Can you
hear me? I I get that I don't you you you basically answer
my question. I understand that part and and sometimes even
expenditures because of high cost of things things like
that can go up that we can't control that when I'm asking
is is there at the Target dollar amount that we're trying
to have we have we set that number saying Hey, we're trying
to raise or keep revenues at X Y X for the next um, 4 years
or 5 years. We haven't done that, correct.
We do a forecast every year. That's a 3 Year. Look forward.
Yes, we do do that and that'll be coming out in August.
Okay, whether it's and hopefully we doing it for more than
1 year. Um, because that's what I'm used to from a
corporate standpoint looking out for Revenue. Sometimes 3
to 5 years out of what we need to um, what we need to be
bringing in in order to sustain our business. So if if
somehow through the chair or whatever I'm not trying to
force that answer on you now, that would help me because
then if I know I need to be bringing in an extra.
800 million a year, right? I'm just throwing out a number
then as I then look at my revenues. Then I I I have my
suggestions and ideas from that whether we're talking about
um advertising and what does advertising get us, um,
whether we're talking about um, the um State um, uh tax
that the um, the um grocery tax that was just suspended
which that is not to me an increment that's putting us back
where we were and we need to keep that and then as we put
out all those um different ideas. Um, I want to make sure
that we're getting to our dollar amount because even when
we start talking about, um,
Property tax and I know that's everybody that's everybody's
third real politically. We already had set under the light
foot Administration. Um, whether people agree with it or
not.
the increase based on the uh, um, um
the um tax of the um
Help me out. Somebody. I'm having a brain cramp in this up
based on the um.
As interest rates rise, and so we pushed that off to the
side. I know this year and I just want to let let people
know that was Revenue that we could have had but I
understand each Administration is going to do what they
need to do. But knowing what that dollar amount is would be
very helpful. And so as we look at either video gaming now
in terms of we know that there are places right now bars
and everything that's doing what they call video whether
it's video gaming for coupons. But yet we know that they
are right now giving people money. Everybody's know that
that's the biggest wideopen secret. How are we taxing? So
so that I know that we get to that dollar amount that we
need for Revenue. That's all I'm saying before we get to
revenues that's going to um, hurt people and taxing people
and stuff like that. I just don't want to stay away from
that with the exception of property taxes only because
We've kicked that down that can down the road for so long,
um from the daily Administration on that that's that's the
realness of it in terms of real Revenue that can also be
written off other other taxes and fees cannot be written
off, um for from a tax standpoint. And so I just want to
make sure that if somebody can give those those d
Because that's gonna help me say what revenues that we need
to be looking at. Um based on the amounts that we need and
I'm not just I'm not sure of that because we can name
revenues and and it may not get us to where we need to be
without knowing
What we really need to be bringing in um on a 4 from a
forecast basis. Do you understand what I'm saying? No, I
understand. Um, you know, as I said as I mentioned before
we do, um publish a forecast every year. It's on our
website. We'll have someone send you the 1 that we
published last year and obviously, uh, we will be uh,
briefing the city council on the forecast that's going to
come out in August as well. And is that just for the year
or is that of 3 to 4 year forecast?
It's a we do a 3 year forecast. Okay transport. All right.
Thank you so much. Thank you. Thank you so much more at
this time. Um, we would like to recognize she would like to
recognize Alderman V.
Thank you. Uh, thank you Mr. Chairman a couple of
questions. Um
uh, David Moore Alderman Moore had uh, kind of talked
briefly about the grocery tax and was that grocery tax tied
into the lgd f
No it oh sorry. Um, so the the the state actually, uh
doesn't didn't collect that on its behalf. It collected it
on behalf of municipalities throughout the state. Um, what
they have done is they have Sunset the collection of that
and allowed municipalities with home rule authority to um
implement it themselves or for those that don't have home
rule authority to um implement it without having to go
through referendum. So we yes, so we Institute that uh on
the local level now and collected on the local so so it
when you say we Implement that now,
Um, does it do we have to put it forward for us to vote on
as part of uh a revenue option if you were going to change,
uh the structure over the grocery tax? Oh, yeah. Yeah.
Yeah. Yes, uh that would have to be so so right now right
now the state has said we're not going to collect the
grocery tax starting inquiry of 2026 right home rules. If
you guys want to go ahead and do that. You got to implement
it yourself, correct? Okay, uh and that and that you said
that was in 2026, correct, correct? Okay, um,
As relates to give you a um, just so you know right now
we've received between 60 and 800 million in grocery tax
from the state.
yeah, so I hope we have a plan how to
how to find Revenue to do that because that's going to be a
tough vote.
collection number
between 60 and 800 million. Annually, that's 100% from
we get 100% of what we generate in Chicago from the state.
Yeah, because it it all comes back to us. I I mean it
fluctuates because it's obviously a tax is based on
behavior and actually did some distance incentivizing
certain Behavior. So it fluctuates depending upon
consumer Behavior, if if we if we do pass, uh, if this body
decides that it would like to pass its own growth rate tax.
Uh right now the state collects that grocery tax and then
presents it to us. They would still collect it on our
behalf. So there wouldn't be an infrastructure there
wouldn't be further cost to building an infrastructure for
us to collect that on our own. I just wanted to make that
point as well.
yep, and then um
with
Under the capital under the gas tax local municipalities
were also.
given the authority to implement a 3-cent tax for
additional
does this budget anticipate raising in another 3 cents?
Um, we uh haven't discussed, um that in particular we're
looking at a variety of um,
you know different approaches to revenue, uh generation not
necessarily all of it being increases in um taxes. So, um,
you know, we look forward to once we're still doing a ton
of research on options. Um, but we look forward to
presenting those to city council when they are baked and
ready.
okay, and then finally, uh
in previous budgets, we've had a line item associated with
uh pension payments for CPS.
Given that there's a new school board legislation that
passed and coming January.
Of 2025. There'll be a new school board.
Does the budget for 2025 is that going to reflect the non
no longer making that contribution or?
Is is it the administration's intent to continue to to to
uh Port money from?
This this government body to another government body.
Um, I'm actually I'm actually gonna pass that to the CFO
because she's in direct, uh discussions with CPS about the
pension payment as you know, um, as you rightfully said the
T the non-teachers at at CPS, so the staff um are in our
meabf pension fund. Um, they actually make up the largest
portion of the meabf, uh pension fund. So we've been in
discussions with CPS since we've gotten here about their
increasing increased contribution to cover those costs, but
well before we go there
is there um
don't strike that I'll wait to hear from the CFO. Thank
you.
Thank you.
Um the meabf payment that cpf has been making is um, you
know a contribution to a portion of what
uh, the annual contribution is that is attributable to
their staff.
Uh, it doesn't fully cover. Um the amount that is
attributable to CPS.
That has been accomplished, you know over the last few
years through agreements and through uh annual igas.
I think you are heading on a point that is something that we
have thought about as well, uh that uh an elected school
board at CPS, uh may make certain decisions. Um, that would
be different from the current school board. And we you know
recognize that that's um,
You know an area where we'll have to be in discussions with
them.
The challenge that CPS really faces is that they're the
only school districts in the state that has to pay for
their pension costs.
Uh the state currently pays for the normal cost of the CPS
teachers the contribution to the ctpf.
They do not pay any of the Legacy costs. They do not pay
any of the costs related to the board and the
administration.
Every other school district in the state has those costs
paid for by the state?
So the most important thing that we're focused on is
continuing to relay that message to the state of Illinois
that um, it's an area where CPS is being treated.
Um in a in a inequitable manner compared to the other school
districts in the state. It's something we would like to see
to see changed and it would negate the issue of CPS making
uh their meabf.
Payment to the city. Um
And uh and and the amount of that and how much we continue
to make on their behalf. So I think it's really part of a
bigger challenge.
And uh, we are certainly hoping that as the uh as CPS moves
moves to an elected school board that the state also looks
at the treatment of CPS, which is different from other
school districts and uh looks at uh, equalizing the
treatment that CPS has just like every other school
district that has an elected School Board. Well, thank you
for that. And I would say that I hope that's on your your
uh, veto session agenda, uh, because as we're about to
elect the school board, I think it's incumbent upon us as
you know, when someone's in the swimming pool and you're
kind of drowning and they say, you know save yourself
first.
Uh what I'm saying here is that uh CPS we're making
payments to CPS. And that's that is a going to be a legal
separate governing body now and they're responsible for uh,
their advocacy down in Springfield it get themselves into
that pension plan, but also to seek Revenue in order to pay
for their operations. So, um, what is that number like that
we're talking about
So to that end, um chairman this the the questions that you
have in depth about CPS the payment so forth and so on that
question can be answered with Gio so today's presentation
doesn't go in depth with that okay, it's not to say that
it's not available it's not to say that we want nose dive
but that's more in the budget meeting what no, actually
actually it's more Revenue because if we're paying it and
we don't have to pay it that comes to us, so to to that end
as it pertains to where where it fits into the budget the
payment so forth and so on it's not to say that it's not
yet readily available. It's not to say they won't be
discussed but not today, but needless to say is there any
other question that you have chairman know that said and I
appreciate it and looking forward to continuing dialogue.
Right at this time, we our last 2 that we want to recognize
and thank you. Again. Chairman is alamac chess Lopez
chairman Chelle Los Lopez and followed by including
chairman Vasquez.
Thank you. Uh, thank you chairman Mahal and I appreciate
the opportunity. I um also second the comments of firm many
of the previous comments about the need to have a plan for
a Springfield in particular.
Um, so we look forward to having a united front, uh to make
sure that the city, uh doesn't balance budgets in the backs
of working people and I will argue that the state perhaps
have balanced budgets, but those budgets are still being
balanced on the backs of working-class families, uh
property tax in particular. That's that's the statue of the
state.
Government, and I yet to see a progressive or common sense
approach to a broken property tax system. So I challenged
the notion that um
this budgets are being uh Equitable and I do think an
appreciate the fact that this Administration has honor 1
the subcommittee meeting we had this um,
Idea under the previous administration, but we never had
meetings. Uh, this is an important step in the right
direction to make sure that we hear from the different
perspectives and I do encourage my colleagues to represent
the best interests of the city of Chicago. Um, I think
lobbyists especially I want to elevate what we heard today
from public comment. We have people with disabilities
seniors, uh, working-class families barely making ends meet
losing property to a speculators and hedge fund managers.
So in that we agree that this is not working for Chicagoans
Chicagoans are the hardest working people in the country
yet. We continue to be burdened by unfair taxes and doing
the job of a state and federal government often times. So I
welcome this opportunity and the space to have a dialogue
about what is the best way to balance our budget and again
appreciate the the lenses of equity in particular so,
I do think I do have some specific questions and some that I
think it is important to fulfill campaign commitments. Uh 1
of them is the carbon tax. I know that there was a proposal
around big Airlines in particular, um to perhaps um
contribute to uh to the balance and and and equity in the
balance of our budget. So that is the first question that I
had. What is the um, uh, perhaps idea of floating around,
um, this carbon tax and big Airlines. This is my first
question.
I don't know Jill wants to take that 1 but I I can say
Obviously, um, you know, we're exploring all ideas. That
would in particular is more complicated than some of the
others because of uh, you know, the fact that we we'd be
pushing up against some federal, um laws as well that we
you know need to make sure that we understand um, and and
especially the implications of that but um, you know, I
think I welcome, you know hearing from you more about you
know, your ideas on that but um, you know, it is just 1 of
many that that the city is going to be looking at. Yeah.
Is the carbon carbon tax carbon tax?
Carbon. Yep, and and I think that you know again, this is
what we need the partnership with the federal government.
Um, I also uh believe that, you know being um in the
midwest that we are the city with um the largest um,
Transfer of goods and Transportation Route for railroad
companies and Airlines. So I do think that we should
explore that I do welcome. The administration have a few
members new members of the ig8 team to tackle this uh,
federal government and again encourage also or federal
representatives to be a voice of reason, uh, which I think
unfortunately is lack of right now in DC but I do hope that
it is something that we can discuss with the federal
government the other 1 that I know has been floating is and
again, you ask people in in in Main Street how Wall Street
gets bail out every time big Banks get bail out, but who
bails out working-class People Banking in the banking
industry in particular have reported record profits at the
time where interest rates are high at the time that many
small homeowners are barely making speed and insurance
companies also benefiting and taking advantage. We see what
happen in the west side. A lot of these claims were not
even honor and often times.
The website by again, uh insurance companies and the banking
industry. I do think that we should explore that. I know
that there was a a a suggestion around the big Bank
Securities and speculation tax. So, I wonder if if there's
any anything that we exploring because I do think that
there are profits out there that are not being taxed and
they continue to get richer and richer
so, you know, um when it comes to things like uh banking,
um,
Corporate profits, you know, those are creatures of federal
and state law. Um, and you know, so we'd have to explore
what if anything we're able to to do. Um, I think you know,
As Alderman Reilly said as Alderman Conway and some of your
colleagues said they're they they did they profited a lot
and we aren't getting our fair share of that profit because
it's mostly staying at the state level. So I think that
there's ways that we can explore increasing our share of
those profits, um, because you know, a lot of them actually
happen in the city of Chicago.
Because most of them are headquartered here. So I think
that that's something that we can talk about but as far as
like taxing, uh the income of Corporations, that's that's
really at at a different level than than what we have the
authority to do. Yeah. Thank you. And and in line with
that, I I um, I do think again that maybe need for a
discussion not only with the state but also with the
federal government about how we can share um, some of those
um, some of the revenue that right now again is making very
few richer and richer and at the expense of or small
businesses and working people. So I do think that we should
uh insist in that and bringing our federal Partners on
that. Um, I know that there has been uh discussion and I
tell you uh vacancies are concerned, uh, when we have
80,000 units vacant in the city of Chicago again, mainly,
uh by hedge fund, uh companies, uh, Blackstone being 1 of
them are repeated again, uh is unconscionable that we see
so much wealth and companies corporations buying property
by the hundreds while we have people holding on to 1
property and being taxed, uh, to to almost losing their
their homes their their life savings. Um,
How can we and again, this is may require discussions with
the assessor's office as well. But how can we address
vacancies when it comes for a speculation not targeting
again the small homeowner who needs some help we talk about
legalizing adus basement and and Coach houses. We want to
help help our small home owners in need of help. But we
also need to tax or maybe including fees for vacancies. You
know that are making again corporations like Airbnb richer.
um
You ask all the hard questions, don't you? Thank you. Um
But I I think you know when it comes to vacancies and
vacant lots and things like that. I know that chase and um,
uh our Corporation Council have been really, um,
they've been really Vigilant about um, imploring a new or
or it should I should say, uh, making sure that we can um,
1 get the the funding that um, we're due from people who
hold that and hold it without, you know, making putting it
to productive use because that's a loss of Economic
Development. Um, our department of uh, planning and
development is also really really focused on returning
these to be productive, uh uses of property and bringing
them back into our tax roles, which ultimately uh, lowers
the burden of any of our tax levy on any 1 particular
household. Um, I think that those are strategies, um that
are being put to use right now as far as you know,
multinational corporations or extremely wealthy individuals
holding property, but not living here. I'm I'm not sure
that I have the um, the the answer to that just yet, but I
think it's a it's a fruitful area for us to explore
Do you have anything that yeah, I think I think it's um in
the kind of goal of this Revenue subcommittee. Um, although
you know, we're obviously here as guests to this
discussion, uh is to explore as many different
opportunities and part of that is enumerating ideas that we
might need to seek further partnership with the state and
state regulators and especially in the financial
institutions, um sector which is a lot of that.
Um policy is dictated on the state and the federal level
and how we can help show where where those different pieces
are as those interact with those. So we're we're happy to
pull that information and and provide that thank you. I
just have a few follow-ups in terms of and I know that um,
unfortunately very wealthy individuals who not only avoid
tax section, but they ultimately they leave down and I I
will refer you know with the last attempt to do a
progressive income tax that was defeated the billionaire
who defeated now lives in Florida, but loves to have his
name put in everywhere in Chicago. So I would love to I
would love to discuss, um, the possibility um to have
partnership with the state. I know that there was an idea
of floating on a referendum, uh to impose an income tax for
people people making more than $1 million, uh to actually
offer relief for people in the city. Um, I
important that we look at
Earners who have no problem taking trips, you know, uh
overseas in matter of minutes and we are yet to have uh,
the ability to have on families, uh going from 1
neighborhood to the next here in the city that inequality
is unconscionable. And that's what I I, um, I would like to
to see maybe there's anything around referendums that we
can partner with the state. I do welcome this idea of
taxing High earners if we can tax billionaires even better
because these people are really out of touch with the
reality of our neighborhoods. Uh, so I would like to see
maybe there's a partnership with the state on a referendum
that actually works for working people and really shifts
the burden to the super rich.
So I'm not sure if you have any status. I know that there
was a possibility about this referendum. I'm not sure if
there was you know, um any follow-ups of that.
I'm happy to um, and again, um part of this is is making
sure that we're connecting you on uh, income taxes is
really dictated on the state level. Um, so how we can show
where those Partnerships make sense and how we can Advocate
not just on our fair share or or how that is is structured.
Um, I'm sure we can work with the IG team to to to show
that yeah. My final question is around the corporate head
tax. I know that they are concerns about of course, we
don't want to scary. Um any more of our uh manufacturing,
uh, I understand that now we have vacancies even in
manufacturing.
Facturing, uh the main thing in terms of um job vacancies,
but in terms of Corporations like Amazon that make record
profits again low benefits for workers. I do think that we
should Target, um, you know corporations like Target that
benefit from the hardworking of our community like Amazon,
so I wonder what is you know, there's any conversations
about the corporate head tax and maybe some of the
different scenarios there.
Yeah, I mean, I I think that that's that's something that's
always going to be in the mix of the discussion. I think
that there are certain realities that we have to uh be
cognizant of as it relates to, you know, something like a
head tax, you know, our reality has changed right head tax
is usually uh meant to um provide money for infrastructure
because people they drive on your roads, they um, you know,
they use the infrastructure when they're down here at work
and that reality has changed a lot since the pandemic we
are not at full uh capacity. We have a lot of vacancies we
have corporations that are making decisions about whether
or not um, they are going to stay hybrid if they're going
to become, you know, full fully back in person. You have
people who um, you know work at home. Um now, uh, even
though the corporation is headquartered here. And so we we
have to think kind of uh, um,
Intentionally about how circumstances have changed, um in
thinking about every single, uh, Revenue idea that we have
and and and the head tax in particular uh relies on.
Actual employees being in the city at a at a large volume.
So that is something that we're looking at but we you know
kind of the intention behind it is slightly changed and we
have to understand what what how that impacts how we think
about that type of tax going forward.
Thank you chairman. Thank you so much chairman, and lastly.
We like to recognize chairman Vasquez as we conclude. Thank
you very much chairman. Um, I will try to move quickly on
some of the stuff. I I do understand.
I wish we had a better relationship with the state and
federal government as we do not have 1 and it becomes a
little more challenging to figure out all these things that
we want to find agreement on right there's a list of things
that when we just saw going to Springfield was challenging
to even get across over the finish line. So then add more I
believe that adds a challenge. So I want to kind of hone in
on more of the city, uh ideas and figure out what we can go
there. So some of these may be through the chair just uh to
get out there but um,
1 yes or no, if you're doing it, too. If you are can we get
through the chair that way it's a little bit quicker, uh
and assessment of how Industries and services are doing
which generated revenue and which ones don't because I know
last term we had talked about different Services being
taxed and kind of opening up with that base of Revenue
could look like but I don't think we ever got an assessment
of which Industries we're doing well and which Services
were are you all looking at that and if
So could you share some of that through the chair?
Could you be a little bit more? Um, like could you expound
a little bit more about what you mean? What services I
think we'd been looking at like administrative fees lawyers
like stuff that was more of that sales tax for services.
Yeah. Sorry. Yeah. Um, I you know, I think that we've been
pretty open that that's an area that we're looking at and
I'm definitely going to turn it over to Jill in a second.
Um, I think
you know, she'll say and I'm going to pair pair her for a
second. We're 1 of only 11 states that does not have an
expanded, uh, uh sales on uh sales tax on services. And so,
you know, the devil will be in the detail as to
What we can you know potentially include in that um, and
people will have differences of opinion on this. Um, but I
think that we start big and we start to think about um, you
know, what should be included in what should and I know
that um, uh, I'll turn it over to her right now because I
know that there are certain things that we should not
include in in in that. Um, so
But but just to be clear on on 1 it though before it gets is
it it does require State changes. So so I did want to make
I know you were so cool with because we yeah, but I I
appreciate that.
All right. So, yes, we do continue to look at this. We've
done a lot of research. We've hired a couple Consultants
who've done a lot of work for us. Um, because we do want to
be able to uh, really start that conversation with the
state by presenting them with as much research as possible.
Um, uh to help them really understand our perspective and
to uh, um, and hopefully start our fruitful discussion with
the state that would would Advance this. I think the most
important thing, um in my mind when we think about sales
checks or Services is that uh over time, uh, the amount of
consumer spending on Goods has continued to decrease as a
percentage of consumer spending in the amount on Services
as increased and at this point only about 30% of consumer
spending is on goods. And since that's what we're taxing.
We have a shrinking base and subsequently. We have a very
high sales tax rate if we expand That Base to Services it
brings us an opportunity to lower our sales.
Tax rate and I think that's where the really important thing
is. And so, you know, this has been brought up in the past
and um, you know from the uh experiences that people have
relayed to me, you know, it turned out, you know, everybody
every industry lobbied against it, you know, so there was a
list that was, you know, hairdressers and manicurists or
manicurists or something like that, um, you know for it to
really work we need to expand to a large number of services
and not we can't
I don't understand that they will not all get taxed, but we
need to think about it in a broad perspective of how do we
increase the base so that it's more.
Stable, um so that we capture the activity that upper
income people are engaging in. Um, I always give the
example of myself. There's lots of things that I do.
because I can afford to services that I use you know that
are you know, some of the obvious hair and nails but you
know, I'm also getting my taxes done by an accountant
because I can afford to do that. And none of that activity
is getting taxed even though my income level I certainly
can afford to and when I think about someone who's making
25,000 a year, it has a child and they're spending their
money on food clothes and backpacks.
Um, almost all their money is going to good so they're being
taxed on almost all their activity and that's why the sales
tax is so regressive. Yeah. I I I appreciate that. I think
that having an assessment to our colleagues have an
understanding. So we're all talking to Springfield in that
way because I think it's right. It's about being precise
and understanding that behavior has changed over time. I do
my best to save folks on haircut as you can tell but I want
to make sure that as we're thinking about services to your
point what is being used and how in a way that allows us to
think about what the next number of years look like rather
than still be Antiquated in the way. We're assessing it. So
that would be 1 the other 1 would be um, separately Yes
again, yes or no, and if you could set us through the chair
and assessment of roles in government that generate
Revenue, so I as you guys know Department of Finance Health
Inspectors, uh building inspectors those tend to be either
Revenue neutral or generating that a list of what those are
would be really helpful because when we think about budgets
and and where we increase headcount,
Those are actually helping us out and then the hiring
becomes its own challenge, but we don't even know which of
the roles in government do that compared to the other ones.
So, um, I had mentioned this before but we do user fee
analysis every single year. So we do, um get an evaluation
of how much Services cost and those are those are Revenue
generating Services because we get fees to support that.
So, um, we do have uh, a pretty good understanding of which
of our departments do um cost but I I
I should say that um for every expenditure we don't 100%
Um,
Charge the full cost.
Um, yeah because the full cost would would be could be
expensive to people so we do on some level subsidize some
of those um services that we provide. Well, it's something
we looked at last term we uh 1 we drafted a whole city
budget, but prior to that we actually looked at graduated
fines and fees. There's other countries where it looks at
what your average annual income is and comes up with like a
day fee. And so it becomes a multiple of that as opposed to
having a flat fee for everyone. So, um, we're we're going
to try to revisit that this term but thinking through that
would be helpful. Um, and I think uh,
Kind of along those lines like again the roles that that do
that the Departments that do also things like speed cameras
and and getting more um conversations because I think some
of that state level as well to be able to open up where we
put more speed cameras because those are not taxes. Those
are based on people not following the law.
Uh in areas that aren't currently parts of schools. Yeah.
Yeah. Yeah. Um, that would be a discussion. Yeah, I think
all that all those things would be helpful because again
for folks who are kind of risk averse, uh, when they see
the word tax, it's not a tax. It's either you follow the
rules or you don't so for our Law and Order types. It
should be right up their alley to say hey, if you're not
following the speed limit, then you're welcome to
violations, which is a different conversation. I have yeah,
I do want to flag 1 item on there. And I know I know you
know this all
Alderman, um, but just to have generally in terms of fines,
um, and this is something that we take very seriously when
we're looking at either adding a new fine or something. The
the main component is the behavioral change and then how
that Revenue feeds, uh into something related to that,
correct. Um, uh,
POV and Taxation and the reason why you look at it, that
way is you you want to avoid as much as possible.
Major components of a government that people rely on that
are reliant on a different a behavior also trying to end.
Yeah. Yeah. So, you know, you wouldn't want to have
something where if you're encouraging more smokers or
you're encouraging more speeding. Um, and it's a delicate
balance. So it it and we're happy to have those further
conversations and it's also understanding that like the
revenue generated is marginal towards the cost. Right?
Right. So like you can have some level of of income coming
in but it's not the same as like depending on it. I think
when we talk about congestion pricing for example looking
at these larger behaviors. Um, so yeah, I agree with that.
Um 2 2 last ones. I know you're asking for our Revenue
ideas. Are there any ones that the administration is
willing to share with us? So we're not having 2 separate
conversations and then figuring what that out looks like at
budget.
I you know, we're still in the in the Crux of um, kind of
full scale research right now. Um again, I had mentioned
before we we're looking at any type of proposal on a very
holistic, um perspective. So we're not just saying, okay.
Yeah this will this will raise us another hundred million
dollars. Let's do it. Right right. Um, it's we have to
really think about, you know, a number of policy
considerations, um, the impact uh, um of whoever is going
to be targeted by that Revenue. How do we do it equitably.
How do we make sure that people understand why we're doing
it and actually there's Buy in so there so we're still
doing a lot of research right now and so it's it's not at a
point where we're uh ready to think about it. We're also
thinking about What's the timing right is is it something
that would be something we would want to introduce this
year or is this, you know, uh something that should should
really think about, you know, 2 years from now 3 years from
now as um, uh, um, I can't remember which college of your
colleague said it. Um, uh, but the head tax, right?
Uh, we're still coming out of a recovery. And so timing is
a huge part of thinking about any Revenue. Um, is it that
will it have a chilling effect on the very thing that
you're trying to tax? Ya know a million percent. I mean
we're we're in a new world after the pandemic which affects
so many different things. So I I agree with that. Um, yeah,
I think that's part of the reason and you and I've talked
about like the the altar budget working group, which I
think this is actually kind of leading into some of that
conversation over the year when you're looking
At budget so I appreciate and then I guess I agree with my
um colleague Alderman Reilly about also talking through
efficiencies. I think that people have their own sacred
cows when they look at this stuff rather than
blanket having the conversation because when I think about
efficiencies, I go cool. I think independent forensic
audits of operation and finances make sense in all the
Departments and we could start to with the 1 that costs us
the most but whenever you talk about CPD all of a sudden
everyone gets defensive, but I think having independent
audits of all the Departments to go are they working? Well,
are we the best use of dollar can then have a conversation
that's more informed. Um, I guess where would the
Administration land on having those kind of audits to be
better informed on like what's happening in a different
department?
So we do have audits they're done in his shop. Um, I you
know, I didn't respond to Alderman Reilly, but I think it's
a both and Proposition 1 this is a revenue committee. Um,
so we don't talk about the other side in the revenue
committee, but we have a budget committee and we present
efficiencies, um to that committee as part of the budget
process. Um, we as part of the forecast, um, because as I
said before our expenditures are growing, um, at a rate
that is higher than our revenues at at the moment. We are
forced to find deficiencies and we do that every single
year. Um, and that's something that we will continue to do
every year. Um, we have an incredibly large government. We
have an incredibly complex government. I will hold my
opinion on zero.
Based budgeting but there are people and organizations out
there who have a very different opinion of zero-based
budgeting than Alderman Reilly and and its Effectiveness.
Um, I think that um, we have to explore uh, and there's all
different types of way that we can budget and we can budget
efficiently and I think that we have to explore and use
every tool in our toolbox sure and currently when we are
going through our annual financials and things like that.
There will be items that pop up
That we're like that looks.
weird or that that is an inefficient potentially an
inefficiency might not be um, and we'll request a further
audit whether that's this year or next year and go through
and we're also open to if there are items that you think
we're missing on that regard or just haven't uh tracked in
a while and genuinely need to be looked at um to put that
on the auditing schedule. Um, we we're obviously Limited in
the amount that we can do in a year, um, uh, but but to try
to find some of those items and then that feeds kind of
into what um, the budget teams does to say like, okay we
saw this is where we we we we're no longer doing that the
way we work we're intending to or something like that to
correct those issues. I think I think for me when you think
about the Herculean effort to look at CPD, you're talking
to 2 billion dollar budget where we don't have a lot of
insight on some of the operations and effectiveness of it.
Um, plus if you add the Office of Public Safety
Administration, it almost gets a 3 billion, uh is
A problem when I talked to the officers on the ground and
go. Hey, are you seeing that money? They go. I have zero
idea what you're talking about. And and so the fact that
we're not even getting.
Again, a an analysis. That's that's an objective 1 separate
of how people feel to look at it. I think it's something
that I think the city should explore because
it it you you're talking what a hundred million dollars a
year just on Settlements a department that people argue
isn't effective even with the amount spent that it just I
think it begs more of a deep dive. Um, so that would be
kind of the beginning but to be fair to everybody else you
could do that to every Department. Let's just start with
the 1 that cost the most. So thank you very much. That's
kind of my take on that. Thank you so much, uh chairman.
Uh, also I would like to recognize participating remotely,
uh, chairman spaz under rule, uh, 59 i absolute last person
today. Uh, he's online chairman Martin, uh, we recognize
you as well. But at this time you have the floor chairman
Martin. Thank you chair. I appreciate it. Um, the 3 quick
questions 1 this might be best directed to the controller.
Um, the inspector General's office said flag last year that
there was uh, some point of sale technology improvements
that the city could make that could bring in, uh,
approximately 12 million dollars a year.
Here, uh specifically involving in-person transaction fees.
Um, uh, actually, I'm sorry this I think was it was 12
million over a multi-year period but I was curious, um,
what the update is in terms of that modification and if you
don't know off the top of your head through the chairs just
fine.
Yes, so really glad that you brought this up, uh important
component, um to look at not just
um point of sale, um, but this actually is spurred a larger
conversation about transactions within um the city and then
how we're managing that individually. Um, so we are looking
at that, um both as part of our internal fixes to our
system, but also the Erp system, which is ongoing
This past uh year to make it so that we can um see those
improvements. Um, and also improve things like user
interfaces for as you might have might have seen um
announced in the cut the tape Initiative for like the uh
City wallet, um, and those pieces so that people have more
clarity on either debt they owe or where to pay certain
things, but then that transaction process is more uh in
How do I say a modern a modern way uh than it was uh, uh
currently so, um, that is something that we we have a a
team.
Currently focused on I think as we get to the budget
season, we'll have more to talk about on that and then
where we're going. Um, and where those savings are going to
be.
great, and if you can provide through the chair, at least
the point of sale, um issue that the IG flag, uh timeline
for implementation, uh, that would be really helpful
because appreciate the point about their spread a lot of
conversation a number of moving Parts. I think we want to
make sure that for something that was flagged now over a
year ago. I think it was in a June 2023 report that come
the 2025 budget that um, we'll be able to see the fruits of
the work of the oig
uh, certainly can can provide that information great. Um
second. There's another IG report that had referenced
commercial and demolition debris Recycling and that um,
there's opportunity for improvement within cdph, um to do a
better job of tracking that part of what they could track
as ensuring that for qualifying contractors that they're
paying the fees, uh along the schedule that has been uh set
by the municipal code. Um, I think that's just best for the
chair to understand to get an update. Um how that uh, those
improvements are working so that hopefully we see a ramp up
in compliance with something that's already
on the box
um, and then my last question this might be best, uh for
the CFO, um, just as a quick refresher and apologies, if
you mentioned this earlier with our menu program, my
recollection is that all of that's funded through bonds and
that there was a bond issuance in the last term that
allowed us to increase from 1.2 approximately to 1.5
million, um was hoping you if if you know off the top of
your head if you can provide a refresher about a high level
like how the sequencing of bonds currently is allowing us
to uh, fund our menu program.
Uh, so you're correct. The menu program is funded through
bonds and uh, you know, the city, uh, we issue bonds
periodically to fund capital projects, but in between when
we are issuing bonds, we also have a line of credit
available.
So we can access the line of credit if it's uh been
sometime since we've issued bonds and the bond funds are
allocated for other projects. So, um,
It essentially it's getting funded out of our general
obligation bonds, whether it's through a line of credit
that we use on an interim basis and then we repay with
bonds or it's getting funded directly with bonds. But uh,
those are the sources for the menu money. And so the
availability shouldn't be impacted by the time of year or
anything like that when it's being expended.
Understood I was hoping through the chair if your office
could provide um, uh, I guess just a nice round date on
2020 starting fiscal year 2020, um, just the the frequency
and amounts of General obligation bond issuances that uh
have helped fund. Um, the menu program understanding that
that might be over representative, you know, there's
probably things that we're funded Beyond, uh menu funds but
still it'd be good to know. Um, when those issuances
happened and how big, uh, they were um, that's all I have.
Thank you chair and thank you chairman. Um, well there, uh
seems to be no more further business before this committee,
but before we conclude I would like to thank Renee Brian
and Audrey from the Department of Finance for helping and
vice chairwoman Dow and um, very grateful for the amazing
staff of our finance department the prepared great
documents Chase and that thank you so much for um,
Being present today and so to that end you all motion made
by Alderman Conway, uh to adjourn, uh this meeting. Can I
get that motion from you?
Oh all those in favor say I?
All those opposed say nay the subcommittee on revenue for