Mayor Brandon Johnson’s administration on Thursday delivered a pointed rebuttal to sharply higher taxes and fees for garbage collection, off-premise liquor sales and rides on Uber and Lyft proposed by a City Council majority determined to avoid the mayor’s proposed corporate head tax.
The 17-page response was delivered to only 23 of the 26 alderpersons who signed a letter to the mayor this week outlining their alternate budget ideas. It was not clear why three other names were not included. But senior mayoral adviser Jason Lee hinted at the reason when he claimed that the slim majority has already seen a few members peel off.
The response was signed by Chief Financial Officer Jill Jaworski, Budget Director Annette Guzman and Comptroller Michael Belsky.
If there is room for compromise, it was tough to tell by the Johnson administration’s response.
Virtually all of the ideas from devised by a group of moderate and conservative alderpersons, with help from a brain trust of civic groups and former city finance experts, were dismissed as either unwise or unworkable.
The proposal to nearly double a garbage fee that has been frozen at $9.50 a month since its inception to $18 a month — while charging eligible seniors $9 a month — was dismissed by the mayor’s team as politically untenable “at a time when communities are already experiencing substantial property tax increases through the recent property tax assessments” that hit hardest on the predominantly Black South and West sides.
“Imposing another major cost escalation would create an immediate and disproportionate burden on households least able to absorb it,” said the rebuttal letter, which included a ward-by-ward breakdown of where the proposed 90% garbage fee hike would hit hardest.
The mayor’s team also dismissed a proposal to raise the tax on off-premise liquor sales by 3% as a potential violation of the “uniformity clause,” thereby inviting a court challenge that would likely overturn the tax.
Counting on $90 million in government efficiencies and $150 million in new revenues by improving debt collection and selling old debt to collection agencies was similarly rejected as “neither standard practice nor financially viable.” That’s largely because, unlike property tax lien sales, most forms of municipal debt “do not carry transferable security interests,” the rebuttal letter stated.
The mayor’s team also said a $26 million a year idea to license the use of so-called augmented reality that super-imposes digital content onto city property like Millennium Park and the Riverwalk, and at city-sponsored parades and festivals, has “long-term revenue potential” but has never been tested in any municipality and “needs further research.”
Johnson’s administration did not dismiss the proposal to return to the mayor’s original and more ambitious plan to apply the city’s 10.25% amusement tax to rides on Uber and Lyft in a broader zone that includes downtown and much of the Near North and Near South Sides.
But the rebuttal notes that the 10.25% tax was “raised recently and rejected in Springfield as a viable revenue source for mass transit” amid opposition from ride share drivers and disability advocates.
The plan to shave $100 million from the $1 billion tax increment-financing (TIF) surplus that Johnson plans to use to rescue Chicago Public Schools was rejected for the impact that it would have on other agencies of local government.
“Several of these partners have already enacted budgets that rely on the surplus estimates provided by the city,” the rebuttal stated. “Adjusting the surplus at this stage would create material disruptions… and could impair their ability to meet statutory and financial obligations.”
Echoing Johnson, the mayor’s team argued that the proposed corporate head tax was needed to bankroll community safety programs, and defended the mayor’s plans to borrow $166 million to bankroll four years of retroactive pay raises for Chicago firefighters and paramedics, and cut the advance pension payment to $130 million.
Senior mayoral adviser Jason Lee said the Johnson administration had no choice but to issue a comprehensive rebuttal to a “full plan that” adds spending and “tries to find about $440 million to fill that gap.”
“If you take any piece away from it, the plan doesn’t work and I don’t think the coalition holds,” Lee said. “We’ll see if someone wants to put forward more of a piecemeal negotiation. But that’s not what we got. We got a full package that only works as a sum.”