Ten of the 27 City Council members who have publicly declared opposition to Mayor Brandon Johnson’s proposed employee head tax are calling a special meeting for next week to grill a consultant paid $3.2 million to pinpoint cost-cutting and revenue-raising ideas that they contend the mayor chose to ignore.
If 26 members show up at the meeting Monday, they would have a quorum and get a chance to question representatives from EY, the global business consulting firm created by accounting giant Ernst & Young.
The EY report includes as much as $1.4 billion in savings and revenue-generation options for Chicago to consider.
It identified up to $103 million in potential savings that could come from modifying employee benefits, but that would require union concessions that Johnson has emphatically ruled out for fear of alienating the unions that helped put him in office. As much as $111 million would come from procurement reforms, and up to $257 million through organizational changes in city government.
“There’s a lot in here that they’ve completely ignored,” former Finance Committee Chair Scott Waguespack (32nd), who joined the call for the special meeting, told the Chicago Sun-Times.
Aviation Chair and 19th Ward Ald. Matt O’Shea said questioning of EY consultants could, at the very least, identify the $100 million in savings needed to eliminate Johnson’s proposed $21 a month per-employee head tax.
“Everything needs to be on the table before we go back to taxpayers and hit ’em again … and this administration has refused to look at real efficiencies. That’s why we want EY before us,” O’Shea said.
Northwest Side Ald. Samantha Nugent (39th) said it is “incumbent on all of us to at least sit and listen to some experts who have really dug” through the city budget.
“Would this offset maybe the elimination of the head tax or help with an advanced pension payment, or perhaps prevent us from borrowing? I think all … of my colleagues would want to dig to find efficiencies and resources so we could do those things,” Nugent said.
Arguing that the already crowded schedule leaves no time for a special meeting Monday, the mayor’s office arranged a Budget Committee hearing Friday to give alderpersons an opportunity to question EY consultants.
Ethics and Government Operations Chair and 47th Ward Ald. Matt Martin, who joined the call for a special meeting, said a hearing would be fine with him so long as it provides a “public opportunity” for alderpersons to grill EY on conclusions the firm reached and “compare those recommendations with what’s in the mayor’s budget.”
Martin is particularly concerned about the mayor’s decision to use “one-time tactics” to cover 40% of the $1.2 billion budget gap, cut the advanced pension payment in half and rely on tens of millions in new borrowing to bankroll large settlements and retroactive pay for Chicago firefighters.
“This invites a credit rating downgrade. And the CFO told us at our first budget hearing that would cost us between $410 million and $415 million in additional borrowing costs, which is … hundreds of millions of dollars that aren’t going toward pensions. They aren’t going to mental health. They aren’t going to public safety,” Martin said. “We need to keep as much of that in our accounts as possible.”
The Johnson administration commissioned a separate report that laid out a vast array of cost-cutting options. That report was released in mid-September by the Chicago Financial Future Task Force, co-chaired by businessman Jim Reynolds and Chicago Urban League President Karen Freeman-Wilson.
Johnson later released EY’s full report under pressure from alderpersons eager to compare the two reports to determine whether politically sensitive ideas had been edited out of the Reynolds/Freeman-Wilson version.
Mayoral press secretary Cassio Mendoza questioned whether the 10 alderpersons who joined the call for the special meeting have even read the EY report.
“If they look at it, they’ll see that a lot of recommendations are in the budget. And we even briefed them on exactly which recommendations are in the budget and why,” Mendoza said. “Once the EY people come in, they’ll just explain it, and they’ll be like, ‘Oh, damn. I don’t know why we made such a big thing about this.'”