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CHICAGO
BUDGET HANDS $500 MONTHLY TO SOME, HIGHER PROPERTY TAXES TO OTHERS
Illinois Policy Institute/
Brad Weisenstein
Chicago will spend $32 million on the
nation’s largest test of universal basic income. What happens after that
year is one question, as is whether handing out cash will truly fix
anything.
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 Chicago Mayor Lori Lightfoot’s $16.7 billion budget passed Oct.
27, handing some Chicago residents a property tax hike averaging up to $180 a
year and giving low-income residents cash grants of $500 a month for a year.
The budget increases property taxes by $76.5 million, which an Illinois Policy
Institute analysis shows will cost a Chicago homeowner between $180 and $72 per
year on average, depending on where they live. Central city residents will see
the $180 increase for a total bill of $6,317, while the south city will see a
$72 increase to an average of $2,522.
Lightfoot’s budget additionally awards each Chicago alderman $100,000 in “microgants,”
“despite concerns that it would create slush funds ripe for abuse,” according to
WTTW.
Lightfoot is using roughly $32 million from temporary federal COVID-19 relief
grants to fund a test of universal basic income in the new budget. The plan will
give $500 a month to 5,000 low-income families for a year, but there is no plan
for funding after the federal money runs out in 2024.
 Universal basic income is a proposal to send no-strings-attached direct
financial assistance to every citizen or resident of an area. It has been a
popular idea among progressive and socialist members of the Chicago city council
in recent years.
If Chicago lawmakers decide their pilot program was a success, they will
struggle to figure out how to pay for it in the long run. They will struggle
even more in trying to expand it to include additional families.
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Families across Chicagoland were hard hit by the
pandemic. In theory, a universal basic income program can help these
families get back on their feet, but Chicago cannot afford it
without structural changes to its failing finances.
Chicago must first address out-of-control pension spending and
skyrocketing property taxes, which the new budget makes worse. The
tax hike will hurt the economy and run counter to the programs
Lightfoot hopes will boost the recovery.
Runaway pension costs are the driving force behind rising Chicago
property taxes, as well as its declining municipal services.
Chicago recently ranked 141st out of 150 cities for municipal
service quality. The primary reason for Chicago’s poor city services
despite its high tax burdens is most of the money is eaten up by the
pension crisis. From 2011 to 2021, spending on pensions has
increased 239%, while spending for city services has only increased
18%.
Without structural changes to balance spending and revenue in the
long run – starting with an amendment to the Illinois Constitution
to allow pension reform – Chicago will continue asking its taxpayers
to pay more to get less. Experiments with novel proposals such as
universal basic income will either be impossible to sustain or come
with an economically damaging price tag for already overburdened
taxpayers. |
