The first time around, it was scotch and a cigar. That is how Mayor Lori Lightfoot celebrated the passage of her 2020 budget. It was an unexpected challenge to her mayoralty. The year prior, Rahm Emanuel’s 2019 budget sailed through the city council in a 48-1 majority, including the support of the socialist alderperson from the 35th Ward, Carlos Ramirez-Rosa. The budget did not raise taxes or fees, nor did it increase services, nor offer any long-term solutions to the city’s pension crisis. It was a status quo budget, a minor respite in the city’s fiscal woes. Per Chicago’s usual deferential theatrics, after the passage, the city council gave Mayor Emanuel a standing ovation as he praised them for their hard work in agreeing with him on nearly everything. It was toady pageantry, and yes, at the time, even the socialist alderperson participated in it. Spectacle aside, everyone knew that the pain was coming. What people did not know is how early it would arrive and how severe it would be.
Rather than facing a $1 billion pension crisis in 2023, the city found itself with a fiscal crisis immediately after the 2019 election. It too was nearly $1 billion. Lightfoot’s budget closed the gap, but with a margin of victory that Emanuel would have found humiliating: 39 – 11. Unlike under Emanuel, the council’s leftwing was no longer willing to settle for the status quo. The socialists led the charge in opposing the budget while three progressive freshmen joined them. The two remaining opposition votes were from the 9th Ward Alderperson Anthony Beale and the 15th Ward Alderperson Raymond Lopez. They did not join the leftwing out of ideology but as a way of spitting in Lightfoot’s eye. Since Lightfoot’s election, these two alderpersons have been on a warpath against her administration’s good government reforms. The opposition was noteworthy, especially in a city where the mayor usually rules with absolute control over the budget, but in the end, Lightfoot was victorious. She celebrated its passage. Then, apparently upset that she was denied the same deferential theatrics granted to Emanuel, created a website to criticize the alderpersons who voted against her. Chicago’s mayors do not always use strongarm tactics; sometimes, they are just ridiculously petty.
Regardless, the city avoided another fiscal calamity. It had two years to prepare before it faced another disaster with the pension fund. Through prudent planning, it could weather the incoming storm. Unfortunately, biology does not care about Chicago’s pension crisis. COVID19 did not just punch Chicago in the face. It bit off a chunk of its ear. Unlike other midwestern cities, Chicago avoided the worst that deindustrialization had to offer by building up a robust leisure and hospitality sector. To a large extent, Chicago prevented itself from becoming the next Detroit by making the Windy City’s economy closer to Disneyland than that of the Motor City. Leisure and hospitality were cushions against deindustrialization, but they are utterly helpless in the face of COVID19. The virus ruthlessly gutted the sector. At its height, 25% of Chicago’s leisure and hospitality workers were unemployed. For the city, that meant a devastating loss in sales taxes. As with the 2020 budget, the 2021 budget faces a nearly $1 billion shortfall; with the 2022 budget, the city is expected to have a shortfall of over $1 billion; and, less we forget, by 2023, the city will need to come up with another $1 billion for its pension obligations.
Still, Lightfoot managed to get the budget passed, including a divisive property tax levy that ended in a 28 – 22 vote. It was a split not seen in the council for decades. This time around, the opposition against Lightfoot was inchoate. Only five of the six socialist alderpersons voted against her budget. Some of the progressive freshmen switched sides too, while a few older liberals joined in the opposition. Meanwhile, unlike the year before, the council’s conservative forces were far more organized. They took the lead in opposing the budget because it raised taxes and cut funding from the police department. The leftwing followed them but were against it because those taxes were regressive, and the budget did not make enough cuts to the police department. It was a muddled mess. The lack of a clear alternative meant that some progressive alderperson would inevitably defect and compromise. The passage was tight, but in many ways inevitable. This time, Lightfoot celebrated with scotch, a cigar, and for good measure added a steak.
Lightfoot can celebrate her political win, but for Chicagoans, there is not a lot to celebrate. At best, the budget avoided catastrophic layoffs and shored up a few minor holes in programs, but it did so by nickel-and-diming everyday Chicagoans. The budget will raise the gas tax by $0.03 and increase fines and collection fees. It will also generate revenue by ticketing residents caught on speed cameras driving 6 mph over the speed limit. The most controversial aspect of the budget was an annual increase in property taxes tied to the consumer price index. The increase is small, and if Fritz Kaegi, Cook County’s new assessor, is successful in instituting his reforms, the assessments will be far more equitable than they were under the thoroughly corrupt Joe Berrios. Still, the property tax increase would have been easier to swallow if Lightfoot had not introduced a plan to let the Cubs defer a $250,000 payment to the city on the same day. For many, the message was clear, even if Lightfoot denied it. If you are a major corporation and struggling during the pandemic, you get a tax break; if you are a middle-to-low income individual and struggling, you get a hike in taxes and fees.
While the increases in fines and property taxes are the most immediate concern for Chicagoans, the most devastating aspect of the budget is the refinancing. To cover the shortfall, the budget refinances $501 million of the city’s debt. In the short-term, this provided a much-needed injection of cash, but it will make it more difficult for the city to climb out of future fiscal holes. Chicagoans should be prepared because those future holes are coming. In October, months before the budget passed, Moody’s Investors reaffirmed Chicago’s “junk” bond rating and changed the city’s fiscal outlook from “stable” to “negative.” In a desperate attempt to spin the report while also shoring up support for Lightfoot’s budget, the city’s Budget and Management spokesperson claimed that Moody’s proved that the creditworthiness of the city was sound, that is, as long as the budget passed. In reality, even with the budget passing, the city’s creditworthiness is shit, and it will continue being so for some time. Chicago’s fiscal choices are basically deciding on when to experience pain, now or later. Avoiding pain altogether, much less having a budget of joy, is not an option.
For much of the population, the ability to choose one’s pain is the definition of neoliberalism. The irony is that nearly no one in the current government, whether in the mayor’s office or on the council, would admit that they align with neoliberal policies. In a certain respect, they are correct. Unlike in the heyday of Richard M. Daley’s and Rahm Emanuel’s mayoralty, there is no appetite for mindless privatization or a return to governing via corrupt contracts. The problem is not that alderpersons are inspired by dated Thomas Friedman’s columns; the problem is that neoliberalism cast a long shadow. The devastation that those policies had on Chicago is felt for literally decades after they are gone.
In contemporary capitalism, Jean-Baptiste Colbert‘s laissez-faire for markets has meant Weber’s Iron Cages for government. The Iron Cage of neoliberalism—where all socialistic policy options are muscled out due to the logic of fiscal constraints—appears to exist long after the canard of “markets for everything” has been debunked. Lightfoot’s administration does not share Daley’s and Emanuel’s zeal for New Democrat politics. Lightfoot is a mediocre centrist, not an insurgent neoliberal trying to redefine the New Deal as one big public-private partnership. She is not that ambitious nor imaginative. What her administration does have is a zeal for balancing budgets within the given policy constraints, and because the roots of those constraints are from the Daley’s and Emanuel’s mayoralties, she—and much of the city council—operates as an extension of those policies whether they like it or not.
Furthermore, even if Chicago avoided such neoliberal enthusiasts like Daley and Emanuel, it still exists in a world where the federal government has completely abandoned urban America. The Nixon administration’s goal of “defunding the left” by choking off federal expenditures to urban centers is probably one of the fastest policy ideas to achieve bipartisan consensus in American history. Trump’s refusal to “bailout badly run Democratic cities” is essentially a crass version of Nixon’s “New Federalism,” and Nixon’s “New Federalism” has been the default position of every administration—Republican and Democrat alike—for nearly half a century. If the past does not weigh heavily on Chicago, then the federal government’s cruel stinginess surely will.
The situation can feel fatalistic. No doubt, the billowing fiscal crises leave the city’s leftwing frustrated. Socialism’s support is at a historic high, yet socialists’ ability to make meaningful changes in the city’s budget is severely limited. Such a situation requires some perspective. For the next two years, and most likely much longer, similarly contentious budgetary struggles will go on in the city. For the next couple of years, near billion-dollar budgets gaps will be Chicago’s norm. For the left to make significant gains, it will have to organize a broad coalition of supporters, which will have to include winning over less radical alderpersons. To do this, Chicago’s left must stand on clear and unambiguous demands that have majoritarian support. That is the only way it can escape the duality between docile compromises and futile protests. Otherwise, instead of smashing through the bars, Chicago’s left, like the rest of the city, will be stuck endlessly pacing neoliberalism’s Iron Cage.