The economic crisis caused by the COVID-19 pandemic has created serious budget problems for Cook County, Illinois and the City of Chicago as recently reported by WTTW and NBCChicago news.
Cook County has a $280 million deficit and it is even worse in Chicago, where the budget could fall $700 million short.
Governor J.B. Pritzker’s stay-at-home order to stop the spread of the virus, which lasted from March 21 to May 29, decimated the county’s budget, according to Cook County Board President Toni Preckwinkle.
The biggest impact was on sales tax, as people cut back on their spending. Sales taxes dropped by $110 million during the period.
The stay-at-home order also impacted other tax revenue:
The county amusement tax dropped by 85% as sporting events and concerts were cancelled.
Hotel tax revenues were down 60%
Gasoline tax revenues fell 19%
Preckwinkle warned that the $429 million in federal funds sent to the county by the government to respond to the pandemic cannot be used to fix the budget. She called on Congress to pass another relief package.
Public hearings on the proposed budget will be held this month (July) and the Cook County Board of Commissioners is expected to vote on the final budget in November.
Property Tax Increase Can’t be Ruled Out
Chicago Mayor Lori Lightfoot said considering the projected $700 million budget shortfall for the city, she cannot rule out an increase in property taxes. She told a press conference, “I can’t take it off the table, but it is truly the last thing I want to do.”
The $700 million figure is 40% higher than the $500 deficit Chief Financial Officer Jennie Huang Bennett had projected. It’s also “conservative” and could go even higher, the mayor said, depending on how long it takes for consumers to regain confidence and whether coronavirus cases surge again.
Lightfoot has asked city departments to help identify any possble tax savings. “Obviously, one of the tools we can use is a hiring freeze and put off significant hiring until the next cycle. But the reality is, 2021 isn’t looking great, either," she said.