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Chicago’s New Mayor Wants State Help in Tackling Fiscal Woes

Chicago’s New Mayor Wants State Help in Tackling Fiscal Woes

(Bloomberg) -- With days left in Illinois’s regular legislative session, Chicago Mayor Lori Lightfoot is pressing the cash-strapped state for help with the city’s financial challenges.

Chicago has to generate more revenue, Lightfoot told a standing-room-only-crowd at the City Club of Chicago on Tuesday, noting that the city needs to work with the state and the federal governments. She said she supports the legalization and taxation of recreational marijuana as a revenue source, and her team is also “working hard” to advance a plan that creates a Chicago casino.

“In Springfield, there’s a lot on the table,” Lightfoot told reporters after her speech, referring to the state capital. “We’re continuing to push on the things that we know are important.”

On Monday, lawmakers approved a constitutional amendment to end Illinois’s flat tax, sending the measure to voters to decide in the next general election in 2020. That’s the centerpiece of Governor J.B. Pritzker’s plan to help stabilize the worst-rated state’s finances. Before their planned adjournment on May 31, lawmakers still need to approve the governor’s spending plan for the year that starts July 1 and could also take up his $41.5 billion capital plan as well as measures to legalize recreational marijuana and sports betting.

Lightfoot, who took office May 20, said her team is conducting a "deep dive” into the city’s finances. Even after her predecessor Mayor Rahm Emanuel raised property taxes and other fees to help shore up the pensions, Chicago’s four retirement funds are still short about $28 billion, according to the most-recent annual financial analysis. The city’s required contribution to those retirement funds doubles from about $1 billion in 2018 to $2.1 billion in 2023, according to that analysis released in July.

Before taking office, Lightfoot had said Chicago’s fiscal picture was worse than city estimates without providing specifics. On Tuesday, Lightfoot told reporters that her team is “still looking through a lot of the different accounts,” and said she’d make a speech that lays out the fiscal situation and "offers up some concrete solutions. ” That speech will happen "sooner rather than later, ” she said.

In a question-and-answer session with the audience after her speech on Tuesday, Lightfoot said the city’s property taxes were driving people out, one of the factor’s in the city’s population loss.

“I would like to avoid raising property taxes entirely,” Lightfoot told reporters afterwards. “I’m not foolish enough to say that that’s going to be an eventuality but certainly that's the mandate that I’ve given the team is to look at other means. A lot of it is going to depend on whether or not we’re able to get some relief from Springfield on some of the proposals that we’ve put forward.”

To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net, Michael B. Marois

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