Face it, progressives. This is the absolute worst time in history to run out of other people's money to spend.
That's exactly what has happened in Chicago. And New York City is also facing fiscal Armageddon shortly after the almost-certain next mayor, Zohran Mamdani, has to propose his first budget.
There aren't enough "rich people" to "pay their fair share" or "greedy corporations " to "pony up" for the two cities to balance the books without huge tax increases. The budget shortfalls facing New York City, and especially Chicago, are historic and horrifying.
Chicago's budget deficit for FY 2025 is insurmountable, at $1.1 billion. Deficits for 2026 and 2027 are expected to be even larger.
Couple the city budget deficit with a Chicago Public Schools (CPS) deficit of $734 million for the coming school year, and you have a recipe for catastrophe.
Both the city budget and the CPS budget must, by law, be balanced. So must the New York City budget. Years of overspending, depending on Washington for pandemic dollars, and accounting tricks had led to the current crisis in both cities.
"Can progressives, no longer able to sidestep the stark budgetary realities that have been well understood now for months, make the tough decisions that those in the positions they hold are called upon to make when they seek these seats of responsibility?" asks the Chicago Tribune Editorial Board.
Budget-wise, New York City is in even worse shape. Mamdani will face a $6-8 billion deficit hole that must be plugged.
"The city has built up spending to an unsustainable level," says Ana Champeny, the vice president for research at the Citizens Budget Commission, an independent watchdog. "Even if the revenue estimates are too low and you take into account underspending, you're still facing a good $6 billion hole you need to fill before you think about anything new."
Already, the city has a budget gap of about $3 billion, which it has been able to cover only by prepaying for city services with accumulated surplus tax revenue from the pandemic years, when outsized Wall Street profits filled city coffers.
But those surplus funds are quickly being drawn down, even as tax revenues continue to grow. Meanwhile, lingering pandemic-era federal aid is also running out, and the Republican president and Congress are exceedingly unlikely to give the city more money anytime soon.
Under less optimistic scenarios, Champeny says New York's fiscal hole will be $8 billion in the coming fiscal year and close to $10 billion after that.
Both cities made monumental mistakes with the tens of billions in COVID-era aid that Congress gifted to them. Instead of fixing structural problems with their budgets, fully funding pensions, and husbanding resources for when the aid ran dry, the two cities hired lavishly, especially the CPS, which is now facing the loss of pandemic funding and a bloated bureaucracy they can't pay for.
Even if these radical leftist mayors can find the money to close their respective deficits, other massive problems are just over the horizon. Both cities have badly underfunded municipal pension systems and creaky mass transit. Both items are going to need huge infusions of cash to remain solvent.
What are both men going to do? Obviously, they are going to have to compromise on most of their key issues. But do either of them have the political courage to buck their radical supporters and do what's right for their cities?
Brandon Johnson has, so far, demonstrated no vision, no courage at all.
Within a few weeks, between the school board’s action and the recommendations of Johnson’s budget working group (as well as City Hall’s response to those suggestions), we should have a much better idea than we do now of whether pragmatism will hold sway in resolving Chicago’s budget crises. Will unionized city workers be asked to make sacrifices to help balance the budget or will Johnson and fellow progressives put most of the onus on taxpayers?
Johnson isn’t the only Chicago politician responsible for the city’s current sorry predicament. Since Rahm Emanuel left office after two terms as Chicago mayor, this city has grown the size of its government even as its leaders knew federal aid was transitory and the exorbitant bill to shore up Chicago’s underfunded pensions only would grow for the foreseeable future.
Both men will find a way to blame others for their failures. They will continue to insist that the money is out there and that we just have to keep digging in the s**t pile to find that unicorn.
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