Chicago’s budget process minimizes alderman input

Chicago’s budget process minimizes alderman input
Chicago’s budget process minimizes alderman input

An informed, unbiased view of the mayor’s budget is essential because “if a council relies entirely and solely on information provided to it by another political office, it inhibits its ability to operate independently,” says Charles Modica, San Diego Independent budget. analyst.

In Chicago, COFA is designed to serve a similar function. But when the budget drops and it’s time to get down to business, COFA’s process looks completely different.

First, Chicago’s budget hearings begin just a couple of days after the mayor released the budget proposal. In 2022, for example, Lightfoot introduced his budget on a Monday and the first budget hearing followed on Thursday.

Then there is COFA’s size: two employees.

“I don’t know how two people alone could go through all this,” says Modica. A team of two can formulate “a kind of comprehensive, overall overview, or get very detailed information about a smaller segment of the budget. But trying to do everything, it’s a lot.”

In fact, Chicago’s nonprofit Civic Federation produces its own budget analysis each year, with a team of five devoting about a month to the project—the organization aims to publish its report just before the City Council’s final vote, rather than the start of hearings. Civic Federation acting president Sarah Wetmore says the organisation’s report “still needs to take a fairly high-level view of the budget, looking mostly at top-level trends.”

COFA seems to agree that it is understaffed and pressed for time. In 2021, for example, it balked at its budget analysis, arguably the most important single report of each year, saying it was “not able to produce a robust report” given staffing levels and the tight timeframe between the budget’s release and the start of hearings . (COFA did not respond to further interview requests.)

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The following year, it produced an 11-page budget analysis — again, San Diego’s comparable report typically exceeds 200 pages. COFA called out some of Chicago’s budget tactics, such as the “purportedly enhanced revenue projections” that allowed the city to produce its statutory balanced budget, but lacked specifics.

Part of the idea behind an independent budget office is to meaningfully interrogate the city’s revenue projections on behalf of the council. Cook County, for example, has an independent revenue forecasting commission that offers a different opinion on the county’s own projections. However, COFA appears to be limited to squeamish skepticism.

And staff size is not the office’s only problem. COFA’s 2023 budget analysis — expanded to 32 pages — laments the lack of access to city data regarding prior years’ spending. It is noteworthy because the Municipal Act bylaws governing COFA provide access to all financial information the director deems necessary.

Smith knows that COFA is not yet fulfilling its vision of producing “the kind of analysis that would give the City Council a much more robust decision-making tool.” Nevertheless, she hopes that COFA will eventually mature into a more useful part of the budget process.

“You have to hammer on reform,” she says.

An expanded role

Beyond a strengthened, empowered COFA and an extended budget timeline, what else can be done to strengthen the city council’s participation in the budget process?

One idea is to involve aldermen earlier in the process, when “their input can be used to shape the budget rather than waiting until the statutory budget hearing when most important decisions have already been made,” says Shayne Kavanagh, senior director of research at the Chicago-based Government Financial Officers Association, or GFOA.

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Then there is extra clarity. GFOA certifies the presentation of both city budgets and annual financial reports to meet utility standards. All 10 of America’s largest cities have GFOA-certified annual reports, while eight of the 10 also have GFOA-certified budgets provided based on criteria such as clarity and completeness. Chicago and New York City are the only two top-10 cities not to receive the certification.

GFOA does not publicly share the reasons why cities do not receive the certification. But there may be clues elsewhere, such as in the Civic Federation’s recommendations for Chicago’s budget process. Wetmore says the organization wants to see more details about why the city believes the various revenue sources will produce the amounts projected within the budget.

Another possibility is a half-yearly check-in. “When the city council votes on the budget, they leave it until next year — and that’s probably a mistake,” says Dick Simpson, a retired professor of political science at the University of Illinois, Chicago and a former mayor. He says these mid-year reviews would allow the council “to get a better handle on what’s going on and to be better prepared for what might be needed in next year’s budget”.

That education is key because, if councilors are going to be more involved, well, you want them to be involved constructively. For example, the city has recently made financial progress under current Finance Director Jennie Huang Bennett and Budget Director Susie Park, and has impressed rating analysts by showing transparency and moving away from sketchier tactics like scoop-and-toss and toward smarter ones like actuarially defined pension contributions, according to Michael Rinaldi, Senior Director in Fitch Ratings’ Public Finance Group.

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There is no guarantee that these gains will continue under, say, another mayoral administration, nor is it guaranteed that councilors will advocate for smart fiscal policies.

Fitch’s brighter view of Chicago’s finances — the agency raised the city’s credit rating a notch last year, to BBB from BBB- — is based on “the trend rather than the absolute position,” Rinaldi says. “We have a positive outlook, but it depends on the city’s ability” to continue on a prudent fiscal path.

Under Lightfoot, Chicago’s annual budget votes are no longer the rubber-stamp affairs they were under Daley or even Rahm Emanuel. That speaks more to a poor relationship between the mayor and council than a healthy budget process, according to Ramirez-Rosa, 35th Ward mayor.

“The overall structure is still in place. You still have a majority of older people who prefer to just cast their vote for the mayor, and then ask behind the scenes for the things they want, says Ramirez-Rosa.

What is his proposed solution?

“I believe that what is needed most are structures that enable good governance. And right now that minimum basis is not there.”

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