Coronavirus Won't Lead To City Worker Layoffs, Draconian Cuts

CHICAGO — Mayor Lori Lightfoot said the city will weather the economic downturn caused by the new coronavirus crisis without dipping into cash reserves, delaying pension payments, making "draconian" service cuts and laying off city workers.

"We're not going to compromise our long-term future and our position. ... We're not going to tap into reserves. We're not going to seek an extension of our pension obligations. We're going to meet those," the mayor said during a conference call Thursday with reporters.

The mayor said reducing the size of city government would be "penny wise and pound foolish" and make already difficult financial time worse.

“For us to put people on the unemployment rolls — for us to retract and not be a partner with residents and businesses in trying to get them through this difficult time so they’re better situated to come out of this with minimized harm — that doesn’t make sense to us,” Lightfoot said.

“If we shrink and then put people on the streets, we’re gonna exacerbate an already difficult time. We think that’s exactly the wrong strategy. So, we’re gonna continue to look at ways that city government — obviously, within our means — can serve as a small stimulus.”

Lightfoot cited the city's efforts to offer loans to small businesses suffering during the coronavirus crisis as an example. So far, 7,000 businesses have applied for loans through the so-called small-business resiliency fund. The mayor said those loans are filling a "sweet spot" that helps businesses that operate on cash, don't have banking relationships or are run by undocumented immigrants that might have a tough time qualifying for federal small-business loans included in the coronavirus relief stimulus package.

Chicago budget officials said they expect the city to receive about $470 million from the federal Coronavirus Aid, Relief and Economic Security Act to foot the bill for COVID-19-related expenses.

Overall, officials said they expect the city, public schools and CTA to receive about $1.5 billion including:

• $800 million in funding for CTA operations and expenses related to the coronavirus crisis.
• $46.7 million in community block grants to fund services for senior citizens and the homeless.
• $23.7 million in Emergency Solutions Grants for coronavirus impacts on homeless residents.
• $1.5 million in Housing Opportunities for Persons with AIDS funding.
• $15 million in Community Services Block Grants to address skyrocketing unemployment and coronavirus-related economic downturn.
• $205 million in federal coronavirus relief for Chicago Public Schools.
• $6.8 million in Coronavirus Emergency Supplemental Funding Program grants.
• $9.7 million in Public Health Emergency Preparedness grants from the Centers for Disease Control and Prevention.

City budget officials also said they are still determining how much of the $10 billion in airport stimulus funding will be allocated for Midway and O'Hare airports, along with the city's share of $56.6 billion in federal money allocated for emergency management, firefighter and head-start grants earmarked in the stimulus package for local municipalities nationwide.

When asked how the city could be in a manageable financial position when just last year her administration was grappling with a billion-dollar budget gap, Lightfoot said the "ying and yang" of Chicago's diverse economy will help the city weather the dramatic and sudden financial downturn.

The city doesn't have a single revenue stream that accounts for more than 13 percent of the budget, and only about 25 percent of city revenues come from industries most affected by the coronavirus crisis.

For instance, the mayor said, certain sections of the city's economy — grocery, ride share and 30 percent of the city's amusement tax revenue related to streaming entertainment services — are doing fairly well during the coronavirus crisis.