One of Chicago’s most influential business leaders said Thursday he is “very encouraged with the start” of Mayor Brandon Johnson’s administration, but not yet willing to support business taxes to bankroll the social programs that form the cornerstone of Johnson’s anti-violence strategy.
“The Chicagoland Chamber is a pragmatic business group. We know that government, education, public safety, critical city services are not free. We know we have a pension liability of $37 billion. All of these things … require solutions. [But] we’re looking for reforms before revenue,” chamber president Jack Lavin, told the Sun-Times.
Three months ago, Lavin endorsed Paul Vallas over Johnson in the April 4 mayoral runoff in a desperate attempt to stop the $800 million in new or increased taxes that Johnson has proposed to bankroll “investments in people.”
Lavin was equally concerned about Johnson’s history of supporting the concept of defunding the police at a time when violent crime in Chicago and the perception of it remain stubbornly high.
Now that Johnson has been in office for more than a month, Lavin is singing a different tune. He said he’s genuinely encouraged that the new mayor is reaching out and getting to know the business leaders whose support he needs to create year-round jobs for young people.
Same goes for Johnson’s willingness to collaborate, be flexible and seek business input before reinstating an employee head tax Lavin has condemned as a “job killer.”
Equally impressive to business is the skill Johnson demonstrated in crafting an outdoor dining compromise that eluded former Mayor Lori Lightfoot. Lavin called the program “one of the silver linings” of the pandemic. It allowed struggling restaurants to add more tables on sidewalks, parking lots or even in the street, in some cases.
Lavin also pointed to Johnson’s early success in Springfield on maintaining different pension benefits for new and old employees.
“He stopped two pension bills that were gonna start tearing down tier 2 on the pension, which has helped bring fiscal stability to our pension system in Illinois and all of the municipalities around the state. He said, ‘Hold up. We need to take a comprehensive look at these pension bills that would have been a sweetener for the firefighters’ pension. Their pensions are about 20% funded,” Lavin said Thursday.
“We’re glad, from a fiscal stability standpoint ... that he said, ‘Let’s take a step back. ... He’s forming a task force. We want business to be at the table…The business community is ready to sit down and talk on pensions and really work on a comprehensive solution.”
One of the stalled bills would have increased benefits for Chicago firefighters hired after Jan. 1, 2011, when Illinois created a two-tiered pension system, reducing benefits for new hires.
It would have made the annual cost of living adjustment for the most junior Chicago firefighters equal to the full annual increase in the consumer price index. That’s double the current cost of living adjustment.
The second bill would have changed the final average salary used in calculating a Chicago firefighter’s pension.
Acknowledging Chicago’s $37 billion pension crisis already has been studied to death, Lavin said he hopes Johnson’s task force will “negotiate actual solutions.”
“A constitutional amendment is ... not gonna work. I don’t think it would pass. And so, we need to look beyond that. ... Look at other things like consolidating pension funds, which Gov. Pritzker has done. But we can do more. Stop spiking salaries at the end of careers. And look at, realistically, how can we fund it,” Lavin said.
“If we’re gonna raise revenue to pay the pensions, let’s put the money in a lockbox for the pensions. That way, the business community would feel better that, if revenue is being raised, it’s going to solve the specific problem,” he said.
During the campaign, Johnson acknowledged he needs the City Council and General Assembly to enact major portions of his $800 million tax plan, but he refused to identify a “Plan B” if either body balks.
“I need industry to help come up with Plans B, C and D, just like working people had to come up with Plan B, C and D even though industry ... only went with Plan A,” that is, raising property taxes, Johnson told Crain’s Chicago Business in March. “That’s the problem that we have. That’s the problem that we’re gonna fix.”
On Thursday, Lavin urged the mayor to “take a step back and look comprehensively” at the “fiscal cliffs” confronting the city, Chicago Public Schools and the CTA as federal stimulus funds dry up. Johnson’s administration must “start solving those issues before we raise new taxes for new programs.”
With the occupancy rate of downtown offices still hovering at 50%, Lavin said it’s time to face reality: The number of employees in the Central Business District will probably never again be what it was before the pandemic, he said. Employees have grown too accustomed to the work/life balance of working from home.
“We need to continue working on it from many different angles, and we’ll continue to drive that number up. … One of the really important things is our transit. ... safety and reliability. A lot of employees who work downtown — that’s one of the things they raise,” he said.
“We need to continue to have our cultural and museums and those kinds of things happening downtown to create an energy and a vibrancy to get people back. And businesses are doing lots of different things. They’re providing lunch, breakfast. But also it’s about a company’s culture and bringing people together and having that innovation that happens when people are together,” he said.
NASCAR’s street race on the first weekend of July, plus next summer’s Democratic National Convention, are “commercials to showcase all that Chicago has to offer,” boosting tourism and driving down a 28% vacancy rate along North Michigan Avenue, Lavin said.
So-called “downtown revitalization tax credits” would help to “bring in new kinds of retail — experiential retail.” So would “a better connection to the lakefront” and more outdoor dining that makes the Magnificent Mile a “warmer place to be,” he said.
As for the Bears’ stadium sweepstakes, Lavin said only that the team’s demands — in Arlington Heights, Waukegan, Naperville or Chicago — are “very reasonable.”
“Like any business, they want stability in property taxes. We want to know what our property taxes will be,” Lavin said.
“Now that the Bears have taken a step back in Arlington Heights, there is an opportunity for the mayor [Johnson] to put something forward,” he said. “And part of that is gonna be what kind of stability do you have on property taxes?”
