Chicago Mayoral Race: A Candidate Comparison

By Andy Busch, Political Economist and Contributing Author

A closer look at the Chicago mayoral race

The views and opinions expressed in this article are solely those of the author and do not represent the views of MB Financial, its Board of Directors, employees or shareholders.

When Chicago Mayor Rahm Emanuel stated last fall that he would not be a candidate in the upcoming mayoral election, the political door opened for a wide range of candidates seeking the office and a wider range of policy proposals to address important issues for the city. As mayor of the third-largest city in the United States, the winner will face challenging problems, from paying pension benefits to addressing safety concerns to K-12 school performance. One critical issue may impact all of the social issues:  economic growth. Without economic growth and opportunities, Chicago will be unable to pay for new social programs, and will likely see additional loss of population, which will put additional pressure on city finances.

As a quick reminder, Chicago owes $28 billion to the retirement systems for schoolteachers, police officers, firefighters, and other city workers. The chart below shows the city’s required annual pension payments, which are scheduled to increase over the next four years by more than $1 billion. This will take up approximately more than 20% of the entire Chicago city budget.

Chicago's required annual pension payments chart (2017 - 2030)

Source: The Civic Federation 

With respect to the candidates, Jack Lavin, president and CEO of the Chicagoland Chamber of Commerce, said, “The important things to the business community are infrastructure, O’Hare and talent. We want stability, and we want to hear their plans about creating jobs.”

With this in mind, let’s review the plans of runoff candidates Toni Preckwinkle and Lori Lightfoot for their policy proposals to create economic and job growth for Chicago.

Cook County Board President Toni Preckwinkle
On taxes and revenue, Preckwinkle “supports passing a tax reform package that includes progressive revenue that will allow the state to stabilize the pension debt systems and reduce the growth so that Illinois can afford to live up to its obligation to properly fund our schools.” This is the same constitutional tax reform package that Governor Pritzker announced during his State of Illinois speech that would change individual income tax rates from a flat structure to a progressive structure and would require an amendment to the Illinois Constitution. She doesn’t support a constitutional amendment to change Chicago pension liabilities for current city employees or retirees. Preckwinkle supports a casino in Chicago, legalizing and taxing recreational marijuana, and a real estate transfer tax on properties sold for over $1 million.  

She wants to use the new tax funds to increase spending on education and to fulfill pension debt obligations. She wants to quadruple Chicago’s investment in small business microloans to $4 million and to recruit the private sector to match it. Finally, Preckwinkle wants to reform the Neighborhood Opportunity Fund (NOF) to increase applications, change the payment structure and widen the types of investments.
  
Attorney Lori Lightfoot
On taxes and revenue, Lightfoot supports “…a progressive state income tax.” Like Preckwinkle, Lightfoot supports the same constitutional tax reform package that Governor Pritzker announced during his State of Illinois speech that would change individual income tax rates from a flat structure to a progressive structure and would require a constitutional amendment. Like Preckwinkle, she is against amending the Illinois Constitution to reduce or diminish pension benefits for current city employees or retirees.  Lightfoot supports a casino in Chicago, legalizing and taxing recreational marijuana, and a graduated real estate transfer tax increase.  

Lightfoot has a 10-point plan for economic development:

  1. Make Chicago friendly to small businesses and startups
  2. Increase access to capital for local businesses and startups
  3. Decentralize city operations by relocating city agencies to neighborhoods
  4. Localize supply chains through community partnerships
  5. Expand opportunities for minority, disabled, and women-owned businesses, small businesses and returning citizens
  6. Use federal Opportunity Zones to drive development in distressed communities
  7. Offer small businesses planning advice and technical support
  8. Grow professional apprenticeship programs
  9. Support the integration of the regional economy
  10. Eliminate tax benefits that incentivize vacant storefronts

She wants to assist small businesses by lowering the barriers to accessing capital and creating business incubators on the south and west sides of Chicago. For neighborhoods, she advocates partnering with businesses and nonprofits to eliminate food, pharmacy, and healthcare deserts, and to bring transparency to TIF financing. “When I am mayor, the city will not create new TIF districts until we have fully analyzed the performance of existing districts to ensure that they are meeting their intended objectives and that private recipients of TIF funds are satisfying their contractual obligations.”

On transportation infrastructure, Preckwinkle and Lightfoot have similar programs to improve Chicago. Lightfoot has proposed an extensive transit program with seven priorities listed. Although Preckwinkle doesn’t have a formal proposal, she has commented on these issues. As of this writing, neither candidate has expressed views on Mayor Emanuel’s $8.5 billion O’Hare expansion project scheduled to open in 2028. 

Below are the candidates’ stances on transportation issues. Both candidates support similar programs:

  • Underground express transit link to O’Hare: Neither have embraced Elon Musk’s $1 billion plan.
  • CTA expansion: Both support Red Line expansion from 95th to 130th Street.
  • Safer streets: Both support building 100 miles of bike lanes in Chicago, including 50 miles of protected bike lanes.
  • Ride-share taxes: Both support the current tax on ride-share to help fund transit.
  • Bus service: Both support growing the Chicago bus rapid transit network to improve CTA service.

Wrapping this up, it’s fascinating to see the candidates’ proposals across many key topics on both job and economic growth. There are differences to be sure, but both have similar policy proposals to solve the issues on infrastructure, O’Hare, and talent. The challenge for the next Chicago mayor is to balance growing the economy with creating revenue streams to pay for infrastructure, education, and pensions.

The views and opinions expressed in this article are solely those of the author and do not represent the views of MB Financial, its Board of Directors, employees or shareholders.

The information in this article has been obtained from sources deemed reliable; however, we do not guarantee its accuracy. This information is not intended to be legal, investment or tax advice and should not be relied upon. MB Financial Bank, N.A. and its affiliates do not provide legal or tax advice. You should review your particular circumstances with your legal and tax advisors. Member FDIC